Kyle Lohse has agreed to a four-year, $41 million contract with the St. Louis Cardinals. It wasn’t that long ago when Lohse was looking for work. He supposedly turned down a three-year $20 million offer during the previous off-season, before finally settling on a one-year $4.25 million (incentives pushed this number up a bit) deal with the Cardinals. At the time, many pundits loudly criticized (with laughter) Lohse’s agent Scott Boras for expecting a multi-year deal with an annual value of $10 million. The initial signing by the Cardinals was supposedly proof of Boras’s hubris.
Well, it turns out that Boras was right. If Lohse had signed the deal three-year $20 million deal, he would have missed out on this deal. I have Lohse valued at $47 million over the next four seasons, and I’m sure Boras was well aware of his client’s value. The opportunity cost of signing a bad deal now is not signing a better one later; it’s a good lesson to remember.