Yesterday, Bobby Abreu signed a two-year $19 million deal to remain with the Los Angeles Angels of Anaheim. Abreu is a good player and still has value as a hitter, good enough to make up for his an atrocious defense. The contract calls for two guaranteed years at $9 million a piece, with an option for a third year that vests after 550 plate appearances in 2011 or 1,200 total plate appearances in 2010 and 2011. If the option doesn’t vest, Abreu gets $1 million.
My model predicts that Abreu will be worth $23 million to the Angels over the next two seasons. This value includes his specific contribution to a team of the Angels caliber, where wins are more valuable—wins on good teams are worth more than wins on bad teams. Accounting for aging at the late stage of players careers gets tricky, but even after factoring in his decline he’s still good enough to justify the deal. If his option vests, then he’ll likely be worth the third year. That’s a nice feature of the option: if he’s not worth it, almost certainly the Angels won’t have to pay it.
Overall, it seems like a good deal for both parties. It may also foretell a good market for all free agents.