Why Would Dan Uggla Reject a Four-Year, $48 Million Contract?

That’s the question Ken Rosenthal tries to answer. The Florida Marlins supposedly offered Dan Uggla a four-year, $48 million extension that he turned down. Like the team, I am a bit surprised that Uggla didn’t accept. I estimate Uggla to be worth approximately $51 million over the next four years ($12.75 million per year). That’s in the same ballpark as the Marlins’ offer, plus Uggla still has another year of arbitration, when he will likely get a little less than his market value.

Rosenthal suggests the following answers.

Uggla, the only second baseman in history with four 30-homer seasons, has slightly lower rate stats than outfielder Jayson Werth over the past three years, but more home runs, extra-base hits and RBI. Werth, a free agent, almost certainly will command more than four years, $48 million.

I have Werth valued at $4–5 million more per year than Uggla. If this is what Uggla is waiting for, he probably shouldn’t hold his breath.

A four-year deal for Uggla would amount to a three-year extension on top of his final year of arbitration, making him a free agent at 34. Uggla likely would seek at least a five-year contract as a free agent after next season, delaying his next deal to 36.

That’s true, but the future market will account for his depreciated value as he ages. Also, he risks having an awful season in 2011 that could raise uncertainty about his future performance. That’s an awfully big gamble to take for a few more million dollars. This contract would be more than triple his current lifetime earning as a baseball player.

While the Yankees, Red Sox and Phillies are among the high-revenue teams that wouldn’t pursue a second baseman in the 2011-12 market, Uggla also could play third base and outfield, increasing his options.

While I don’t think a position switch is necessarily in his future, he would be worth more to a winning club. It may be that he’s willing to hold out for free agency in the hope of grabbing on with a perennial winner that will value him more than a merely-decent club like the Marlins. Or maybe, he wants assurances that if he signs, he won’t be traded to somewhere else in an attempt by the Marlins to capture some of his added value to winning clubs.

Who knows what really is going in in these negotiations, but I think the Marlins have a pretty good offer on the table.

4 Responses “Why Would Dan Uggla Reject a Four-Year, $48 Million Contract?”

  1. Sky says:

    What are you offensive and defensive projections for Uggla and Werth?

  2. Marc Schneider says:

    JC,

    When you make the projections as to how much a player is worth, do you assume that agents and front offices actually do this kind of valuation? It seems to me that the simple explanation of why Uggla wouldn’t sign the contract is that (1) he thinks he is worth more; and/or (2) he wants to go somewhere else. Do you think agents do the kind of objective valuation that you do? I’m not being sarcastic; it just seems to me that assuming rational choice on the part of humans may not be a realistic way of looking at decision making. Moreover, it seems pretty clear that clubs often factor in subjective considerations, such as fan reaction, in valuing players so that we have such things as the Ryan Howard contract. I’m really curious, if you know, as to whether teams actually do this kind of valuation.

  3. JC says:

    I think the analysis looks different from team to team and agent to agent. Of course, Uggla thinks he can get more. My model doesn’t think so, but his agent likely has information that says otherwise. If he thinks he can sign with a winning team, then he will be more valuable than offer. Risk preferences are subjective. Uggla may not mind risking a lower guaranteed payday for a bigger probabilistic payday.

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  1. […] Uggla turned down a four-year, $48 million contract from the Marlins. Both Ken Rosenthal and J.C. Bradbury wonder why. One reason might be that he produced $78 million worth of value in his Marlins career, […]