The San Diego Padres have reportedly signed Eric Hosmer to an eight year/$144 million dollar contract.Here is why it is not that bad.
On the surface of this deal, anyone who has been following this off-season MLB free agency market is in shock Eric Hosmer got this much money and even more-so the years involved. In the world of analytics and projected performance with age regression, how could this be a good deal you ask? Here’s why.
First, I will lay the foundation to say the San Diego Padres regardless of this signing are going to still be a terrible team next year so do not get a false impression.
However, I do believe they made a great investment for the future and as players start coming up from the minor leagues down the road.
My Predator Baseball projections go in depth with the structure of this contract, and even I was amazed at how well the San Diego Padres front office structured this deal to make it work.
The deal is for eight years, but it is front loaded. In his first five seasons, he will be making 20 million dollars a season. Some may be saying that is insanity, but my Predator Projections say otherwise.
Here is my tweet that breaks it down:
As you can see, based on the analytics, Eric Hosmer will be nearly worth the $20 million per season. He touches it only in one of the first five seasons projection tally but is just slightly under in the others.
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The catch to this deal is that Eric Hosmer has an opt-out after five seasons. Let’s do a bit of calculating. In the first five seasons they are bound together, he will be paid 105 million dollars and finish this by age 33. That is including the 5 million dollar signing bonus. Based on the projections at that point he is worth $90.61 million. That means the Padres escape with slim losses and who knows, maybe he out-performs?
The final three years make the Padres safe, too. They will be paying large sums if for some reason this deal does not work out in a sense Hosmer fails to produce. However, they are not bound in comparison to other long-term deals out there as the annual value falls to 13 million dollars.
In fact, this is a perfect age regression contract. Paid more now and less later once he reaches age 34. Also, there a chance that he performs well up to that age and will opt-out in hopes of gaining more money. That would also mean that he performs well for the San Diego Padres.
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Ultimately, the San Diego Padres overspent a bit to get Eric Hosmer. However, the deal is about as far as I have seen on the MLB free agency market. Front-end loaded and very comparable to projected analytics of him. Maybe this is not as crazy as it seems.