The Risks of Signing Pujols

Without question, Albert Pujols is going to command the largest contract of the offseason. And while there will much rejoicing in the streets for fans of the team that signs him (or re-signs him, in the case of the St. Louis Cardinals), they should know that Pujols’ next contract figures to be one of the riskiest in the annals of free agency.

Pujols, obviously, is a future first-ballot Hall of Famer and still one of the top hitters in all of baseball. Last season, his numbers slipped a bit, but he still managed to finish second in the NL with 37 home runs. As well, his wRC+ of 148 is the same as his mark in 2002, which reflects the fact that offense was down across all of baseball last season.

With all that said, the fact remains that Pujols is in decline. His wRC+ peaked in 2008 at 184 and then began a steady downward trend: 182 in 2009, 165 in 2010 and last season’s 148. Given his age, none of this is especially surprising. Last season, Pujols suffered a precipitous decline in his batting average on balls in play (a career-low .277), which could be somewhat attributable to bad luck/random variation or could be the symptom of a slowing bat. He also experienced a spike in his ground-ball rate — it jumped from 38.3 percent to 44.7 percent — which is potentially a troubling sign.

It bears repeating that Pujols remains a top-tier hitter and probably will remain as much for the next handful of seasons. The rub is that the market will likely treat him as something more than that.

If the rumors are any guide, then Pujols received a nine-year offer from the Cardinals last offseason and perhaps from the Miami Marlins last week. Since Pujols will turn 32 in January, that means a nine-year pact would run through his age-40 season. The average annual value of his next contract will surely exceed $20 million per, so that means Pujols will almost certainly fetch a deal in excess of $180 million over nine seasons. The whims of the market could alter those parameters, but that’s a fair guess at the minimum buy-in.

So you’ve got a slugger who’s in his 30s and already showing signs of decline but who’s also poised to fetch what will be one of the most lucrative contracts ever. Needless to say, the team that signs him will be assuming a great deal of risk.

The usual high-revenue suitors — i.e., the New York Yankees, Boston Red Sox and Los Angeles Angels — almost certainly won’t be bidding since they are set at first base. As well, stalwarts like the Los Angeles Dodgers and New York Mets won’t be in the running thanks to owner incompetence (Mets) or malfeasance (Dodgers). So Pujols will likely fall to a club that may not be able to budget around him once he becomes a liability. To be sure, Pujols is a “brand-building” type of player who helps the bottom line over and above what he does on the field. Still, though, it’s lot of money and a lot of years for a player whose best days are almost certainly behind him.

In terms of historical comparables, the contract Mark Teixeira signed in advance of the 2009 season is probably strongest in terms of dollars and length (eight years, $180 million). The distinction, however, is that Teixeira was 28 when he inked his deal. And even that contract looks as though it could wind up being a burden.

Once age and contract dimensions are both considered, Alex Rodriguez’s 2007 mega-deal with the Yankees is perhaps most instructive. Pujols won’t match the $275 million lavished upon Rodriguez, but the contract length won’t be far off. Rodriguez was 32 in the first season under the contract in question, just as Pujols will be in 2012. Rodriguez in that first year put up strong numbers, but his descent since then, both in terms of productivity and durability, is undeniable. Since Rodriguez’s deal runs through 2017, things are going to get even uglier.

On this point, it’s worth noting that Pujols, as a first baseman, is already on the far left end of the defensive spectrum, so there’s no place to move him (in the National League, anyway) as he ages and loses mobility and athleticism. The other difference, of course, is that Rodriguez toils for the Yankees, who are uniquely positioned to withstand bad contracts. The team that signs Pujols — which almost certainly won’t be the Yankees or anyone else of their tax bracket — won’t be similarly blessed. If, say, the Cardinals are paying Pujols $20 million per (or more) for his age 36-40 seasons, that could be a serious drag on the team’s ability to build a competitive roster around him or treat him as a sunk cost.

A perfect lesson in this regard is the Minnesota Twins. Just a year-and-a-half ago they were lauded for signing hometown hero and reigning AL MVP Joe Mauer to an eight-year, $184 million extension. Mauer was just about to turn 27 at the time, and it looked like a no-brainer. However, he has been dogged by leg problems, and has hit a total of 12 home runs since signing the contract. There is already talk of moving him off catcher, and he will be paid $23 million per year through 2018 while occupying anywhere from 25 to 35 percent of the Twins’ payroll.

Overpaying at the back end of a contract in order to wring value out of the front end is nothing unusual. But considering Pujols’ age, performance trends, appeal on the free-agent market and the decidedly un-Yankee-like resources of the team that eventually signs him, Pujols’ next contract can be regarded as one of the riskiest we’ve ever seen.