Eric Hosmer to the Padres – Transaction Analysis

The Eric Hosmer deal has finally happened. Apparently signing on with the Friars last night for 8 years / $144 million, the contract gives Hosmer an opt out after 5 years, after which he will have been paid $20 million per season. If Hosmer opts out, the deal is 5 years / $100 million and it means Hosmer performed well enough that he feels he could get more than the remaining contract on the open market at age 32. The rest of the contract would be 3 years / $39 million. If Hosmer cannot beat that on the open market, he has probably suffered some career decline. I tend to see some interesting points with Eno Sarris’ tweet:

“There’s no way 3/40 in twilight years for Hosmer cripples Pads. 5/100 not crazy. Just… spending that on non elite bat at bottom of defensive spectrum in market that’s DFAing similar bats… Guess SD needs someone to sign now before others might? About ‘18 FAs & building to ‘19?” –Eno Sarris

1. 3/40 for Hosmer’s twilight years is not crippling. Agreed. That is basically Jay Bruce money. In 5 years taking inflation into account, it will buy even less than current day Jay Bruce.

2. 5/100 for Hosmer’s prime is not crazy. Especially considering the Padres are going to be an attractive landing spot for future (better) free agents next year if they can show a semi-competitive young core.

The reason I don’t hate this move for the Padres echoes my last article on WAR consolidation. Last year, Eric Hosmer was worth roughly 4 WAR in a career year in which he OPS’d .882. If, and this is a huge IF, MLB teams thought that was a somewhat likely level of production from Hosmer moving forward, then Hosmer would be worth well-upwards of $20 million per season, with most current $/WAR estimates at $8-9 million. Obviously, most MLB teams have questions about whether Hosmer can consistently replicate his offensive production from 2017. But with Hosmer being a durable 27 year old athletic first baseman, it isn’t the worst bet in the world either. Moreover, if Hosmer does average, say 2.5-3 WAR/season over the first five years, this contract is justifiable. And that seems like a pretty reasonable floor for Hosmer going forward. The Padres take on the risk of an extra 3 years and $39 million of dead money if Hosmer flops over time, but for the reward that if last year’s Hosmer produces at the same 4 WAR rate going forward, there is actually surplus value in this deal.

So overall, the deal is actually not crazy. And how many of us would’ve guessed that going into the off-season?

Leave a Reply

Your email address will not be published. Required fields are marked *