There was quite a bit of uproar and snickering this week when the Rays avoided arbitration with BJ Upton and gave him a one-year deal worth $4.825 million. That contract represented a raise over his 2010 salary ($3.0M) and made Upton the Rays highest-paid player.
Many think that is way too much for a player that hit .241 last season with only 9 home runs and what seemed like a never-ending string of bone-headed plays. But under Major League Baseball’s pay structure, Upton’s new contract is exactly what he is worth.
In general, barring a long-term extension, players make close to the the league minimum (~$400K) their first three years. In the next three years, players are eligible to have their salary determined by an arbitrator before becoming eligible for free agency after six years.
Upton is entering his second year of arbitration eligibility. To determine how much a player is worth in arbitration, it is best to look at comparable players from recent years that were also in their second year of arbitration eligibility.
In the case of Upton, the best comparison was Shane Victorino of the Phillies. If we compare the two players in the two seasons prior to their second year of arbitration this is what we see…
We see that Victorino is clearly the superior offensive player. But Upton betters the Phillies center fielder in stolen bases and defense (UZR/150). Overall, Victorino was worth 1.8 more Wins (WAR) in those two seasons.
Now we can look at what Victorino made in arbitration and then scale it back.
Following the 2009 season, Victorino requested $5.8 million in arbitration. The Phillies offered $4.75 million (the arbitrator must pick one or the other). The two sides would eventually avoid arbitration by agreeing to a long-term deal in which Victorino was paid $5.0 million for the 2010 season.
If we assume the $5.0 million was a slight discount for the security of the three-year extension, then we can guess that Victorino’s true value was a little more. Let’s say $5.3 million which is right in the middle of the figures submitted to the arbitrator.
So if Victorino was worth $5.3 million in his second year of arbitration, and Upton is a comparable, albeit slightly lesser player, then it is perfectly reasonable to believe that Upton is worth $4.8 million for the 2011 season.
So if Upton’s new salary upsets you, your anger shouldn’t be with Upton or the Rays. Rather, be angry at the system that says Upton is worth that much money.