January 5, 2010

Extended Holliday

The Cardinals and Matt Holliday reached an agreement on a seven year contract:

A person familiar with the negotiations says outfielder Matt Holliday and the St. Louis Cardinals have agreed to a $120 million, seven-year contract.

St. Louis announced Tuesday it had reached agreement on a multiyear deal subject to a physical and a formal announcement was likely by Thursday.

Holliday’s agreement, which includes a $17 million vesting option for 2017 with a $1 million buyout, is baseball’s largest of the offseason. It contains deferred money that lowers its annual present-day value to about $16 million.

So in present value, it’s not that different per year than what Jason Bay is getting. Holliday is a year younger (based on seasonal age), so he’s a bit of a better risk for a longer term contract.

It also could be the years are a way of smoothing out the money Holliday wanted. According to WAR, he’s been worth well over $20 million per year the last few years. By spreading $120 million over seven years instead of six, it’s a bit easier for the Cardinals to pay him, and that extra three or four million dollars they save might be enough to keep Pujols happy.

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