Astros: What would a new contract for Jose Altuve look like?

Jose Altuve is the 2017 AL MVP and the second baseman only made $4.5 million. That’s downright absurd.

It’s no secret that major league baseball players are well-compensated compared to the average public. Most of the general populace balk at the salaries professional athletes demand, and receive, when compared to their own actual income. I have the tendency to do as such myself. However, the salary is also relative to your particular industry. And relative to baseball salaries for the MVP-caliber players, Astros’ second baseman Jose Altuve is vastly underpaid.

The Astros, almost immediately following the World Series, exercised the first of two club options on Altuve’s contract. He will earn $6 million in the upcoming 2018 season. Barring something unforeseen and catastrophic, Houston’s front office will certainly exercise the 2019 club option for $6.5 million. Altuve, for all intent and purposes, has been one of the most valuable players in baseball and his contract is one reason why that is the case.

Now, let’s discuss a set of hypothetical contracts.

Say Altuve somehow ended up as a free agent in this off-season? What would a hypothetical contract look like based on his projections this off-season? Again, this is all hypothetical. I am just curious on what a reasonable estimate would’ve been in light of the current free agent market.

Thanks to Fangraphs’ Contract Estimation tool, I can reasonably project Altuve’s future earnings. I base this estimate on his projected wins above replacement (5.7 zWAR) per ZiPS, a five percent inflation rate, a standard aging curve and the cost of a win over a five-year term. A five-year term I thought was a reasonable starting point in light of today’s labor complications. The cost of a win today is roughly $8 to $9 million depending on who you ask. For this exercise, let’s agree on $8.5 million per win.

Side note: Steamer’s 4.4 WAR projection for Altuve seems a bit low. That would be his lowest Fangraphs WAR since 2013 when he posted just 0.7 WAR. Of course, projections have had a difficult time with Altuve, so take the projections with a grain of salt. ZiPS projections, courtesy of Dan Szymborski, seems to be more reasonable for Altuve.

Hypothetical #1: Ages normally

Jose Altuve’s Contract Estimate — 5 yr / $252.5 M

Assumptions

Value: $8.5M/WAR with 5.0% inflation (for first 5 years)
Aging Curve: +0.25 WAR/yr (18-24), 0 WAR/yr (25-30),-0.5 WAR/yr (31-37),-0.75 WAR/yr (> 37)

Based on the criteria I mentioned earlier, the first hypothetical contract has Altuve receiving a five-year, $252.7 million commitment. This contract has Altuve being worth 27.0 wins above replacement. That’s not bad value for a MVP-caliber player in his prime seasons.

The key difference among this estimation and ones that will follow is this: the contract estimator provides four options for an aging curve: ages normally, ages well, ages poorly and manual. Since I’m not skilled enough to input my own aging curve, I’ve decided to stick with the options already provided. And the first one you can see in the graphic above was the ages normally curve.

If there was a takeaway from this hypothetical, the Astros or someone else will pay Altuve a lot of money. And he’s worth it as he is still in the prime years of his career. This is probably a fair deal for both sides when you consider the factors at play.

Hypothetical #2: Ages poorly

Jose Altuve’s Contract Estimate — 5 yr / $227.8 M

Assumptions

Value: $8.5M/WAR with 5.0% inflation (for first 5 years)
Aging Curve: +0.25 WAR/yr (18-24), -0.25 WAR/yr (25-30),-0.75 WAR/yr (31-37),-1 WAR/yr (> 37)

For Altuve’s sake, a poor aging curve based on the same value per win and inflation would cost him $24.7 million over the five-year lifespan of a hypothetical new contract. In the first three seasons, though, Altuve would still be a five-win or so player. Even the last two seasons has Altuve at being a productive major league player.

Remember that a starter in the major leagues should produce something similar to 2.0 WAR in a single season. Altuve would clearly be worth more than a simple starter. This deal would be a blow to Altuve’s career earnings, but the Astros, or any team, would still receive quality value.

Hypothetical #3: Ages well

Jose Altuve’s Contract Estimate — 5 yr / $260.1 M

Assumptions

Value: $8.5M/WAR with 5.0% inflation (for first 5 years)
Aging Curve: +0.25 WAR/yr (18-24), 0 WAR/yr (25-30),-0.25 WAR/yr (31-37),-0.5 WAR/yr (> 37)

This is the aging curve would clearly produce the best contract for Altuve and his family: a five-year, $260.1 contract. Interestingly enough, the estimation based on this particular aging curve is not too far off from the first hypothetical I’ve discussed. Only a 0.8 difference in total WAR.

Under this estimation, Altuve would remain near a superstar level in baseball through the entirety of the contract. In other words, relative to the current salary structure and cost per win in baseball, Altuve would be worth every penny.

Under each hypothetical estimation based on the criteria I mentioned earlier, Altuve will be an expensive player in about two years’ time. A $200 million contract probably wouldn’t get the job done if he posts a similar results like he has since the 2014 season. A contract between $240 and $260 million would be the likely starting point.

Next: Houston Astros closer Ken Giles wins arbitration case

Of course, Altuve could perform better or worse in the meantime, which would obviously impact his negotiating power. Remember that agent Scott Boras now represents the current AL MVP, so any hope of a discount for the Astros goes out the door. The same applies to any other teams interested in his services. Regardless, the Astros, and Altuve, will have an interesting choice to make in two winters from now.

**Statistics courtesy of Fangraphs**