David Ortiz: Overpaid or Rewarded?

I'll admit it: David Ortiz is my favorite Red Sox player since I started following the team in the early 80s. He's the most clutch hitter I've ever seen and sitting in Fenway Park and watching his swing is alone worth the steep price of admission. He's one of those players who today's Red Sox fans will tell their grandkids about, and they'll describe him as a majestic, almost super-human presence. Perhaps not surprisingly, he's also incredibly likeable, adroitly handles media and fan requests, and does a lot of charity work. In fact, I don't think you could find a single person who would say something bad about David Ortiz, the runner up for the 2005 AL MVP award. He only further endeared himself to Red Sox fans by taking a steep hometown discount in 2004 when signing a 2-year contract worth $12.5 million, with a team option for the 2007 season at $7.7 million.

So I was naturally pleased to read that the Red Sox are about to sign him to a four-year contract extension worth $50 million. He could have become a free agent at the end of the 2007 season, but now "Big Papi" will likely remain with the Sox for the rest of the decade.

Not all Red Sox fans are happy, though. Some of the baseball guys on the Sons of Sam Horn message board (whose membership includes Sox owner John Henry and pitcher Curt Schilling) believe that the contract will prove to be a financial albatross for the team, and they employ myriad statistical devices to evidence that assertion. The idea is that Ortiz, who is 30 years old, will decline in production over the course of the contract, and that the 2007-2010 version of David Ortiz will be vastly inferior to the outstanding 2003-2005 version. For instance, a poster named "Fratboy" studied Ortiz's "Marginal Value Over Replacement Player" and concluded, "he'll be wildly overpaid in 2008, 2009, and 2010, and these are the weighted mean projections! Any regression that occurs would be detrimental. You shouldn't be paying $13 million for a $4 million player."

Let's say these gloomy projections are correct and that the great Ortiz indeed devolves into a pedestrian hitter towards the end of his contract. Here's my reaction: Who cares? Ortiz has been profoundly underpaid over the last three seasons, so overpaying him now can be seen as a contractual balancing to a most deserving franchise player and one who exudes all of the spirit and passion expected of a future legend. And plus, think of the message it sends to younger Sox players, who might later approach the bridge that could lead them out-of-town for more money: if you're good to us now by taking a hometown discount, we'll be good to you later by overpaying you then. Granted, that's a "risk" that some players may later regret taking, as they may perform worse than expected after taking a hometown discount, but the point is that by overpaying Ortiz, the Sox can more credibly make that promise.

Plus, now the Sox and Ortiz avoid the inevitable distraction that arises when a franchise player starts to publicly discuss free agency, as well as the acrimony that often emerges when that player becomes a free agent. And although no number or statistical equation will confirm this, distraction and acrimony are real costs inflicted upon a franchise, its players, and its fan base. Red Sox fans know that all too well from the team's prolonged, embittered, and ultimately failed efforts to re-sign Nomar Garciaparra, who was eventually traded to the Cubs, or Pedro Martinez, who signed with the Mets (subjects that I address in a forthcoming article in the Brooklyn Law Review).

But more conceptually, should new contracts only reflect future performance, or should they also reflect past performance? In other words, what are we actually paying these guys for, the past or the future or both? And what is loyalty really worth, and what does the absence of loyalty really cost?

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