Eight years might seem like a very long time to commit to a baseball player, and it usually is. Extensions can be risky, especially as players get older, but that doesn't mean they should never happen. Minimizing risk by being picky about just who gets extensions, while also keeping dollars to a comparative minimum, is about the best a team can do besides simply letting all of their best talent walk.
The Red Sox and Dustin Pedroia managed to strike that balance with his eight-year extension that will kick off in 2014, replacing the final year of his current deal. That's because the Red Sox are only paying Pedroia $110 million over the life of the contract: that might be the most money Pedroia has ever signed in a deal -- in fact, it's roughly four times more than he will make on his current extension -- but in terms of the state of present-day MLB, it's basically nothing.
Pedroia gets a guaranteed $110 million, a no-trade clause, and is held up as the face of the franchise and the model citizen that all the future Red Sox on the farm should aspire to become. The Red Sox get a player who remains a star through the rest of the years of his contract in which this will be true, and get to continue paying him well below-market for that privilege. Will he be overpaid in the later years, when he's a late-30s second baseman? Probably, though thanks to inflation, not by as much as it might seem through the lens of 2013 dollars. The thing is, though, that by getting him so cheap in the earlier years of the contract, and keeping the average annual value as low as it is throughout the life of the deal, it almost doesn't matter that there could be a season or two at the end that won't go well.
Average annual value is what matters when the luxury tax comes into play. It doesn't matter if a a player makes $10 million one year and $25 million the next on a two-year deal -- their contract would count for $17.5 million against the soft cap of the luxury tax threshold. Pedroia's comes out to $13.75 million over the eight-year extension, which, while not nothing, isn't much more than that considering what he can produce. For context, the 2013 qualifying offer, which is comprised of the average salary of the top 125 contracts in baseball, came out to $13.3 million, and is likely to rise to $14 million, if not more, by the time the off-season rolls around and 2014 free agency kicks off. Pedroia, who is one of the game's best players at present, and probably for a few more years, will make less money per year for luxury tax purposes than the average of the game's 125 highest-paid players.
The deal looks great now, but wait until Robinson Cano signs a contract for upwards of $200 million. It's not that Cano doesn't deserve the massive pay day, it's just that if you had to choose between the two and what they would cost, Pedroia would now win that argument every single time. Maybe Cano will surprise us, though, now that he's free of Scott Boras, and sign a hometown friendly deal akin to Pedroia's that still pays him, and maybe sets a new record for second baseman contracts, but doesn't reset the entire market as is expected. If not, though, then it's a pretty easy choice between the two going forward. That by itself is impressive, because, despite their disparate skill sets, they have been neck-and-neck in value for much of their careers, in the same way Nomar Garciaparra and Derek Jeter were once inextricably linked until injuries intervened.
Injuries, of course, are a risk of any extension. Pedroia has had a few over the years, as his hamate was removed in 2007, and he has suffered a broken foot and multiple hand injuries since. He's not injury prone, though, and the Red Sox will attest that he works as hard as anyone in the game to stay on the field and produce. If you need proof, he's currently playing through a fully torn UCL in his thumb, suffered on Opening Day. He's hitting .306/.384/./420 with his usual incredible defense, and has missed one game all season despite this.
Luckily, too, if he does end up missing time, his contract does not represent a significant stumbling block for the organization: the cost is low enough that replacements could be brought in, even expensive ones, if necessary, especially in concert with all of the low-cost prospects the Red Sox expect to field and build a core around during the first few years of the contract. Those prospects are just one more reason why the Sox want Pedroia around: he's the model for them, the hard-working and special player, and they wanted him to be that player and that person for Boston only, linking past successful Red Sox teams with those of the present and the future. At this price, it's hard to take umbrage with that ideal.