By now, it is old news. Alex Rodriguez and the New York Yankees have agreed to an outline of a 10-year, $275M contract, but how much is he really worth? To find the answer, I referred back to Baseball Prospectus's Baseball Between the Numbers, in which Nate Silver wrote chapter 5-2 "Is Alex Rodriguez Overpaid?" Nate found that the answer is indeed yes, but "[s]everal other enormous deals were signed that winter, including a $160 million contract with Manny Ramirez, $121 million to Mike Hampton, $55 million to Darren Dreifort, and $51 million to Denny Neagle, each of which have turned out to be similarly problematic investments." In that chapter, Nate performs a logistic regression analysis on previous team revenue figures to find the value of a win, which is presented in the form of an expected local revenue chart as a function of regular season wins. Using that chart, I have broken down each team's expected gain from signing Alex Rodriguez to determine his actual value for 2008. While the ultimate goal would be to be able to do this for as many years into the future as possible, going past 2008 is beyond the scope of this exercise.

Team Baseline

In order to create a baseline that each particular team is working from, I used third-order wins from the Adjusted Standings Report available at Baseball Prospectus with adjustments for departing free agents using Wins above Replacement Player (WARP). Since these free agents are not currently on a roster and their projected wins are still on the proverbial shelf, the wins currently only average out to 79.8. The following table shows where I have each team positioned with comments to explain deviation from the Adjusted Standings Report (remember that midseason trades and injuries from last season will also move team wins up or down):

Value of Rodriguez to Each Team

With the team baselines out of the way, it is important to remember that the player Alex Rodriguez would be replacing is different for each team. Replacing Nick Punto is very different from replacing Aramis Ramirez or Derrek Lee, so each team gains a different number of wins from adding Rodriguez. Using WARP, I have calculated how many wins he would add to each team (assuming he can only play first or third and he's worth 9 WARP next year) and how much revenue those wins would generate based on Nate's chart. The following table shows how Alex Rodriguez changes each team:

From the table, you'll see that the Twins would gain the most in wins from adding Alex Rodriguez, but given the current state of the team, those wins would only produce $8 million in revenue, or less than the Mets ($15M), Dodgers ($10M), and Rockies ($15M) could expect from Rodriguez's 4 wins he could give them. In terms of increased revenue, the Los Angeles Angels of Anaheim and Toronto Blue Jays come out as Rodriguez's best suitors at $29 million. Unfortunately for the Blue Jays, their team isn't set up for the long haul, so a long-term deal with A-Rod just wouldn't make sense. The Angels, on the other hand, are set up for the long haul, but perhaps too well for a long-term deal with Rodriguez to make sense. They probably don't need Rodriguez to be the best team in their division. These, or similar, arguments could be made against signing A-Rod to a long-term deal for just about every team. Instead of making each argument, we'll skip to saying that Rodriguez's market was limited to the New York Yankees ($21M) and Philadelphia Phillies ($25M).

Verdict

If Rodriguez had not come back to talk to the Yankees, the Phillies are essentially the only team left. Since two bidders are needed to drive up prices, Alex had to talk to the Yankees. In the end, Alex Rodriguez is worth anywhere from $25 to $30 million in 2008, but in ten years and at age 41, it's doubtful he'll still be worth that much even after inflation.

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Just as a side note, if I had considered the Yankees to have already brought back Rivera before Rodriguez, Rodriguez's value to the Yankees from this exercise would have dropped to $17 million in 2008.