This afternoon, the St. Louis Cardinals announced that Jhonny Peralta would be designated for assignment, with Kolten Wong being activated from the 10-day disabled list. The move puts a justified end to Peralta’s time in St. Louis, which has been incredibly frustrating over the last two seasons. With Peralta’s Cardinals tenure now all but over, I decided to look back and evaluate his contract with the full benefit of hindsight.
To determine the value produced, I multiplied his seasonal WAR by an estimated cost of WAR in free agency prior to that season. For 2017, this was $9 million. In 2016, most research indicated it was about $8 million. Prior to 2016, I used a 5.5% inflation rate consistent with opening day payroll growth to back into an estimated cost of $7.6 million in 2015 and $7.2 milliion in 2014.
Wins now are worth more than wins later, and wins later come with significant risk. Therefore, I applied an 8% discount rate to surplus values, which reflects this reality. This rate is suggested by The Point of Pittsburgh’s research assumptions. Since 2014 was the first year of Peralta’s contract, his production in 2014 is what “wins now” means in this case, with 2015 – 2017 classifying as “wins later.”
Even though Peralta has been DFA’ed, the Cardinals still owe him the rest of his $10M salary for 2017. Owing to that fact and his below-replacement-level production in each of the past two years, Peralta was worth a negative $4.3 million “surplus” over the life of his contract, meaning the St. Louis Cardinals overpaid just slightly.
It’s hard to criticize this deal, though. Jhonny Peralta was the most valuable shortstop in the entire MLB in 2014 while leading the St. Louis Cardinals with 5.3 WAR and receiving MVP votes. He got off to a strong start in again in 2015, making the NL All-Star team before falling apart in the second half of the year. He never really recovered from that slump and was a source of constant frustration and mismanagement in both 2016 and 2017.
Ultimately, a negative $4.3 million surplus value is nothing to complain about. St. Louis paid a fair price for Peralta and he played a key role in the Cardinals 2014 and 2015 success. While his career in St. Louis came to a sudden end, he helped extend the Cardinals long run of success over the past 16 years.