This deal could be both a bargain and an overpay all at once.
If you place the Alex Bregman contract in a vacuum, focus on the $120 million price tag for (up to) three years of service, factor in Bregman having all the leverage with opt outs after each of the first two seasons, and assume the average price of a win above replacement on the free agent market is about $8 million, the Red Sox got boned in this deal.
Over the next three years, Bregman would need to put up 15 WAR for the Sox just to break even ($8 million x 15 = $120 million), and that assumes he doesn’t do so well he opts out to test the free agent waters again — this time without a Qualifying Offer attached. Oh, and by the way, signing Bregman will also cost the club their second highest draft pick this June.
So yeah, there’s no doubt about it! In a vacuum, where only the numbers matter, the Bregman deal is a financial disaster.
But baseball isn’t played in a vacuum, and if you drop an anvil of context down onto the other side of the seesaw, everything reverses.
For the 2025 Red Sox, each win added to the roster is potentially worth tens of millions of dollars based on where they’re likely to end up in the standings. In the macro, we can quibble whether each win above replacement on the free agent market is worth $8 million or $9 million or whatever, (I used $8 million above because the math fits nicely into the contract we’re talking about), but either way, these numbers are a midpoint of extremes, and the 2025 Red Sox are probably going to be on the high end of one of those extremes.
Once you start zoning in on specific teams and circumstances, the broad brush mathematics go away. A player who adds three wins to a 72-win team and makes them a 75-win team is simply not bringing the same impact as the same player who adds three wins to an 84-win team and helps push them to an 87-win Wild Card birth. Or better yet, turns a 92-win Wild Card team into a 95-game division winner.
When you’re near thresholds, wins matter more, and the 2025 Red Sox appear to be right in the thick of several key thresholds in the standings. Betting sites and projection systems across the board generally have them winning 80-85 games.
At the same time, if you go to Bregman’s FanGraphs page, you’ll see eight different projections systems pegging him to finish somewhere between 3.1 and 4.0 fWAR in 2025. In other words, the odds are unusually high that a player of Bregman’s caliber could bump Boston up a level in the playoff standings, and if that happens, each win they overpaid for suddenly becomes worth its weight in gold.
On a short deal, it’s much easier to plug a player like Bregman into a set of years where he’s likely to be a difference maker, whereas on a long-term deal, his impacts are increasingly less likely to be the difference maker the deeper you get into the contract. This is both because the number of wins he adds each year will likely shrink with age, and because Boston’s position on the win expectancy scale becomes increasingly unpredictable the further out you go in time. So the strategy here is pay and overpay for wins that might put you over the top in the short-term, and then don’t pay anything in the long-term at all, at least not for free agents.
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In addition to this, it’s important to note that short-term deals rarely burn big market clubs. The contracts that cripple the books tend to be the ones that run the better part of a decade and are given out after players have been in the league long enough to test free agency. This is where clubs often end up paying a boatload of money for little to no production at all for several years. And, worse yet, since these deals are so long the player can become a total mismatch for the club’s needs on the back half of the deal, when the team often finds itself in a different place in its success cycle than it was when it originally signed the player. At that point, the club isn’t just overpaying money (paying $15 million per win that they need), they’re flat out wasting it (paying whatever the number comes to for wins they don’t need).
One the flip side, if you overextend on a short-term deal, you can immediately go back to the well and try again. This is what the Red Sox SHOULD be doing, and it’s possible that it’s what they are doing with all the short-term stuff to Walker Buehler, Aroldis Chapman, Patrick Sandoval, and now Alex Bregman. But for now, they don’t deserve any credit for this strategy because it would be quite easy to weasel out at any moment and stop investing in the on-field product any give year. However, if they follow through, there’s a pretty sweet avenue here where a shrewd front office just keeps cycling through short-term deals to fill holes over several years, and in doing so, keeps the team younger and more productive through the turnover. If you’re ever wrong with a short-term deal, you can bounce back the next year real quick.
By doing it this way, you’ll end up paying more money for the productive years than you would’ve in a long-term deal, but you’re also never flat out wasting the money in the dead contract seasons. In other words, you’re more willing to overspend, and less willing to waste. On top of that, it comes with the added benefit of being able to specifically spray the free agent wins at positions of need, which are always more obvious in the short-term than the the long-term.
Photo by Maddie Malhotra/Boston Red Sox/Getty Images
This is where the Alex Bregman deal could be part of something we haven’t seen from the Sox before. They’ve been on this short-term deal kick with free agents for a little while now, but they’ve never spent this much on one and simultaneously given up all the leverage. As Bryan Joiner notes, this part of the deal is bad business.
However, if it’s embedded within a larger strategy of overpaying for wins on the free agent market that are specifically more likely to push the club over certain playoff thresholds in the short-term while requiring no commitment in the long-term, it could work.
This is especially true if you believe Bregman is the missing piece the Sox clubhouse needs, providing the veteran leadership that’s been lacking in recent years. This part of the equation is less tangible and more debatable — but it can make or break those building the roster if they over or underestimate its importance. Once again, given where the Red Sox are in the success cycle (a rising team with young players emerging from the farm), this is an area where Alex Bregman can provide additional value, or at least as much as that value exists.
Now, in order to truly make this short-term deal work as part of a long-term philosophy, the Red Sox need to complete one other immensely important step in the process: Sign their young players to long-term extensions. (This includes Garrett Crochet, still only 25, who the Red Sox already bet four prospects on becoming a legit ace). The idea here is that you hand out the long-term deals to guys when they’re younger, which is both less likely to leave you with washed-up players on the back end of contracts like you get with free agents who sign when they’re older, and also allows you to manipulate the luxury tax.
Specifically, now that the Red Sox have signed Bregman and are likely to be over the luxury tax in 2025, they should go way, way over that number! If done correctly, they’ll do this by structuring deals to young players like Crochet, Kristian Campbell and Roman Anthony so that the money slowly rises each year (to mirror the arbitration-to-free-agent pipeline). By doing this, the Average Annual Value (AAV), which stays flat throughout the life of the entire contract, will be much higher than the player makes in 2025 (who cares!? You’re already over the luxury tax number anyway!) but then will be much lower down the road compared to the real money the players are making. That time period three or four years down the road is where you take advantage of your leverage.
Signing the young guys to long-term extensions, coupled with Bregman’s contract not being a six or seven year monster, allows you to keep windows wide open where you can reset the luxury tax. As noted last month:
The luxury tax system is designed to hammer teams who repeatedly cross the threshold by increasing penalties for each consecutive year they venture beyond it. It’s a 20% penalty for a first year offense, a 30% penalty for a second consecutive year, and a whopping 50% penalty for going over it a third consecutive time. However, if a club dips below the luxury tax threshold for even one season, the penalty resets when / if they go back over in future years.
So again, if the Sox extend the good young players and keep signing free agents to short deals (even and especially on overpays), they could be on the verge of an extended run of playoff contention or even World Series contention. But until they actually complete the other pieces of the puzzle, the rest of the picture doesn’t really matter. We just don’t know if they’re going to keep acting this way.
For now, the Alex Bregman contract shows you how high they’re willing to go and overpay if the deal is short and the time is right, and that’s something we haven’t seen from this iteration of the Red Sox. Now the question is how much of this is part of a larger cohesive strategy, and how much of it is just their latest overreaction. Oddly, the deal only strengthens both arguments.