There won’t be any graphs, spin rate charts, or very analytical content today. There will undoubtedly be some thick statistics (I can’t help myself), but this piece will essentially serve as the debate club’s opening argument, after which we will argue the advantages and disadvantages in the comments section.
I’ll start by saying that Tommy Edman is one of my favorite players and that I support him. In order to determine whether or not the Cardinals were wise to forego this contract extension, I also want to look at the contract he signed and the information it contains. As it happens, there’s a lot to explore here. Note: Since the Cardinals had previously purchased Edman’s final NBA season and were scheduled to pay him $9.5 million in 2025 as the final year of a two-year contract, this was seen as a contract extension.
Let’s start with the trade
Eric Fedde and Tommy Pham were acquired by the Cardinals in exchange for Tommy Edman and Oliver Gonzalez, an unidentified minor leaguer. The Cardinals essentially exchanged 1.5 years of Eric Fedde for 1.5 years of Tommy Edman, despite the Dodgers’ involvement and Edman’s eventual move to Los Angeles. Each were scheduled to enter the FA market after the end of the 2025 season. For the 1.5 years, their estimated WAR would be about identical. One may argue that Edman’s fWAR projection was a little higher, but his compensation was also higher at $9.5 million compared to Fedde’s fixed $7.5 million deal.
Functionally, the Cardinals moved equal parts salary and fWAR value from a position player to a pitching spot. They didn’t add. They recently re-allocated.
Let’s break down the extension
Tommy signed a $74 million contract agreement with the Dodgers after the 2024 season ended with a Dodgers World Series Championship. This extension would buy him out of the second year of his Cardinals contract, which would have been his last ARB year, as well as an additional four years. This deal contains a $13 million club option with a $3 million buyout for the 2030 season, when Edman would be 35. His 2025 compensation is $22 million, which includes a $17 million signing bonus and a $5 million salary. He will then receive $12.5 million for the next four years. They really only pay him $6.25 million in each of the last four years since $25 million of that amount is delayed.
As an aside, it is difficult to overlook yet another instance of a team back-loading (with deferrals) and front-loading (with signing bonus) a deal. In order to determine the competitive edge, I’m keeping an eye on this trend. Clearly, these teams perceive one. According to my first theory, the competitive advantage arises from removing the majority of the competitors for player services because most clubs lack the financial resources to achieve this.Really, do you think the Cardinals would pay a $75 million signing bonus to Soto or $52 million to Snell? My second theory is that the big money teams are betting (and can afford to bet) that revenues will rise at a faster rate than the league mandated discount rate, thus discounting the deferrals even more than already are, reducing their potential impact on out-year finances. My third theory is that there is a difference in money calcs between what a team has to escrow for deferred payments and how they treat the contract for CBT purposes.In the Edman contract, that is about $1.6m/yr CBT reduction. In the Dodgers world, a $1 of CBT savings likely saves another $1 in CBT tax. Stated another way, the AAV of this contract is $15m/yr on the surface. The CBT AAV of this contract? $13.4m. The true cost of this deal (NPV) is $11.7m/yr. The Dodgers discount the CBT value (for the 5 year he plays) saving CBT tax dollars, then really pay him in the years that CBT doesn’t care about. According to my rough calculations, Edman’s deferrals ($25 million, non-discounted, to keep things comparable) are covered by around 30% of the CBT savings ($8 million, non-discounted).One might note that such CBT “savings” would appear to shift part of the cost of the contract to revenue sharing recipients (they don’t receive $$ the Dodgers don’t pay via CBT). That would be smart, huh? These theories are not exclusive (and all untested). Let’s return to the article’s primary focus. More on this subject when my financial specialists solve the issue during the upcoming off-season.
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To break down the contract a bit more, here are some numbers
This $74 million contract has a Net Present Value (NPV) of $58.9 million in current currency. Edman projected to produce 13.9 WAR over the remaining five years of the deal if you apply aging curves, which were covered last week HERE, to his average peak WAR of 11.3 WAR for ages 26–28. The Dodgers are getting a decent (great?) bargain with this contract, which has a per WAR cost of about $4.2 million based on that forecast. This contract has the potential to provide some excellent excess value because contracts for players with 2.5–3 WAR typically cost $6–7 million per WAR. What if he had another five-warrior season in a $6.25 million contract year? That’s surplus value, then.
Should the Cardinals have considered keeping Edman and giving him such a contract?
Many factors to take into account. I can think of arguments for both sides of this dispute. After I set them out, readers are free to contribute their own ideas. I don’t see it as clearly as some people do. We do have the advantage of being able to see what the Front Office would have taken into consideration, and we are ultimately aware of the choice they took, assuming the FO had a solid read on Edman’s possible FA market.
Reasons to make the trade and avoid the contract
1. Is it wise to provide mid-range players long, costly (approximately) contracts? It spends limited funds that could be utilized to hire top people.
2. Players that generate value with their power stats typically land higher-dollar contracts. The higher dollar market of O’Neill, Santander, Hernandez, and even Ohtani and Soto is far more than Edman’s.727 lifetime OPS. Edman’s mobility, base running, and defensive skills are what really make him valuable.
3. Edman’s main contributions are at spots where the Cardinals seem to have depth and where the talent is earning far less than Edman’s fair contract rate. Redistributing limited resources in this way was a wise move ($).
4. The Cardinals refused to pay Edman $21 million for a QO, which the market would have valued at around $10–$12 million annually. Therefore, they were unable to hold Edman and allowed him go to FA in order to obtain a draft selection. By switching to Fedde, the quarterback enters the game (he is expected to make over $50 million this winter). They will either keep Fedde or trade him and obtain a late second-round pick, which is likely more valuable to the Cardinals given their goal of reviving the development pipeline.
5. Given the Cardinals’ present cost-cutting strategy, the financial concerns associated with large signing bonuses and long-term deferrals are out of their league.
6. The timing was incorrect to sign this athlete to this deal at this moment. At a time when the new management wants the most freedom, it would put the team under pressure with yet another long-term deal (likely with another NTC).
7. Edman, 30, had two subpar seasons before that because of injuries. This is very risky. When a player is between the ages of 30 and 35, the main concern is not that their performance will deteriorate quickly—that does happen—but rather that they may get an injury and never fully recover. It is a 50/50 chance that a player who is typically 30 years old will continue to play at age 35.
Reasons to NOT make the trade and give the contract
1. The contract he signed has a surplus value that is appealing and appears to be a wise investment. The front office in St. Louis has been having trouble paying mid-level talent market prices rather than below-market ones. Surplus value is always beneficial, particularly for a player that can be plugged in practically anywhere.
2. Edman has inherent worth that would be attributed to his playing with the Cardinals for the majority, if not all, of his career. He would be Red Jacket material as a player with (estimated) 30 WAR. He would be a welcome addition to that pipeline, which now appears to be a bit thinned down. Part of the special formula for Cardinal’s marketing success is the company’s history and customs. In this area, they need a couple more victories.
3. By keeping Edman, this team’s RH/LH platoon splits would be more evenly distributed and Donovan could be moved, potentially bringing in good pitching.
4. The Cardinals will eventually need to have a business plan that enables them to compete for these types of deals. The Cardinals will need to compete in this market if players like Edman are receiving large contracts, even if they are not at the Soto, Ohtani, or Harper level.
5. Edman’s worth stems from abilities that don’t deteriorate much between the ages of 30 and 35. Gloves, quickness, and some proficiency with RH hitting. Even at age 35, he is a good candidate to be given the option.
There are undoubtedly more advantages and disadvantages, but I’ll stop here and let others debate it.
