Is Yordan Alvarez’s contract extension a bargain?

Is Yordan Alvarez’s contract extension a bargain?

Houston Astros slugger Yordan Alvarez inked a six-year, $115 million contract extension Friday, ESPN’s Jeff Passan reported. It’s planning to kick-in at the start of next season and it will buy out three of his free agency years from 2026-28.

Passan notes the contract will also be the largest contract ever for a DH at the time of the deal signed; Giancarlo Stanton (formerly an OF) previously signed a deal worth $325 million over 13 years while Miguel Cabrera (formerly a corner INF) inked a contract worth $248 million over eight years. Those still hold the crown.

Nevertheless, Alvarez’s new deal is also the fifth-highest amongst those who haven’t reached arbitration — trailing INF Fernando Tatis Jr. (14 years, $340 million), INF Wander Franco (11-year, $182 million), former C Buster Posey (8-year, $159 million) and OF Mike Trout (6-year, $144.5 million).

Prior to the extension, Alvarez, 24, was set to reach arbitration this upcoming offseason. And yet, even after this: Was this a bargain for Houston?

My instant reaction: Yes. Yes, it was.

And with a few hours after the dust has settled, it still is in my view.

Let’s make the case for it.

Alvarez has solidified himself as arguably the second-best DH in baseball — behind Boston’s J.D. Martinez, who’s in the last year of a five-year, $110 million contract.

In 45 games this season, Alvarez is slashing .272/.367/574 — a .941 OPS (171 OPS+) — with 14 homers and 31 RBI’s, in addition to his 24:33 walk-to-strikeout ratio. (Stats used are thru 6/2)

His 14 home runs are the most amongst the DH’s (min. 100 PA’s) this season, while his 171 OPS+ ranks second and his .941 OPS ranks third. His walk-to-strikeout ratio (0.73) is significantly above-average (0.38) with insane peripherals.

For those who think this is a fluke or an anomaly — for the most part, it’s not. Here were his Statcast metrics for his other two full seasons in 2021 and 2019, when he was dubbed rookie of the year.

In his four-year career (278 games), Alvarez has totaled 143 extra-base hits, 75 home runs, 217 RBI’s while posting a remarkable .287/.370/.576 slash line — equating to a .947 OPS and a 154 OPS+, both ranking in the top-5 in baseball since the start of 2019. Let’s not forget that he won ALCS MVP last year after going 12-for-23 (.522) with a 1.408 OPS against Boston across six games, tallying six extra-base hits and six RBIs.

If you haven’t done the math already, $115 million over six years is about $19.2 million per year, on average. The deal is backloaded, however. The final three years of his contract will be worth north of $26 million while his first three are lower than $16 million.

Here’s his year-by-year salary figure for his extension, per Spotrac.

Yordan Alvarez contract breakdown:

These deals for premium players are commonplace for smaller market teams like the Oakland Athletics and Tampa Bay Rays. And even the Atlanta Braves have gotten away with these types of deals (i.e. Ozzie Albies, Ronald Acuna Jr.) in recent memory.

But Houston isn’t a small market team with a low payroll.

The Astros are 10th in MLB payroll this season at $175.1 million, per Spotrac. They’ve ranked in the top-5 in payroll in each of the last two seasons and are projected to be top-10 in two of the next three seasons. That said, credit to them for locking a deal down at the price they did, and credit Alvarez for securing the bag, though I still believe he could’ve gotten more!

If he can sustain this level of production throughout the duration of this extension, this could absolutely be labeled a bargain from the Astros’ perspective.

If Alvarez isn’t not already, he’d be considered one of the best hitters in baseball. He should be already! And add in the fact that he’s been able to record this remarkable four-year stretch with the different baseballs every year.

Nothing’s suggested the soon-to-be 25-year-old will tail-off anytime soon. To me, Yordan Alvarez is only getting started.

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