When Aaron Judge signed his massive $360 million contract this past December—and when Shohei Ohtani signs an even bigger one next winter—there was/will be arguments about whether the price was too high, too low or just right.
But to decide whether a player lives up to the cost of his contract, we need to first figure out how much a win (above replacement) actually costs these days.
A decade ago, the math conducted by FanGraphs' Matt Swartz suggested the cost of one win above replacement in free agency was just under $5 million.
But teams aren't exactly spending like they did a decade ago, are they?
Back in 2013, the average payroll was around $106 million per team.
Last year, it was $150.7 million.
Heck, five teams are spending at least $106 million just on pitching in 2023.
During the 2020-21 offseason, teams spent a grand total of $1.36 billion in free agency, per Spotrac. The average annual value of those contracts was $7.3 million.
Last offseason, that average was $12.7 million.
This offseason, we're at a staggering $15.7 million, though, that number figures to decrease as any remaining free agents who sign will surely do so for less than $15 million per year. But even if that average drops by $1.1 million, that'd still be a 100 percent increase from just two years ago.
Even the inflation rate on a dozen eggs at your local grocery store probably hasn't been that extreme.