We still don’t understand how good Alex Rodriguez is. When he signed a $252 million, 10-year contract in December 2000, there were two prevalent reactions: “The sky is falling!” and “He’s really good, but Texas overpaid.”

Still, you could argue that A-Rod was worth it at the time. The sky seemed the limit for salaries, and A-Rod at $25 million made a lot more sense than Manny Ramirez at $20 million or Derek Jeter at $19 million.

Since the new CBA was signed in 2002 though, the market has corrected itself, and the days of the $20 million contract are over, no matter what Vladimir Guerrero‘s agent thinks. In the new market, you’d think A-Rod can’t possibly be worth $25 million a year, no matter how well he plays. You can sign two A-list studs for that kind of money now, not just one plus Darren Oliver.

There seem now to be four widely held opinions about Rodriguez and his contract:

  1. “No baseball player should make $25 million a year! My third-grade teacher was wonderful, and she makes $15,000 plus benefits.”
  2. “A-Rod is overpaid, and the Rangers suck. It’s too hard to win a championship when one player is making so much money.”
  3. “$25 million is too much to pay any one player, but A-Rod comes closest to being worth it, and he would help any team toward a championship, as long as the team spent the rest of its money well.”
  4. “A-Rod is worth every penny, and one of the best possible ways to spend $25 million.”

Opinion A, though widespread, is irrelevant. Your third-grade teacher might be helping more people than A-Rod, but nobody’s signing a $250 million cable deal to televise her classes. Among baseball fans, Opinion B is perhaps the most popular, but it’s also wrong–it’s obviously not A-Rod’s fault that the Rangers wasted the other $75 million they plowed into various Chan Ho Parks.

The ‘learned’ view is Opinion C. Most baseball fans who have thought reasonably about this question defend this stance, and it seems to make sense. When premier free agents now sign for under $15 million annually, it seems impossible that A-Rod could be a better value than two top-tier free agents.

The notion that C isn’t impossible–Opinion D–is what we’re going to explore today. It’s relevant because the seven years and $180 million (plus $6 million deferred from 2011-2020) left on A-Rod’s contract may be about to change hands, with the Red Sox feverishly trying to trade for him. The contention is this: If I gave you $25 million a year to play with, you’d be better off taking A-Rod than jumping into the free-agent pool to get the market-corrected studs there.

Let’s look at a list of Value Over Replacement Player (VORP) leaders for the past three years.

       2001                      2002                    2003
Player          VORP    Player          VORP    Player          VORP
Barry Bonds     154.0   Barry Bonds     146.6   Barry Bonds     114.6
Sammy Sosa      116.0   Alex Rodriguez  90.9    Albert Pujols   97.3
Jason Giambi    105.0   Jim Thome       86.9    Alex Rodriguez  86.3
Luis Gonzalez   100.5   Randy Johnson   86.9    Gary Sheffield  78.9
Alex Rodriguez  97.3    Jason Giambi    84.0    Javy Lopez      75.9
Chipper Jones   92.4    Jeff Kent       83.8    Bret Boone      75.8
Rich Aurilia    90.4    Brian Giles     81.6    Esteban Loaiza  74.7
Bret Boone      86.7    Derek Lowe      79.0    Carlos Delgado  72.2
Randy Johnson   86.0    Manny Ramirez   74.3    Pedro Martinez  71.9
Roberto Alomar  80.3    Bernie Williams 71.6    Tim Hudson      69.5

Every year, there are a few guys out there who approach (and once in a while exceed) A-Rod’s production. But here’s the thing–it’s not the same guys every year. Aside from Barry Bonds, A-Rod is the only player to appear on all three lists. Not only doesn’t he fall out of the top 10, he doesn’t even fall out of the top five.

The last three years, A-Rod has made $18, $19 and $20 million. Given that money, could you find better production each year? Sure, but that’s not how baseball works. You can’t pick and choose your players every year. You don’t get to have Jason Giambi for 2001, then switch to A-Rod for ’02 and ’03. You can’t just grab Gary Sheffield‘s 2003 season without having had him for the previous years. And you can’t have Barry Bonds at all, because the Giants aren’t letting him go.

In the same vein, there are always breakout players like Esteban Loaiza who are enormous bargains. But it’s not fair to bring them into the argument, either; you can’t retroactively have Loaiza for 2003 once you find out he was a Cy Young candidate.

This debate is about cost certainty. In the past A-Rod has been the best bet in baseball for getting your money’s worth. That matters for the question we’re asking, which is whether or not he still is, and will be until 2010.

We can use the PECOTA forecasting system to have some fun with this question. PECOTA uses a complex set of comparisons to predict a five-year forecast for a player, which is exactly what we’re trying to do.

If you traded in A-Rod, what could you get in this new market? Let’s look at some possibilities. We’ll include free agents from this year and last and three other prominent players who have come up in trade rumors lately, and look at their average expected Wins Above Replacement Player (WARP) from now until 2007, or until the contract ends, whichever comes first. (For Garciaparra I have used the five-year WARP.)

(We list A-Rod’s salary at $25 million annually, even though, for the first couple of years remaining on the deal, it’s a bit less.)

Name            Avg. Salary    Contract Ends   Avg. WARP, 04-07
A-Rod           $25 million     2010               7.4
Garciaparra     $11.5           2004               5.1
Ramirez         $20             2008               4.4
K. Brown        $15             2005               1.1
Alfonzo         $6.5            2006               3.1
Durham          $6.775          2006               2.6
Floyd           $6.5            2006               3.4
Glavine         $11.667         2005               1.1
Thome           $14.166         2008               4.1
Millwood        $10?            2007?              2.5
Pettitte        $12?            2007?              1.9
Colon           $12?            2007?              2.8
Foulke          $7              2007?              1.6
I. Rodriguez    $10?            2006?              3.2
Cameron         $8?             2007?              2.2
Tejada          $10?            2007?              4.1
Sheffield       $14             2006               2.7
Guerrero        $15?            2008?              5.2

That’s impressive. Almost any combination you can make for $25 million won’t get you as many wins as A-Rod alone. You’re probably scratching your head: How can that be? Ivan Rodriguez, Keith Foulke, and Bartolo Colon combined just barely beat A-Rod? Is that really true?

Well, it isn’t, not exactly. PECOTA uses a couple of neat metrics that are particularly relevant to any debate on cost certainty: Attrition and Drop Rates.

  • Attrition Rate is the percent chance that a player’s plate appearances will decrease by half from his average of the past three seasons.
  • Drop Rate is the percent chance that a player will have no plate appearances at all.

PECOTA looks at these metrics and adjusts a player’s long-term forecast accordingly. Let’s isolate them, so you can easily see what we’re talking about (A=Attrition, D=Drop):

Player        04A     04D     05A     05D     06A     06D     07A     07D
A-Rod         0.0     0.0     8.4     0.7     9.1     2.9     9.1     3.8
Garciaparra   5.0     0.0     8.3     3.3     18.5    12.0    27.5    11.5
Ramirez       0.3     0.0     6.3     6.2     11.6    5.6     38.7    13.5
K. Brown      60.3    33.1    66.2    58.9                            
Alfonzo       11.1    2.7     20.5    5.9     31.4    14.1    44.1    25.1
Durham        9.1     3.5     28.0    12.0    33.4    19.8    49.4    25.3
Floyd         9.3     2.7     22.1    11.5    27.4    15.2    40.8    17.9
Glavine       35.0    15.4    43.2    36.8                            
Thome         9.7     0.9     21.7    7.3     24.5    11.2    43.0    26.4
Millwood      12.3    5.2     21.4    9.4     25.8    14.9    33.3    19.4
Pettitte      34.4    8.5     38.5    13.3    46.1    25.2    59.7    37.9
Colon         17.9    5.5     23.7    12.1    30.0    18.5    37.4    21.7
Foulke        13.8    1.8     28.2    7.9     44.0    18.7    53.9    33.4
I. Rodriguez  15.0    3.8     17.9    6.3     29.3    9.6     34.3    21.1
Cameron       6.3     3.3     25.9    10.0    42.3    23.9    53.3    29.1
Tejada        1.4     1.4     3.6     1.4     8.2     2.1     24.6    4.1
Sheffield     14.8    5.9     32.3    16.0    51.7    31.8            
Guerrero      1.5     0.0     2.5     0.0     6.6     2.3     9.0     1.0

PECOTA doesn’t really think that A-Rod can single-handedly compete with Pudge, Foulke and Colon put together if they’re all at full strength. But they might not be–in fact, it’s unlikely that all three will–and aside from Miguel Tejada and Guerrero, nobody is anywhere near as sure a bet as A-Rod. (Guerrero’s rates are even better than A-Rod’s…hey, maybe his agent is onto something.) And Guerrero is still worth over two wins less per year. A-Rod’s combination of production and cost certainty is jaw-dropping.

We’ve all known that Alex Rodriguez is an incredible player. But maybe we haven’t realized how much: He’s so good that even after a drastic market correction, the $252 million man still isn’t overpaid.

So let Texas deal him for Manny and cash. They’ll probably spend it on someone who won’t make up the difference.