Kansas City Royals Get Bargain From Alex Gordon

The Kansas City Royals got a screaming bargain with Alex Gordon‘s four-year, $72 million contract that he agreed to on Wednesday. 

Fangraphs.com’s crowd estimate for Gordon came in at four-years, $90 million. Many pundits believed Alex Gordon could command over $100 million, but that was before the slow market for position players developed this winter. Very few believed that Gordon could be had for less than $80 million.

I suspect that Alex Gordon did,indeed, give the KC Royals a hometown discount to stay with the team he rooted for as a child. However, we can’t know for sure unless we get reports from other interested parties about their offers.

Yet, Fangraphs.com’s Craig Edwards considered Alex Gordon a bargain at five-years, and $100 million. His method included finding a group of corner outfield comps with similar production to Gordon over their age 27 to 31 seasons and averaging their production over the next five years. The group produced an average of 15.4 Wins Above Replacement (WAR) over their age 32 through age 36 seasons. Applying an $8 million per WAR market value and a five percent inflation factor, Edwards estimated Alex Gordon to deliver $136.5 million in value over the next five years.

Cutting a year off the deal just leaves less risk for the KC Royals.

Heck, reducing the per WAR market value of position player free-agents to $7 million—or even $6 million—still gives the Kansas City Royals excess value. Presuming Gordon to deliver 12.5 WAR over four years, gives contract values of:

Alex Gordon Value at $7 million/WAR

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Even if we presume the $/WAR for position players at an extremely low $6 million, Gordon’s contract figures to provide a good deal for the KC Royals:

Alex Gordon Value at $6 million/WAR

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I also made a pessimistic presumption to generate these tables. I assumed a fairly steep decline which reduces the overall value because the $/WAR increases with time.

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Alex Gordon seems to have left at least $8 million on the table, and as much as $20 million, to stay in Kansas City.

Unless Gordon suffers a career-ending injury, or his production falls off a cliff, the Kansas City Royals should come out well-ahead on this deal. Really, the KC Royals couldn’t expect to find a better bargain on a major free-agent. Bringing back Alex Gordon at that price had to be a no-brainer for the front office.

The above analysis just considers Gordon’s contributions on the field. However, Alex Gordon also brings some “soft value” when it comes to clubhouse leadership, and as an example of a player who overcame early struggles in his career to become a bona-fide star.

Next: Royals Have New Face Of The Franchise In Alex Gordon

As such, Alex Gordon will make a great mentor for the next wave of Kansas City Royals position player prospects that includes Raul Mondesi, Bubba Starling, and Brett Eibner.