Deciding on Player Contracts

Anonymous asks about how much of a contract to give to B.J. Upton.

If I suspect he will earn 30, 30, 30 over the next 3 years respectively, then keeping him for all 3 years costs me 5 marginal dollars for each year, for a total of 15 marginal dollars. The benefit is that I own a 21 dollar in 2 years, who earns 30 dollars, for a 9 dollar profit. But, haven't I spent 15 marginal dollars to secure that 9 dollar 2011 profit.

If I extend him into next year, that costs me 5 marginal dollars this year, and 5 marginal dollars next year. In return I get a 30 dollar Upton next year paid at 16 dollars, turning a 14 dollar profit. Subtracting the 10 marginal dollars over two years, thats a net gain of four dollars.

If I dont extend him at all, I get a 30 dollar Upton this year at the cost of 11 dollars. No marginal extension dollars -> so that's a 19 dollar profit.

Therefore, is the optimal play to not extend him?

I wrote about contracts in the context of value earlier this winter.

Anonymous is correct that you're going to get the most value out of your freeze list with an $11 B.J. Upton in his option year. However, you're only going to get one year of Upton and then will have to pay full ticket price when he goes back into the free agent pool.

More importantly, you should at least give Upton an L2 so that teams playing for 2010 will dangle something for Upton when you make him available.

The article I wrote in March talked a good deal about theory and math, but the calculation is often as simple as "how much will I get for B.J. Upton in a trade if I give him a contract?"