Miguel Cabrera will receive an eight year, $ 248 million contract extension, according to Jon Paul Morosi of Fox Sports. When added to the two years on his current contract for $ 22 million per season, that's a grand total of $ 292 million over ten years, which is more money than any player has received under one contract in the history of the game.
When you add the $ 152.3 million extension that Cabrera signed with the Tigers in 2008 to the $ 248 million extension he has just signed, that's a total of just over $ 400 million over 16 seasons.
Alex Rodriguez has held the previous record, in fact the two highest contracts, with his current ten year, $ 275 million contract which runs through 2017, and his previous $ 252 million deal which was signed with the Texas Rangers and was renegotiated when he opted out with the Yankees. Note also that Rodriguez will not receive most of his salary for 2014 because of his suspension for using performance enhancing drugs.
Cabrera's extension averages $ 31 million per season for eight seasons. That would eclipse the average annual value of the extension given by the Dodgers to Clayton Kershaw, which comes to an average of $ 30,714,286 per season. Averaging in the two remaining years on Cabrera's current contract would bring the average down to $ 29 million.
Any way you add it up, Cabrera's total contract is the richest in major league history, and will make him a Tiger until age 40.
What impact will this have on the Tigers' payroll? Unless any details still unreported give Cabrera a raise this year, no impact in 2014. Payroll still comes in at just over $ 162 million, among the top five in the game.
What impact will Cabrera's contract have on the luxury tax? Taken by itself, probably no impact. The threshold for the luxury tax kicks in at $ 189 million, total for salaries, bonuses, and benefits. Player benefits are just under $ 11 million, so the salaries and bonuses would have to reach about $ 178 million before any tax is triggered.
What impact would this have on efforts to sign Max Scherzer? We don't know this for sure, but I'd say none. I don't believe that the Tigers not being able to extend Scherzer had an impact on extending Cabrera, nor does Cabrera signing prevent them from extending Scherzer either before, during, or after this season. Scherzer has a price point where he would sign, but it's just not somewhere that the Tigers are willing to go. Again, I don't know this, but that's my guesstimate.
Where does this leave the Tigers' payroll after the 2014 season? The Tigers have five players due to become free agents after this season. Scherzer, Torii Hunter, Victor Martinez, Phil Coke, and Joba Chamberlain. They will earn a total of $ 46 million this season. That money will come off the books barring any extensions, but those players will also have to be replaced.This past off season, the Tigers lost eight players to free agency.
In addition six Tigers will be eligible for arbitration again. They are Austin Jackson, Rick Porcello, Drew Smyly, Al Alburquerque, Andy Dirks, and Don Kelly. They won't collectively earn nearly as much as the dollars coming off the payroll, so it's just a matter of reallocating the dollars spent on the pending free agents.
There have been some comments, mostly in the national media, to the effect that the length of Cabrera's contract is excessive. We don't know that yet. We don't know how he will age, but I'd bet on pretty darn well. We also don't know what revenues will look like ten years from now. If current trends are any indication, there will be plenty of money to go around.