You might have noticed that Nolan Arenado’s value estimate on our site has changed a little recently. That’s normal, due to the variables of performance and time. But there’s another reason it changed: we investigated the details in his contract, and made a correction. This is important, because it affects his overall surplus value – and the amount of money a team that traded for him would owe him.

On the surface, Arenado is owed the following – and this is what you’ll see on most websites:

• 2023: $35M
• 2024: $35M
• 2025: $32M
• 2026: $27M
• 2027: $15M
• Total: $144M

Since we’re past 60% of the 2023 season, he’s owed roughly $13M of that $35M, which reduces his total owed to about $122M.

In a recent update, we estimated his remaining field value at $109.5M, which means his contract was underwater, at -$12.5M.

But wait.

In looking at Arenado’s contract details, courtesy of Cot’s Contracts (which we highly recommend), a few fine points are worth noting, starting with this one:

• Colorado agreed to pay up to $51M, including:
• *guaranteed payments: $14,429,500 in 2021 (toward 2021 salary), $16M in 2023 (toward deferral of 2022 salary)
• *conditional payments (if Arenado does not exercise right to opt out): $5,570,500 in 2022 and $5M each in 2024-26

 

Remember when the Rockies traded him to the Cardinals and kicked in $51M? We do. We had that one right. That means they spread that $51M around a bit, and the last bullet above indicates that, once Arenado opted in to his contract this past offseason, they’re paying down $5M per year of his salary from 2024-26 – so the Cardinals (or any team that trades for him) don’t have to. That means, from that team’s perspective, it’s more like this:

• 2023: $35M
• 2024: $30M
• 2025: $27M
• 2026: $22M
• 2027: $15M
• Total: $129M

Prorated for 2023, it’s down to $107M. That’s more reasonable. But there’s more. Per Cot’s again:

• Arenado agreed to defer $6M annually in 2022-26 salaries, paid with no interest in 10 installments of $3M each July 1, 2032-41

What that means is, he’s not getting the full amount of these salaries; he’s getting $6M less per year, and won’t get that back until roughly 10 years down the road. Because of inflation, we need to discount that to today. Using a conservative 3% per year, that means the value of that money in today's dollars is more like $4.6M per year instead of $6M. And that means we need to shave off an additional $1.4M per year for 2023-26. So now it’s like this:

• 2023: $33.6M
• 2024: $28.6M
• 2025: $25.6M
• 2026: $20.6M
• 2027: $15M
• Total: $123.4M

Prorated for 2023, that brings the total down to $102M. And that means that with his $109.5M field value, we get a positive surplus of $7.5M.

There’s a bit of confusion out there in the public sphere, because journalists tend to report the surface-level numbers; they tend to look at it from Arenado’s perspective, which includes the amount the Rockies are paying, and most people don’t want to do the net present value math.

But any team trading for him will.