Apparently, it is official. Greene signed a 2 year, $11 million deal with the Padres, avoiding his final two years of arbitration. The article says that Greene could also make more through performance bonuses. It also says that the Padres wanted to negotiate a longer deal with Greene, but the shortstop was not willing to take it past two years.

Anyway, I’ve already attempted to calculate Greene’s value right here. I’ve got him at about 3 wins above replacement, which includes offense, fielding, and a positional adjustment. It’s merely a rough approximation, but it should be relatively close to his actual value, depending on what fieldig metric you use and how you regress to the mean. (of course, more detailed projections could do a better job)

Now that we have his value down, we have to estimate what type of contract he should get. We can’t look at what he “should” get a s a free agent, because he isn’t one. Arbitration eligible players obviously don’t make their full free agent value. For that, we’ll use Tango’s numbers for estimating a pre-free agent deal. Greene’s in his final two years of arbitration, so he should make about 60% of his free agent value this year and about 80% next year.

We can now jump to Tango’s salary scale and try to estimate what a “fair” deal would be. 3 WAR = 13.2 million (it assumes 4.4m per marginal win). We have to take 60% of that, so we get 7.92 for this year. Now, let’s call Greene a 2.5 WAR player in 09, because his fielding takes a rather big hit (or whatever). We also have to account for inflation, so now we’re at $4.84 million per marginal win. Based on these assumptions, he should make $12.1m in 2009 as a free agent — 80% of $12.1m is 9.68. Add up year one and year two and we get ~$17.6 million.

Based on this quick analysis, the Padres are underpaying Greene by about 6 or 7 million. Even if we call Greene a 2.5 WAR player this year and a 2 WAR player in 09, I still get an estimated contract of $14.3 million. Anyway, there could certainly be a problem with something along the way (my estimate of his value, the arbitration percentages, etc.), but it appears the Padres are making out pretty well here. Greene and his agent may not be fully accounting for a number of factors, namely Petco, Greene’s fielding, or his position. Or maybe Greene is just not worried about getting every dollar that he’s worth. I don’t know. Also, remember that he could get some performance bonuses, so that could account for some of the discrepancy.

Anyway, I’m glad that they signed the deal, as it appears to be for well below market value. That being said, I don’t think this guarantees that he’ll be here for the next two years. The Padres could still turn around and deal him. It also certainly doesn’t mean he’ll be here past 2009, as he was apparently unwilling to sign a long term deal at this point. Either way, it appears the Padres have made a solid financial move and now they have a couple of years to think about Greene and his future.