With Dunn playing the hero this afternoon (yay), I've seen people talking again about whether the Reds should give him a contract extension.
The answer, as always, is that "it depends": How much and how many years would it take to extend him?
A nice starting point would be to figure out what a reasonable contract extension for Dunn would look like. I worked that out for someone over e-mail, so I thought I'd post this here as well. I'm using a methodology that is based largely on what folks do over at The Book Blog, though I figure replacement level a tad differently then they do. Their way may well be better, but we usually converge on the same answer, +-0.5 WAR or so.
Here we go:
Projecting Dunn into this and future seasons...
Offense: his 3-year weighted average on offense has been almost exactly 5 wins above replacement (not including 2008 stats).
Defense: last year, I had him as a -1.9 WAR fielder (including throwing arm), which I'll just assume is an accurate representation of his fielding "skill."
So, taking those numbers, and subtracting another 0.5 wins for aging, projects him as a 2.6 WAR player this season (his defense kills his value!). So, looking over the coming years, here's my projected value for him (assuming 10% inflation above this past offseason's $4.4/WAR):
2008: 2.6 WAR, $11.4 million (he actually is making $13 million)
2009: 2.1 WAR, $10.2 million
2010: 1.6 WAR, $8.5 million
2011: 1.1 WAR, $6.4 million
2012: 0.6 WAR, $3.9 million
So, in terms of extensions, I think we can reasonably value Dunn's contract extensions starting in the 2009 season as:
I have no way of knowing if he'd take any of those contracts...but my guess is no, because they'd all represent a substantial salary cut compared to what he's making this year. And they're well below the contracts that somewhat comparable players like Carlos Lee signed.
It's also worth noting that becoming a DH doesn't help Dunn. DH's get a -1.5 WAR position adjustment (in lieu of a fielding rating), which recognizes that they're usually terrible fielders. Dunn's fielding rating is -1.9 WAR, including position adjustment...but moving from the NL to the AL probably negates any of that 0.4 "bonus" he'd get by moving to DH. So these contract numbers are probably pretty reasonable.
If he won't take any of those contracts, then the Reds should either trade him or let him walk, depending on whether they can get trade value that is better than the expected value of the two draft picks I'm pretty sure he'd command. I have no way of knowing what GM's would offer for him, but that'd be the criterion I'd use.
Hopefully they'll be able to pick up some other players for more appropriate money in free agency to make up for the lost production. Maybe that'd give Encarnacion a chance to move into the outfield...
Quick breakdown on Griffey, using the same methodology...
Offense: Using a 2-year weighted average (common practice for guys in their late 30's), I have Griffey as 2.8 WAR hitter in 06-07.
Defense: Last year, I had him as a -1.7 WAR fielder, including position adjustment and throwing arm.
So, summing the two, and then subtracting 0.5 wins for aging puts Griffey's projection at 0.6 WAR this season...and effectively zero in 2009. Yikes.
DH doesn't help Griffey either... DH's get a -1.5 WAR position adjustment (in lieu of any fielding rating), while Griffey's working from a -1.7 fielding rating (including position adjustment). The 0.2 WAR bonus is easily negated by moving to the tougher American League.