The average annual value of the deal without the option is $12.5 million, which is a record for anyone who isn't Mariano Rivera. The total value of the contract is a record high for a reliever, and will pay Papelbon through his age 34 or 35 season.
For the Phillies, I understand that they want to keep their championship window open as long as possible. With Roy Halladay, Chase Utley, Ryan Howard and Cliff Lee under contract and probably past their peak, the time to win another title may already be fading. While Papelbon may help them win in 2012 or 2013, the deal could add to the Phillies getting old in a hurry.
Ryan Howard is just beginning a five year, $125 million deal that will take him through his age 36 season. My feelings about the Howard extension are already on file, but short version is that given his age, size, the history associated with left handed sluggers, and the fact that he's already going to miss 2012, this contract looks like a disaster before it even officially begins.
Chase Utley is under contract for an additional two years ($12.5 million per), which will take him through his age 34 season. Utley has a serious knee injury that delayed the start of the 2012 season for him and one that will most likely bother him for the rest of his career. He hasn't topped 110 games in the last two years and put up career lows in batting average, slugging percentage, isolated power, and on base percentage.
Halladay is under contract for another two years ($20 million per) through his age 36 season.
Cliff Lee is under contract until 2015, with a $27.5 million option for 2016 that will most likely be picked up if he's at all effective, given the enormous $12.5 million buyout. At that point, Lee will be 37 years old. Both pitchers have continued to be effective and may live up to their ace status, but betting on pitchers in their mid to late thirties is a good way to go broke.
All told, that is $364 million committed to five players in their 30's over the next five years.
From the Red Sox perspective, the length of the contract is probably what sunk the deal. The $12.5 million salary isn't massive, given Papelbon earned $12 million last year. But to commit four or five years to a reliever is scary, ask the now fired JP Ricciardi about how his five year commitment to BJ Ryan worked out. It will be interesting to see how the Red Sox reallocate the money. They still need starters (more on that later), bullpen help, and maybe a right fielder or a DH, although I think they'll stand pat and resign Papi and stick with Reddick.