And there are details. To simplify things, I'm going to include his signing bonus in his salary for the first year and his $600,000 2010 buyout in his second year (since the Bucs have to pay it whether or not the third year actually happens). With that in mind, the contract is like this:
2008 $4.3 million
2009 $6.7 million
2010 $7.4 million option
There's also $500,000 in performance bonuses. The option automatically vests if Sanchez has 635 plate appearances in 2009 or 600 plate appearances and an All-Star appearance that year. Otherwise, it's a team option.
Either way, basically, the first year is pretty cheap, and the second year is a little expensive, relative to what Freddy would've gotten in arbitration. I'm glad that the option can only automatically vest if Sanchez is healthy in 2009. There are a number of things that could go wrong with Sanchez, but health is probably the likeliest one. This contract protects the Pirates against the risk that he injures himself trying to make a double play or something. If Sanchez is healthy the whole season in 2009, he's probably worth $7.4 million in 2010. If not, the Pirates can get out from under the contract. This is a pretty good deal, I think.