His "bad years" were 1.6 and 1.8 WAR though since he became a regular. Your WAR calculations are wrong. If the cost per WAR is $8 million today then it will be $10 million by the end of the deal. That means to break even on the deal you would need about 16 WAR total. Or 10 more over 6 years after one more big season.
This is not a great deal for the Orioles but it is also not a bad deal. The Howard comparisons are not that valid because Howard was paid an average of $25 million which would really be $30 million plus now. So this deal is at a 30% discount to the Howard deal. It also does not come with health questions as Howard was signed almost two seasons before they had to.
Davis is also a better athlete than Howard so has a chance to age better over the course of the deal.
As I said though, it is not a great deal for Baltimore. But they do have the money to have a couple players under contract that are in this price range. Their TV deal is also not bad in that they are making money off the Nationals market and appear to be winning the various lawsuits with them. This is probably the most efficient way for this team to add scarce WAR for the next 3 years at the cost of needing to find WAR from less expensive sources in the back end of the deal. But that is the cost of doing business. The deferred money helps them fit in under current payroll and the big surprise is why more teams do not undertake this strategy when they have a team on the cusp of contention. It is the right kind of risk for a mid-market team.
Scarcity of WAR is an important concept for teams that want to win in the next couple of years.
