Extension Candidate: David Price

Last year 25-year-old lefty David Price established himself as one of the best pitchers in baseball, finishing second in the American League Cy Young voting.  The Rays have shown a willingness to guarantee money to a young player seeking long-term security, but Price's situation is not similar to that of James ShieldsEvan Longoria, Wade Davis, or Ben Zobrist.  Let's take a look.

Price represents one of the game's rare commodities, an ace starting pitcher.  He's better than Shields or Davis.  Stardom was expected for Price when the Rays drafted him first overall in 2007.  Stardom was expected for Longoria as well, but the Rays managed to lock up their third baseman a few weeks into his big league career.  I wouldn't be surprised if the Rays tried that with Price too.

At this stage Price is only one season away from arbitration eligibility, and anything resembling his 2010 campaign will result in a big 2012 salary.  Regarding an extension, Price told Marc Topkin of the St. Petersburg Times, "If it's realistic, absolutely, that is something I would definitely do," going on to praise his team. 

As Topkin notes, Tim Lincecum and Cole Hamels are a couple of good comparables.  All three are Super Two players, meaning they are arbitration eligible four times.  Here's how they stack up heading into arbitration, adding in Price's ZiPS projection for 2011.

  • Lincecum: 40 wins, 2.90 ERA, 598 2/3 innings, 676 strikeouts (10.2 K/9), two Cy Young awards, two All-Star appearances, no postseason experience
  • Hamels: 38 wins, 3.43 ERA, 543 innings, 518 strikeouts (8.6 K/9), a sixth-place Cy Young finish, one All-Star appearance, 2.18 ERA and four wins in six postseason starts, NLCS and World Series MVP awards
  • Price: 45 wins, 3.37 ERA, 552 2/3 innings, 482 strikeouts (7.8 K/9), a second place Cy Young finish, one All-Star appearance, 3.93 ERA and one win in 18 1/3 postseason innings

If Price does what ZiPS predicts for 2011 - a 3.48 ERA in 201 2/3 innings – he could make another All-Star team and get Cy Young votes again.  And of course he could add to his postseason numbers.

Even without the postseason experience at the time, Lincecum is the best of the group.  Had he settled at the midpoint with the Giants instead of signing a two-year deal, he would have been paid $10.5MM in his first arbitration year, which would have been a record for any player.  Hamels didn't get to the point of exchanging figures, but his three-year deal paid a discounted salary of $4.35MM in the first year.  Though not Super Twos, Felix Hernandez and Justin Verlander are other good points of reference, with first-year arbitration salaries of $3.8MM and $3.675MM respectively.

Though he's a closer, Jonathan Papelbon's first-year arbitration award of $6.25MM – the current record for a pitcher - is something Price's agent Bo McKinnis could attempt to surpass.  That'd essentially be half of the money guaranteed to Wade Davis, so you can see how the two Rays pitchers are not in the same boat.  Price has the advantage of operating from what is technically regarded as a $2MM salary for 2011, factoring in his signing bonus.  He could potentially earn $40MM+ for his four arbitration years, if he's willing to forgo long-term security.

Unlike the Giants and Phillies, the Rays may be unwilling to do a multiyear deal with Price that does not buy out all arbitration years and some free agent seasons.  They could use Felix and Verlander's contracts as models, adjusting for the fact that Price is a Super Two.  A fair price might be $35MM for the four arbitration years and $20MM a year for three free agent seasons, coming to a total of $95MM over seven years.  Such a contract would be unprecedented, however, and not in the way that the Rays have embraced previously.  Plus it's difficult to picture a $20MM pitcher on the Rays, even if their payroll is higher by 2016. 

Would Price allow for a club option or three?  Would he accept $30MM for his four arbitration years, allowing the Rays savings in the near future and letting them worry about the big free agent salaries later?  Such concessions might be necessary to find common ground.  Or, perhaps the best route would be a Lincecum or Hamels-style extension, where Price takes security for two or three years while maintaining flexibility for his last one or two arbitration years, and the Rays save several million bucks but don't claim any free agent seasons.

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