Late Thursday night, Phillies starter Roy Oswalt quietly joined the ranks of (likely) free agents. The right-hander is no longer considering retirement after this season, but the Phillies probably won't exercise their end of his $16MM mutual option for 2012, according to Todd Zolecki of MLB.com, although they might be interested in bringing back Oswalt on a more affordable deal. To decline the option, the Phillies will have to pay Oswalt a $2MM buyout.
Oswalt, who turned 34 in August, joined the Phillies last season after ten years in Houston, where he was the staff ace. With the Phils, he's the fourth starter in an historically deep rotation, behind Roy Halladay, Cliff Lee and Cole Hamels. No shame in being the fourth-chair violin in that orchestra.
Though he's 34 and has struggled with a back injury in 2011, Oswalt has been mostly sturdy throughout his career, making fewer than 30 starts only twice (2003 and '11) in ten full seasons. Along with that dependability, Oswalt has posted strong numbers: 3.22 ERA (3.35 FIP), 7.35 K/9, 2.09 BB/9 and a 47% groundball rate. Those figures earned him a five-year, $73MM extension with the Astros in 2006.
Since Oswalt makes $16MM this season, and the Phils won't be exercising their end of his $16MM mutual option, they obviously won't offer him arbitration. That will make him more attractive to suitors on the free-agent market, as any team that signs him won't have to forfeit compensatory draft picks (as MLBTR's latest Elias Rankings show, Oswalt projects as a Type A free agent).
As of now, it's tough to say what kind of contract Oswalt will be seeking this offseason, because we don't know how long he'll want to pitch. He has flirted with retirement before, so he might prefer to work on a year-to-year basis, not unlike the Dodgers' Hiroki Kuroda. In that case, there would be a lot of suitors for Oswalt's services, and he could probably sign with a contender for a salary in the neighborhood of Kuroda's $12MM. If Oswalt is happy with the Phils and wants to return to the stacked rotation for a year, he'd likely have to take a salary below market value — maybe $8MM or so — as the Phils are already on the hook for that $2MM buyout, not to mention their other financial commitments and likely pursuits of re-signing Jimmy Rollins and Ryan Madson, and extending Hamels.
If Oswalt wants a multiyear deal, there are two recent cases that make for interesting comparisons. Earlier this month, the Cardinals extended Chris Carpenter for two years and $21MM. I think Oswalt would have plenty of bidders at that price. Here's another: Two years ago, the Braves extended Tim Hudson, then only 16 months removed from Tommy John surgery, for three years and $28MM. Oswalt's eventual deal might compare favorably to either of those, since he will be negotiating with many teams rather than one, but they should provide a rough basis.