Examining The Madison Bumgarner Extension

It’s not surprising that Madison Bumgarner's part of the Giants’ long-term vision. The 22-year-old is establishing himself as one of the best left-handers in the National League as he begins his second full season. But the specifics of the five-year, $35MM extension he signed yesterday were somewhat surprising. Here’s a breakdown of the deal:

What Distinguishes Bumgarner From His Peers

Bumgarner signed a record deal for pitchers with one-plus years of MLB service time. Most pitchers in Bumgarner’s service class have signed four-year deals in the $10-12MM range, but Bumgarner’s deal corresponds to the five-year, $30MM template for starters with two-plus years of service. 

How’d he pull that off? I am guessing his representatives at SFX argued that he has enough bulk and quality to separate himself from most of his own service class and place him alongside more experienced pitchers.  

Many players in Bumgarner’s own service class don’t compare. He had 150-200 more innings than pitchers such as Cory Luebke, Wade Davis or Brett Anderson had when they signed as one-plus players (for an interesting counter-example, check out James Shieldsstats through 2007). SFX presumably said ‘Bumgarner needs to earn as much as the pitchers in the next service class because he is as accomplished as them.’

Why Bumgarner Could Ask For $30MM+

Pitchers such as Jon Niese, Derek Holland, Clay Buchholz and Trevor Cahill signed for $25-30.5MM as two-plus players. They have only a slight advantage over Bumgarner in career wins, starts and innings despite their one-year advantage in service time. Bumgarner has more innings than Ricky Romero or Yovani Gallardo did at the time of their deals, and at least as many starts. (Innings matter a whole lot when we’re discussing pitchers’ arbitration years.)

There's also quality. Bumgarner’s ERA is substantially below the marks of Niese and Holland and well below the marks of Romero, Gallardo, Cahill and Buchholz and Jon Lester. He also has a better career walk rate than anyone in this group and better career strikeout rate than anyone but Gallardo. Not only has he pitched his share of innings, they’ve been good ones. Cy Young votes and postseason experience help, too.

Still, I wouldn't have expected Bumgarner to sign for more than $30MM. He ultimately obtained more than most pitchers in the service class ahead of him.

Why The Deal Works For The Giants

The Giants likely looked ahead to Bumgarner's arb years and thought 'this guy's going to get expensive in a hurry.' They know better than any team that elite pitchers can earn lots by going year to year through the arbitration process.

Bumgarner had been on track for a first year arbitration salary of $4MM or more. It would only get more expensive from there, so the Giants obtained some potential for savings in arb here. The deal also insures against the possibility that Bumgarner breaks out into an ace.

Arbitration savings are nice, but they’re a risky way to try to save given the guaranteed commitment required. Most importantly, the Giants extended Bumgarner’s time in San Francisco by at least one year, and possibly three. The Giants now control more of his prime years.

Why The Deal Works For Bumgarner

Let’s start with the $35MM guarantee. Not only does Bumgarner obtain a ton of money, he establishes a new record for pitchers in his service class.

It’s also worth noting that this deal won't necessarily represent the only big payday of his career. At the latest, he'll hit free agency following his age-29 season. Left-handed starters C.C. Sabathia and Cliff Lee have shown teams are willing to pay for elite starters well after they turn 30.


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12 Comments on "Examining The Madison Bumgarner Extension"


3 years 3 months ago

Well written article Ben Nicholson-Smith !

Ev Ehrlich
3 years 3 months ago

Ben, you missed the point.  MB is a likely super-two under the new BA, so he’s not “a service class behind” 2+ players.

Jason_F
3 years 3 months ago

You’re wrong about him being a super two. Right now, he is not projected to be a super two and would only become one if several guys in his service time class get sent down and stop accruing major league service time. This is highly unlikely, in this case.

evehr
3 years 3 months ago

So your betting that Adam Moore, Mitch talbot, Julio Borbon, and Adam Russell will get a full year’s service time?

BLB25
3 years 3 months ago

If he does become a super-two, and that seems fairly unlikely right now, he’ll get 5 mil more.  

levendis
3 years 3 months ago

at 20 years old he pitched a 8 inning shutout against the Rangers in the WS to give the giants a 3-1 lead. This kid is absolutely phenomenal. Great sign by the giants, i realize this sets a precedent for other contracts, but this kid was well worth it. Be interesting to see with what they do with Linceculm, I trade him if im them, get as many good young prospects you can get. I still believe he will flouirsh for the next few years, even with the bad velocity, but cant see the Giants paying 40+ mill to two pitchers.

BLB25
3 years 3 months ago

Yea, while this isn’t the time to trade Lincecum, I think its something they’ll definitely have to consider pretty soon.  I don’t see Lincecum offering the Giants much of a “hometown” discount and it looks like there will be several big market teams with money to spend in the 2013/2014 offseason.  If they could get a young major league ready arm as a replacement in the rotation and a near major league ready hitter at middle infield or corner outfield it would probably benefit them.  Seems like Seattle, Texas, Boston and Kansas City might be fits.  

levendis
3 years 3 months ago

 I’ve heard things about him wanting 25+ mill a year, thats something I cant see the giants doing, and would advise him not too. Of course you dont trade him at the start of the season, because you always have a chance to win a WS with that rotation, but if things look bleek you have to unload him.

Paul Shailor
3 years 3 months ago

I am 2 years older than him. Wow.

Amish_willy
3 years 3 months ago

Great contract for the Giants. One point that I think Sabean did really well in was getting the third free agent year. Guys like Lester, Gallardo, Romero only gave up potentially 2 free agent years in their extensions. Considering the outcome I consider in the slight increase in guaranteed dollars was well worth it, and that’s ignoring a spending increase since those deals were signed.

As a Padre fan who has critized the way Sabean does things for numerous years, this might be his best move in my book. Imagine Coletti doing the same with Kershaw prior to last season… the cost in waiting can often be a painful experience. Good for them!

Christopher Wilson
3 years 3 months ago

Id still take Romero over him anyday. Now that Ricky seems to have figured out the BoSox and he’s always pitched well against the Yankees, I expect that Romero will have the best year of all the pitchers mentioned in this article.

levendis
3 years 3 months ago

Not a chance. Though i usually tend to give pitchers “extra credit” for pitching in the AL, especially the AL east, Romero hasnt pitched in one big game in his career, though he is great, thats one big advantage Bumgarner has over him; knowing he can pitch and thrive in the biggest stage is baseball speaks volumes about him.