Reactions among fans and MLBTR readers to the initial report of Homer Bailey nearing a six-year deal in the $100MM range seemed at best uncertain and negative at worst. The Reds and Bailey have since reportedly finalized a six-year, $105MM contract that includes a $25MM mutual option (or $5MM buyout) for a seventh season, and little seems to have changed.
The most common criticism I've noticed to this point is that Bailey's career numbers don't make him feel like a $100MM pitcher. However, Bailey's career, as a whole, has little to do with the dotted line on which his signature will find itself in the coming days. The Reds aren't paying Bailey to be the pitcher he was as a 21-year-old or even as a 24-year-old. Cincinnati is paying Bailey for his recent work and what they feel he can do from 2014 through 2019. Bailey's career 4.25 ERA shouldn't be a factor when we evaluate this deal from the outside, because it almost certainly wasn't a major factor when the Reds were deciding whether or not he was worth this price.
In making the deal, Cincinnati appears to be banking on Bailey continuing the improvement he's shown over each of the past two seasons. Dating back to 2011, Bailey has seen year-to-year improvement in his command, ground-ball rate, swinging-strike rate, velocity and out-of-zone pitches chased by hitters. The changes haven't necessarily manifested in his ERAs — though his 3.68 and 3.49 totals from the past two years are solid — but teams have already begun to demonstrate that they're willing to pay for things other than ERA. Given the volatile nature of that stat, it's no surprise to see clubs betting on trends, skill-set and age rather than the ultimate outcome.
For some context, Bailey's 10.7 percent swinging-strike rate in 2013 tied for 11th in the Majors among qualified starters. In fact, he trailed White Sox ace Chris Sale by just 0.01 percent in that field and induced grounders at nearly the same rate — 46.1 percent for Bailey and 46.6 percent for Sale. His 34.9 percent opponents' chase rate was tied for 10th in all of baseball with Hiroki Kuroda and Bailey's own teammate, Mat Latos. Bailey's average fastball velocity jumped from 92.2 mph in 2011 to 92.5 in 2012 and 94.1 in 2013. That 94.1 mph average was the seventh-highest in the Majors among qualified starters, and his velocity actually increased as the season wore on. The Reds probably aren't concerned with his ability to sustain that heat, as he averaged 94.4 mph over 113 innings in 2009 (Fangraphs' Jeff Sullivan took an extended look at Bailey's velocity spike earlier in the week).
Bailey hasn't been on the disabled list since 2011 and has topped 200 innings in each of the past two seasons as well. On top of displaying promising peripherals, he's demonstrated some durability. While that can change at a moment's notice, 200-plus innings will get a pitcher paid, and the Reds likely feel that Bailey's medicals give him a strong chance of staying healthy moving forward. Also of significance is Bailey's age; at 27 years old (28 in May), the Reds are buying more prime years than a team would typically receive in paying open-market prices for a pitcher. Starting pitchers that reach free agency are usually closer to 30 or 31 than Bailey would have been (heading into his age-29 season).
Looking at other pitchers who were extended with five to six years of service time (with some help from the MLBTR Extension Tracker), Bailey's deal is the third-largest in history for a pitcher one year (or less) from free agency. He rightfully fell well short of the extensions signed by Clayton Kershaw and Cole Hamels, but he was able to top Jered Weaver's five-year, $85MM deal. That contract was thought to be team friendly at the time, however, and Weaver's deal is also two years old at this point.
As MLBTR's Charlie Wilmoth noted Sunday evening, the deal essentially amounts to five new years and $95MM, as Bailey was in line for a salary in the $10MM range anyhow. Put another way, he's signing away five free agent years for $15MM more than Anibal Sanchez received a year ago (also for his age 29 to 33 seasons). With one more strong season under his belt and further TV revenue flooding the game, Bailey would likely have topped Sanchez's mark, even in a relatively strong class of free agent pitchers that figures to include James Shields, Justin Masterson, Max Scherzer and possibly Jon Lester (though Lester seems highly likely to sign an extension of his own, and Scherzer could do the same).
Age again becomes a factor here, as Bailey is four years younger than Shields, two years younger than Scherzer and Lester, and one year younger than Masterson. Even if Shields were perceived as the better of the two pitchers next winter, would a team be more comfortable guaranteeing him top dollar starting in his age-33 season, or would Bailey's age-29 season be more alluring?
Reds GM Walt Jocketty and his staff are continuing to place a premium on age (we've already seen this, to varying degrees, in the offseason with Freddie Freeman's extension and the free-agent deals signed by Phil Hughes and Masahiro Tanaka). While Bailey did have a three-WAR season in 2013, it's unlikely that the Reds feel he's reached his ceiling at this point. A nine-figure guarantee for a pitcher with just two seasons of 200 innings and a career 4.25 ERA seems excessive to many, but again, the Reds aren't paying Bailey for his accomplishments (or lack thereof) in his age-21 to age-24 seasons; the Reds are paying Bailey to be the pitcher they believe he can be based on improvements in non-ERA elements of his game over the past few years.
As for Bailey, he and his agents at Excel Sports Management were likely confident in his ability to post strong totals in his walk season, but there's also the reality that pitchers simply get hurt with relative frequency. Even a two- or three-week DL stint related to his elbow or shoulder would have cast some doubt on his free agency, and missing a significant chunk would have been disastrous.
While many will be quick to call this an overpay, it looks to me as if the Reds paid market value (or close to it at five years, $95MM) for Bailey's 2012-13 skill set, with the belief that he can take another step forward and be the type of pitcher who could have signed for something closer to $120MM+ over six years next offseason. Those outcomes illustrate the risk for both sides: for the Reds, paying market value a year early, and for Bailey, potentially missing out on tens of millions of dollars. Of course, if he regresses or gets injured, the deal will quickly look poor for the Reds, but that's the case with any long-term deal. And given Bailey's age, there's no reason to suspect significant regression in 2014.