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Max Scherzer Rumors
Nationals pitcher Max Scherzer bet on himself when he rejected the Tigers $144MM extension offer last spring, reports Ken Rosenthal of FOX Sports. The ace discussed the Tigers’ offer, the resultant insurance policy he took out, and his current contract with Rosenthal. Below are the specifics from that article, although it also contains a number of great quotes from Scherzer not included here.
Of interest, Scherzer’s insurance policy would have paid $40MM if an injury forced him to take an offer below the $144MM offered by Detroit. The policy cost $750K and covered every type of injury including elbow and shoulder ailments. Said Scherzer, “once you took the injury-risk factor out of it, and you can just go play baseball and not have to worry about anything . . . I was set.”
Ultimately, Scherzer did not need to call upon the policy. He inked a seven-year, $210MM deal with the Nationals in January. Half of the total is deferred until 2022-2028 and will be paid in $15MM yearly installments. The players’ union values the contract at $191.4MM due to the deferrals.
The structure of the deal is actually beneficial to both Scherzer and the Nationals. The signing bonus and deferrals won’t be subject to state income taxes. Washington D.C. doesn’t have an income tax for non-residents. Scherzer has set up residency in Florida, which also does not have an income tax. The deferrals will be paid to him there.
As you might expect, Scherzer wasn’t hoodwinked when taking the deferred money. Nor was another club pushed out of the bidding by the Nationals. “I know finance. I know deferral money. I get all that. But this was the best offer. If another team wanted to make a better offer without a deferment, we never received it. This was the best offer.”
In my view, Scherzer’s use of insurance could have implications for other players. Earlier today, we learned about the confidence Andrew McCutchen received from his team friendly contract extension. It’s intuitive, a player who doesn’t have to worry about his financial future can focus on playing his best. Insurance could offer an alternative to an early career contract extension for some athletes – especially those who want to test free agency at the earliest opportunity.
We recently look a look at the Boston outfield situation, noting that the logjam still seemed in need of clearance. Nick Cafardo of the Boston Globe writes in response to a fan that the Red Sox need to trade Allen Craig, Shane Victorino, or both. A healthy Victorino, he continues, would likely either be a regular in the outfield or be traded. Cafardo adds that he does not expect a bench role to suit the veteran, although Boston would likely have to eat some of Victorino’s $13MM salary to trade him.
Here are some more notes out of Boston, all via WEEI.com’s Rob Bradford:
- The Red Sox had “numerous discussions” with Scott Boras about Max Scherzer over the offseason, Bradford reports. Boston valued Scherzer on the level of Jon Lester, and eventually came to realize that it was not going to get him at a price the team was willing to pay. Boras never gave any indication that a cut rate might be had for Scherzer, a source tells Bradford, and it seems clear in retrospect that he had good reason for that stance.
- Boston did end up with another talented righty at a much lower cost in Justin Masterson. As Bradford writes, the former Indian bet on himself last year and lost. But he says he has no regrets about failing to reach an extension with Cleveland and settling for a one-year, make-good deal with the Sox. Of course, at a $9.5MM salary, Masterson is receiving quite a nice guarantee while he tries to work through his troubles.
- Another right-handed starter entering a potential contract year for the Red Sox is Clay Buchholz, who Bradford spoke with recently. Suddenly the veteran of the staff, Buchholz’s guaranteed money runs out after this season. The club controls him for two more years through successive options ($13MM and $13.5MM, respectively), but it is far from certain that they will be picked up. Either way, Buchholz is certainly pitching for his next contract, and tells Bradford that he hopes a normal offseason will contribute to a strong 2015.
- Bradford was also among the reporters to speak with Koji Uehara yesterday as Uehara detailed his thought process when it came to re-signing in Boston. “No doubt at all,” said Uehara. “It was the only team I talked to so I was pretty sure if I was going to sign it was going to be with the Red Sox. Since the Red Sox had offers of multiple years that really erased any doubts going into the offseason as a free agent. … Because of my age, it was very important.”
Prince Fielder is one of several players whose hoped-for return to past production levels will go a long way toward determining the near-term fate of the Rangers. Evan Grant of the Dallas Morning News provides an interesting profile of Fielder, who says he is recharged, newly appreciative, and raring to go for 2015.
Here are a few more notes from around the league:
- The Orioles are headed toward an arbitration hearing with outfielder Alejandro De Aza, Roch Kubatko of MASNsports.com reports. Executive VP Dan Duquette explains that the club informed De Aza it had made him its best offer and would take a “file to go” strategy from that point forward. He expressed surprise that the team’s $5MM proposal was not accepted, noting that there had been discussions of a two-year deal as well. De Aza filed at $5.65MM, which actually falls shy of the $5.9MM that MLBTR and Matt Swartz projected. Baltimore’s arbitration strategy was actually the first topic covered by Kubatko in his recent appearance on the MLBTR Podcast.
- MLB Commissioner Rob Manfred said today that the league’s investigation into possible tampering by the Cubs into then-Rays manager Joe Maddon is still in progress, as ESPNChicago.com’s Jesse Rogers reports. Cubs president of baseball operations Theo Epstein and Maddon’s agent, Alen Nero, have both insisted that nothing untoward occurred, but it appears that MLB will take its time and cover the matter thoroughly before coming to any conclusions.
- Max Scherzer‘s departure from the Tigers appears to have been all but a formality from the point that he rejected the club’s $140MM offer last spring, as the righty explained to MLB.com’s Jason Beck. Scherzer said that he wasn’t interested in holding contract talks during the season, and that the club was not interested in negotiating when Scherzer’s camp “reached out” over the offseason. Indeed, Scherzer said that both he and Rick Porcello realized some time ago that the club was likely going to undergo a lot of turnover in the coming years, which has indeed been the case.
- As for his choice of the Nationals, Scherzer gave some further details on how the end game went down: “Of the teams that were really down to the end, the Nationals gave me the best opportunity [to win]. So because of that, that’s the recent why I told Scott [Boras] at the end, ‘Let’s just negotiate with the Nationals.'”
Here’s the latest from Detroit, where TigerFest takes place today:
- David Price reiterated that he would “absolutely” consider a long-term deal with the Tigers, MLive.com’s James Schmehl tweets. Price said earlier this week that he would be “all ears” regarding a possible extension. He will make $19.75MM in his last season of arbitration eligibility in 2015, then can test the free agent market next winter.
- GM Dave Dombrowski says the Tigers were not one of the final bidders for new Nationals signee Max Scherzer, MLB.com’s Jason Beck tweets. “If there was a mystery club involved, and I’m not sure there was, it was not us,” Dombrowski says.
- Dombrowski says the Tigers tried to re-sign utilityman Don Kelly, Beck tweets. Kelly signed a minor-league deal with the Marlins instead, however, because he felt he had a better chance of making the big-league team there. Again via Beck, Dombrowski says that with Kelly gone, infielders Hernan Perez and Andrew Romine will compete for the super-utility job. They’ll work on playing the outfield this spring.
7:56pm: Scherzer’s $50MM signing bonus is broken down by Fangraphs’ Kiley McDaniel, who reports that Scherzer will receive $5MM of the bonus in 2015 as paid out in twice-monthly in-season installments. A similar structure will result in Scherzer getting the rest of his bonus, with the righty being paid $15MM in 2019, $15MM in 2020 and $15MM in 2021.
5:25pm: Scherzer will earn $10MM in 2015 and $15MM in each of 2016, 2017 and 2018, ESPN’s Jayson Stark reports in a breakdown of the contract. The deferred payments begin after the 2018 season, as while Scherzer is scheduled to earn $35MM in each of the 2019, 2020 and 2021 seasons, all of that money will be paid to him through 2028.
JAN. 22, 12:33pm: Scherzer’s contract does not have a no-trade clause, reports Jon Heyman of CBS Sports (Twitter links). The Nationals feel that the deferrals and 14-year payment structure of the contract serve as de facto no-trade protection, and as Heyman points out, Scherzer will receive 10-and-5 rights after the 2019 season.
Additionally, Scherzer’s deal calls for a $500K bonus for each Cy Young Award he wins. He’ll receive $250K for finishing second, $150K for finishing third, $100K for finishing fourth and $75K for finishing fifth.
JAN. 21: The Nationals have officially agreed to sign the market’s top starting pitcher to join a rotation that already ranked among the league’s best. Ace right-hander Max Scherzer will come to D.C. for a seven-year term that will run through his age-36 season.
Scherzer will earn $210MM for seven years of work, but will receive that payout over twice that duration. The contract’s unusual structure has a significant impact on its value. Scherzer will receive $15MM per season for the next 14 years, meaning the Nationals will be paying Scherzer through 2028. Scherzer’s deferral is, obviously, the largest one in MLB contract history, leaving Bobby Bonilla and the Mets’ lengthy $29.8MM deferral in the dust.
That delayed payment drags down the deal’s true worth when discounted to present value. While it appears that the league will value the deal at $185MM for purposes of luxury tax calculations, the actual savings to the Nationals are likely much more significant, as Dave Cameron of Fangraphs explains. (In Cameron’s estimation, Scherzer may have achieved only $10MM more in present value than Jon Lester received from the Cubs.)
The deal’s structure does, however, also protect Scherzer by including a $50MM signing bonus that will be paid in even installments over the 14-year term. In concert with Washington, DC’s lack of non-resident income tax and Scherzer’s planned move to Florida, he figures to reap tens of millions of dollars in tax savings. Needless to say, it is all but impossible to arrive at a precise valuation of the contract, both to team and player.
The Nats’ emergence as a top bidder for Scherzer came as somewhat of a surprise, given the terrific starting pitching they already had (including Stephen Strasburg, Jordan Zimmermann, Gio Gonzalez and Doug Fister, with the signing bumping Tanner Roark, who himself had a very good 2014 season, out of the rotation). But signing Scherzer should help the Nationals continue to contend in a weak NL East division beyond next winter, when Zimmermann, Fister, Ian Desmond and Denard Span all can become eligible for free agency.
The Scherzer deal also gives the Nationals the option to trade someone like Zimmermann or Fister within the next few months, potentially getting good value for one of their free-agents-to-be while maintaining a formidable rotation. A trade involving Strasburg, who is eligible for free agency following the 2016 season, could also be a possibility. (One also wonders whether Roark, with his lengthy and affordable control rights, might also be had.) The Washington Post’s Barry Svrluga tweets, though, that the Nationals won’t necessarily have to trade anyone to make room for Scherzer.
Though MLBTR’s Tim Dierkes rated Scherzer the top available free agent this winter, actual news about Scherzer had been slow in coming before this weekend. He and another top starting pitcher, James Shields, lingered on the market long after everyone else in the top ten had signed. Boras and Scherzer had reportedly been seeking a $200MM contract after rejecting a $144MM extension offer from the Tigers last spring.
Seven years is, of course, a very long time in a pitcher’s career. Via MLBTR’s Transaction Tracker, only four pitchers in recent history have received seven-year deals. Two of those were relatively recent extensions for Clayton Kershaw and Felix Hernandez. C.C. Sabathia‘s seven-year deal worked out well for the first few seasons, but Sabathia has struggled with injury and diminished velocity in the last two years. A fourth seven-year deal, the Giants’ pact with Barry Zito, was a bust, although Zito, unlike Scherzer, showed signs of decline even before signing his contract. Depending upon how one values the deal (see above), Scherzer’s contract would exceed Hernandez’s $175MM contract and would also top Justin Verlander‘s 2013 extension with the Tigers, which tacked five years and $140MM onto Verlander’s existing deal to total seven years and $180MM.
Nationals GM Mike Rizzo drafted Scherzer in the first round in 2006 while Rizzo was vice president of scouting for the Diamondbacks. Scherzer quickly emerged as a solid starting pitcher, making the Majors less than two years after being drafted and one year after signing. After two seasons in Arizona, he headed to Detroit and developed into an ace, posting three good seasons in his mid-20s before winning his first Cy Young award in 2013. He had a strong repeat season in 2014, throwing 220 1/3 innings with a 3.15 ERA, 10.3 K/9 and 2.6 BB/9.
Even without Scherzer, the Nationals already appeared to be easily the best team in the NL East — they won the division by 17 games last year, and the only other team in the division that has decisively improved its roster for 2015 is the Marlins. The Nationals’ acquisition of Scherzer strengthens their already-strong status as NL East favorites.
Scherzer’s departure leaves the win-now Tigers without their top starting pitcher, although they still have David Price, Anibal Sanchez, Verlander, and the newly acquired Alfredo Simon and Shane Greene. Price and Simon are eligible for free agency next winter.
Scherzer rejected the Tigers’ qualifying offer earlier this offseason, so the Nationals will sacrifice their first-round pick of this year’s draft, No. 27 overall, as a result of the signing. The Tigers will acquire the No. 35 pick.
CBS Sports’ Jon Heyman tweeted that the deal was agreed to after being first to report that the Nationals and another team were in talks for Scherzer. The Washington Post’s Adam Kilgore later tweeted that the sides were close to a deal. Tyler Kepner of the New York Times (via Twitter), Ken Rosenthal of FOX Sports (in a tweet), Yahoo! Sports’ Jeff Passan (likewise), and Heyman reported details of the contract deferral.
Photo courtesy of USA Today Sports Images.
Max Scherzer‘s seven-year, $210MM contract with the Nationals is still the talk of baseball, and Chase Hughes of CSNWashington.com was among the reporters to speak with GM Mike Rizzo, the Lerner family (who own the Nats) and agent Scott Boras at today’s introductory press conference. The massive deferrals in the contract — half of Scherzer’s guarantee is deferred from 2022-28 — were essential to its completion. “If that didn’t happen, there wouldn’t have been a deal,” said Mark Lerner. “It was really my father and (Rizzo) coming up with a creative deal and luckily it worked out for everybody.” Rizzo explained that a straight seven-year deal would not have fit into the team’s budgetary parameters. Boras, meanwhile, said that he had to have multiple discussions with the Lerner family, as the front office and manager Matt Willians approved of the move from a baseball standpoint. Said Boras: “It was really a matter of working out their interests, understanding the complexity, what’s going to be best for the team — long term, short term — their revenue dynamic.”
Here’s a bit more on Scherzer and his new team…
- ESPN’s Jayson Stark takes a look at the history of seven-year contracts for free agent pitchers and points out that the odds aren’t in the Nationals’ favor on this contract. Kevin Brown‘s seven-year deal with the Dodgers is probably the best signed by a free agent hurler, he writes, with CC Sabathia‘s current seven-year deal ranking second. Brown’s deal ended poorly, and Sabathia’s looks to be on a similar trajectory. Stark spoke with a number of executives about the wisdom (or lack thereof) of seven-year deals for pitchers, with several execs opining that Jon Lester (who signed a six-year deal) is a better bet to hold up in the long term than Scherzer. One GM plainly stated: “Look, these contracts are dumb to begin with. Really, only a three- or four-year deal makes sense. Seven or eight is what the players want. So they should come down to five or six, as opposed to seven. But here’s the thing: It’s all market-based, so you do it.”
- Boras spoke to reporters, including Tom Schad of the Washington Times, following today’s press conference and quickly debunked the rumor that another of his clients, Stephen Strasburg, is ready to move on from the Nationals. “We don’t know where that came from,” Boras explained. “Stephen Strasburg wants to play here and wants to be with Max Scherzer and grow.” Boras added that at the time of Scherzer’s signing, Rizzo informed him that the team’s intention was to keep the current roster intact. Owner Mark Lerner said the same to Schad.
- Boras expanded on those thoughts a bit on MLB Network Radio’s Inside Pitch with Jim Bowden and Casey Stern (audio link): “The Nationals have told us that they intend to keep their pitching staff. They intend to try to win a World Series, to try to move forward, and Stephen Strasburg is certainly a part of that…” Boras also explained why he doesn’t foresee the unique structure of Scherzer’s deal as the beginning of a trend, but rather as a unique situation.
- For those interested, the 15-minute press conference to introduce Scherzer to the D.C. media is available on MLB.com (video link). Scherzer discusses what drew him to the Nationals, being reunited with former teammate Doug Fister and his own reaction to the jaw-dropping $210MM guarantee he will receive. Rizzo talks about scouting Scherzer as an amateur and the Nationals’ offseason plan as a whole, while manager Matt Williams recalls a story from his days as Scherzer’s manager with the D-Backs’ Double-A affiliate.
- Scherzer’s contract represents another win for Scott Boras, Joel Sherman of the New York Post writes. The market for Scherzer seemed, on the outside, to be rather quiet, with few clear candidates to provide the money Boras was seeking, but he managed to get a huge sum anyway. Boras’ close relationship with the Nationals and their 89-year-old owner, Ted Lerner, likely helped.
- Sherman also adds that he hears the Nationals intend to keep Jordan Zimmermann, who’s eligible for free agency after the season.
- Scherzer, clearly one of the game’s best pitchers, is worth $210MM, Dan Szymborski writes for ESPN Insider. Szymborski also writes that the Nationals’ rotation projects to rank among the best of any team so far this century, behind only the 2013 Tigers, the 2002 Diamondbacks, the 2011 Phillies, the 2001 Yankees and the 2004 Red Sox.
- Scherzer is a great pitcher, but he’s less of an immediate upgrade than one might think, because the Nationals’ rotation was already so good last season, Rob Neyer of FOX Sports writes. The Nationals were already a 96-win team with exceptional starting pitching, and it’s hard to do much better than that, although adding Scherzer now does improve the Nats’ chances of winning the NL East in years beyond 2015. If the Nationals are to get better in the short term, the best way for them to do it might be to add another second baseman.
- Now that the Nationals have Scherzer in the fold, they have a variety of options available, Anthony Castrovince of Sports On Earth writes. One obvious possibility would be to trade Zimmermann or Doug Fister, with the recent trade of Jeff Samardzija to the White Sox helping define the market for a strong starting pitcher with one year of control remaining.
- The Nats shouldn’t trade anyone from their loaded rotation, Jeff Passan of Yahoo! Sports writes. Pitchers get hurt frequently, and the Nationals don’t need to deal a pitcher to fix a hole elsewhere — they’re strong all over the diamond and they have a good farm system.
- Scott Boras has said he often negotiates huge deals with owners, not GMs, and it’s unclear whether Nationals owner Ted Lerner was involved in negotiating the Scherzer deal or how GM Mike Rizzo might now plan if he did, FOX Sports’ Ken Rosenthal writes. The Nationals have discussed trades involving Jordan Zimmermann, Ian Desmond and Stephen Strasburg throughout the offseason, Rosenthal notes. Now that they’ve added Scherzer, though, they could just keep accumulating talent, perhaps adding another Boras client in Francisco Rodriguez or Rafael Soriano for their bullpen.
- The Nationals might now be a “super-team,” Jeff Sullivan of Fangraphs writes. The Nationals’ position players already projected for more WAR than any other NL team, and Scherzer’s signing will move them past the Dodgers for the most projected pitcher WAR as well.
- The Red Sox can still use an ace and would be able to pay the high price necessary to acquire Zimmermann, Strasburg or Doug Fister, Brian MacPherson of the Providence Journal writes. It would perhaps be more likely that the Red Sox would acquire Zimmermann or Fister, given that Strasburg has two years of control left and would therefore cost more in a trade.
9:08pm: The deal is “close” but will not be completed tonight, Barry Svrluga of the Washington Post tweets.
6:54pm: Scherzer is “very close” to signing with the Nationals, although the deal is not yet done, a source tells Adam Kilgore of the Washington Post (via Twitter).
6:10pm: Max Scherzer is talking with the Nationals and one other team about a seven-year contract, reports Jon Heyman of CBSSports.com. FOX Sports’ Ken Rosenthal, on Twitter, categorizes the negotiations as “close.” Chris Cotillo of SB Nation tweeted earlier the impression around baseball is the Nationals will sign Scherzer, but it was unclear whether a deal was imminent. Tigers President/CEO/GM Dave Dombrowski denies Detroit is the other team, telling Anthony Fenech of the Detroit Free Press their pursuit of Scherzer is still inactive (Twitter). The New York Post’s Joel Sherman tweets the Yankees are not the other team and Rosenthal reports the Red Sox, Astros, and Dodgers are also not in on Scherzer (Twitter links). The Angels aren’t the mystery team, either, MLB.com’s Alden Gonzalez tweets, and neither are the Giants or Cardinals, according to ESPN’s Jerry Crasnick (Twitter links).
Agent Scott Boras has said it would be an ownership-level decision on whether a team will sign Scherzer and that it could be a “two-step process” – ink Scherzer and then trade another member of their rotation. Barry Svlurga of the Washington Post sees Boras pitching Nationals owner Ted Lerner the notion of signing Scherzer to win the World Series in 2015 knowing the salaries of impending free agents Ian Desmond, Jordan Zimmermann, Doug Fister, and Denard Span will be coming off the books for 2016 (Twitter links).
The Nationals have engaged multiple teams over the past few weeks in trade talks for Zimmermann, tweets FOX Sports’ Jon Paul Morosi. If Scherzer signs, Zimmermann is the most likely trade candidate; but, if an acceptable offer for Zimmermann does not materialize, sources tell Morosi the Nationals will look to move Stephen Strasburg (Twitter links).
Washington, amidst reports the club has not had significant extension talks with Desmond, has discussed its All-Star shortstop with other teams, most notably the failed three-way trade involving the Mets and Rays. The Nationals also have not re-engaged Fister in extension talks since last spring and are said to be willing to listen to any trade proposals for the right-hander.
The Nationals now might be the favorites to sign Max Scherzer, and that’s a bit surprising, given the quality of their existing rotation and the fact that they don’t seem likely to push their payroll to Dodgers/Yankees levels, Barry Svrluga of the Washington Post writes. By backloading the deal, though, the Nationals could keep their 2015 payroll reasonable, then be able to pay Scherzer higher salaries in later years, when several highly paid current players (Ian Desmond, Doug Fister and Denard Span among them) could be gone. The Nationals could also trade Jordan Zimmermann after acquiring Scherzer, netting them prospect talent and essentially replacing one top starter with another. Here are more notes on pitchers.
- The Rangers are rumored to be close to acquiring Yovani Gallardo from the Brewers, and such a deal would make sense from Texas’ perspective, Gerry Fraley of the Dallas Morning News writes. Gallardo would give the Rangers a needed veteran innings-eater without requiring a long-term commitment.
- Johan Santana already has at least one offer after pitching two innings in the Venezuelan Winter League Tuesday, but it isn’t from the Twins, Darren Wolfson of 1500ESPN tweets. The 35-year-old Santana is attempting a comeback after having missed the 2013 and 2014 seasons due to shoulder and Achilles injuries.