Archives for November 2010

Not all good young starting pitchers are locked up through their arbitration years – Carlos Zambrano, A.J. Burnett, Dontrelle Willis, Erik Bedard, Oliver Perez, and Joe Blanton either made it to their last arbitration year or all the way to free agency on the year-by-year path.  Wandy Rodriguez, Ricky Nolasco, Francisco Liriano, Chad Billingsley, Matt Garza, Jered Weaver, and John Danks are among the current crop of standout young hurlers who have not signed multiyear deals.  Yesterday Ben Nicholson-Smith analyzed the reasons why young pitchers are signed to contract extensions; today we're tackling the reasons why not.

Heath Risk And Performance Variance

Throwing a baseball 90 miles per hour repeatedly is not a natural thing, and pitchers' elbows and shoulders suffer the consequences.  As Blue Jays GM Alex Anthopoulos said when he signed Ricky Romero to an extension, "I think the risks are pretty obvious with health. You’re always concerned with respect to health."  One National League executive elaborated: "Every pitcher is one pitch away from being hurt.  The risk associated with pitchers, compared to position players, is much higher.  That risk is not only injury but also performance.  Many studies show that – except for elite pitchers – performance varies much more than it does for hitters."

Sometimes it's difficult to separate health and performance variance.  Twins lefty Francisco Liriano had Tommy John surgery in November of 2006, and pitched pretty well when he returned in 2008.  His ERA ballooned to 5.80 in '09, however.  In 2010, more than three years removed from the surgery, he finally returned to Cy Young form.  A cautious approach can pay off.  Had the Mariners locked up Erik Bedard long-term before the '08 season, they'd probably owe him $12MM for 2011 and similar salaries for future seasons.

Pitchers Trying To Maximize Earnings

Carlos Zambrano, who did not sign an extension, earned $22.66MM for his three arbitration years spanning 2005-07.  Brandon Webb, on the other hand, signed an extension and banked only $12.5MM for his arbitration years - about 55% of what Zambrano made.  Also, Zambrano parlayed the leverage of approaching free agency at age 26 into a five-year, $91.5MM deal.  From the player's point of view, going year to year can net significantly more money if you're willing to forgo multiyear security.

Matt Sosnick, agent to Josh Johnson, Ricky Nolasco, and Dontrelle Willis, is intimately familiar with the motivations for turning down multiyear offers. "Depends what the player’s personality is like and what the agent’s ego is like.  There are guys who will turn down that money, even if it’s a good deal for the player, just to be able to say they turned it down. I mean there certainly is at least one agent who is like that."  Sosnick was presumably referring to super agent Scott Boras.  "Boras is averse to extensions for everybody because he loves the marketplace," explained our NL exec.  Makes you wonder what the precedents Jered Weaver might set going year-to-year.  Of course the buck ultimately stops with the pitcher, who employs the agent.

Some players choose not to sign multiyear deals because of the ripple effect of below-market contracts signed by their peers.  Within a period of a few months in early 2008, James Shields, Adam Wainwright, and Fausto Carmona signed extremely team-friendly deals involving multiple club options.  It's understandable Erik Bedard wasn't in a rush to sign a similar contract coming off his best season.

Young pitcher extensions can be an issue of timing; our NL exec uses Cliff Lee's transformation to prove the point.  "If Cleveland had approached Lee when he was struggling in 2007 with a 10-year extension he would have jumped at the offer.  However, right now, as the top pitcher on the free agent market, Lee was right to wait and explore what he could get as a free agent."  Lee actually did sign a deal covering his arbitration years.  Because of a club option the Indians included in August of '06, Lee played for $9MM this year, less than half his market value.  Things will work out for Lee in the end, but he would have been arbitration eligible after the '08 season and a free agent after '09.

Big Market Teams Pay Extra For Flexibility

Certain teams just don't need to fret about the cost savings and certainty long-term pitcher extensions can buy.  The Yankees went year to year with Chien-Ming Wang, who won 38 games from 2006-07.  They later had the flexibility to non-tender the injured Wang after the '09 season.  Andy MacPhail, Orioles President of Baseball Operations, outlined the clout possessed by big market teams: "The Yankees have a philosophy of not negotiating with anybody until their free agent year.  Well, they can afford to do that because essentially they can always be the highest bidder if that’s what they choose.  When I was in Chicago, we generally waited until about the fourth or fifth year because A) we had money, B) we were a very attractive place for players, so we didn’t have to worry."

Late-Blooming Starters

For every Felix Hernandez or Clayton Kershaw, there's a Wandy Rodriguez or Jeremy Guthrie, pitchers who figure it out later in their careers.  Rodriguez was 29 when he posted his first sub-4.00 ERA season.  There was no reason to extend him before that; he wasn't established as an above-average pitcher.  Following a fantastic '09 season, Rodriguez and his agent Barry Praver aggressively attempted to jump from $2.6MM to $7MM in the pitcher's second arbitration year.  Wandy, who had a career ERA of 4.33 at the time, lost a hearing with the Astros and was awarded $5MM.  Now the pitcher is pushing for a multiyear deal.

What's Next?

Extensions for young pitchers remain popular, with young stars Felix Hernandez, Justin Verlander, and Josh Johnson signing this year.  On the other hand, deals given to Nick Blackburn and Scott Feldman might prompt teams to think twice about less-than-elite arms.  The real test may be yet to come, if Liriano, Weaver, Billingsley, Garza, and Danks raise the arbitration bar and reach free agency in their late 20s.