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Extension Candidate: Max Scherzer

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The Tigers and Max Scherzer agreed to a 2012 salary of $3.75MM yesterday, but the negotiations won’t necessarily end there, since extension season is just beginning. Last year, for example, 24 players signed extensions between the date arbitration numbers were exchanged and the end of April. Just one of those players was a client of the Boras Corporation — Scherzer's agency — but the possibility of an extension exists for the 27-year-old right-hander nevertheless.

Max Scherzer - Tigers

Gio Gonzalez and Justin Masterson are two of the first-time arbitration eligible pitchers who most closely resemble Scherzer. Gonzalez (38-32, 3.93 ERA in 535 1/3 innings) Masterson (28-38, 3.92 ERA in 613 2/3 innings) and Scherzer (36-35, 3.92 ERA in 617 innings) all have similar numbers from a career standpoint. However, Scherzer's platform season ERA of 4.43 exceeded the 2011 marks Gonzalez and Masterson posted by more than a run. Gonzalez recently signed a five-year, $42MM extension and Masterson is another candidate for a long-term deal.

Gonzalez and Masterson aren’t the only pitchers who resemble Scherzer. The Tigers right-hander has numbers that resemble the ones John Danks, Chad Billingsley, Matt Garza and Johnny Cueto had when they became arbitration eligible for the first time. The various contracts those pitchers signed offer insight into Scherzer’s future earning power.

A four-year deal worth slightly more than $30MM could work for both sides, I believe. Recent deals for the pitchers above suggest a deal between Scherzer and the Tigers might look like this: $3.5MM in 2012, $6MM in 2013, $8MM in 2014, $12MM in 2014 and a modest buyout for one or two additional club option seasons. A guaranteed four-year total in the $30MM range would eclipse Cueto’s $27MM deal and while it wouldn’t reach Gonzalez’s $42MM mark, that may not be realistic for a pitcher with Scherzer’s 2011 ERA. 

The Tigers would extend their control of Scherzer and cap his earnings by buying out his arbitration seasons and at least one year of free agency. Tigers starters Justin Verlander, Rick Porcello, Doug Fister and Jacob Turner are all under team control through 2014 or later and extending Scherzer would keep the group in place for even longer. While there are risks associated with every pitcher extension, the 2006 first rounder has made 30-plus starts in both of the past two seasons. Meanwhile, Scherzer would obtain multiyear security and extend his stay with the 2011 AL Central champs.  

Advanced metrics such as xFIP (3.70), FIP (4.14) and SIERA (3.63) suggest Scherzer's 2011 ERA of 4.43 was higher than expected for someone with his peripheral stats. If the statistically-minded hurler is willing to gamble on similar health and improved luck in 2012, his extension prospects might look considerably better a year from now. But if Scherzer is willing to sign before the season and the Tigers are looking to lock him up, a four-year deal in the $30MM range seems fair.

Photo courtesy Icon SMI.

Extension Candidate: Daniel Hudson

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The Diamondbacks' Daniel Hudson has a sweet resume for a starting pitcher with one year and 117 days of Major League service time.  He's already racked up 336 career innings (222 last year) and also has 25 wins and a 3.19 ERA.  What are his extension prospects?

Hudson

As I showed in my Madison Bumgarner post, pitchers with less than two years of service time don't get big bucks on extensions.  Hudson and Bumgarner currently have much better bodies of work than James Shields, Ubaldo Jimenez, Brett Anderson, and Wade Davis did, but they probably couldn't push the guaranteed money much past $15MM by signing now.  Instead, Hudson and Bumgarner may attempt to set a new standard for pitchers with between two and three years of service, one year from now.

The two-to-three record holder is Gio Gonzalez, who flew past the standard $30MM extension by getting a $42MM guarantee from the Nationals.  However, Gonzalez is not a good comparison for Hudson, as the former was a Super Two.  Hudson won't be.  The Proformance client will go to arbitration three times, beginning with the 2014 season.  

The typical 2+ pitcher extension is a four-year, $30MM deal, signed by Jon Lester, Clay Buchholz, Yovani Gallardo, Trevor Cahill, and Ricky Romero.  These deals included one or two club options.  Hudson will match this group in service time after the 2012 season, but he already matches them in overall statistics.  Hudson already has more innings and wins than Gallardo did and more strikeouts than Lester or Cahill.  If Hudson reaches his 2012 Bill James projections, he'll have at least a 185 inning, 11 win, 141 strikeout, and significant ERA advantage over any of those 2+ peers.  Hudson and Bumgarner will likely be in a class by themselves, and if they sign extensions a year from now they ought to be able to raise the bar to $40MM over five years for non-Super Two 2+ pitchers.     

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Extension Candidate: Mike Stanton

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Icon_6715668With offense on the decline around the league, power is at a premium these days. Few players have more of it than Mike Stanton, the Marlins' 22-year-old wunderkind. Since making his Major League debut on June 8th of 2010, his 56 homers are the sixth most in baseball behind Jose Bautista (79), Albert Pujols (65), Mark Teixeira (64), Curtis Granderson (62), and Prince Fielder (61). That's elite company, especially for someone so young.

The Marlins went on a spending spree this offseason, importing Ozzie Guillen, Jose Reyes, Carlos Zambrano, Heath Bell, and Mark Buehrle, but perhaps their wisest signing could be locking Stanton into a long-term deal. There's certainly no rush since he won't be arbitration-eligible until after 2013 or a free agent until after 2016, but power pays in arbitration and Stanton could get expensive in a hurry. Look no further than Fielder, who turned his impressive power output into $33.5MM during his three arbitration years. It would have been more if he hadn't given up his first two arbitration years as part of a two-year, $18MM contract.

A number of young outfielders have signed long-term contracts in recent years and can serve as reference points for a Stanton extension. Justin Upton signed away his three arbitration years for $20.75MM, Carlos Gonzalez for $23.5MM, and Jay Bruce for $22.5MM. Upton, CarGo, and Bruce also gave up their first two years of free agency for an average of $13.3MM per season. Those same five years of Stanton's career figure to cost the Fish upwards of $50MM.

For what it's worth, the Marlins signed Hanley Ramirez to a six-year contract prior to the 2009 season, which would have been his first as an arbitration-eligible player. They secured his three arbitration years for $23.5MM and then three additional free agent years for an average of $15.5MM annually. Ramirez did have a Rookie of the Year award and two top-11 finishes in the NL MVP voting at that point, so Stanton would figure to come slightly cheaper, assuming they act now.

A new era of Marlins' baseball begins next season with a new name, a new stadium, and several new high-profile players. Getting Stanton — one of their core homegrown players and a .261/.344/.525 career hitter — under contract long-term would be an excellent finish to a productive and franchise-altering offseason.

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Extension Candidate: Michael Morse

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Michael Morse's emergence for the Nationals began in 2010, when he hit 15 home runs in a half-season.  Given the chance to play every day in 2011, Morse's production more than held up.  The first baseman/left fielder hit .303/.360/.550 with 31 home runs in 575 plate appearances, snagging a couple of down-ballot MVP votes.

Morse

Morse turns 30 in March and has four years and 114 days of Major League service time.  Matt Swartz's projections for MLBTR call for approximately a $3.9MM salary for 2012, Morse's second time through arbitration.  The Nationals control him for the 2013 season as well.

Morse is represented by ACES, an agency that has shown an openness to extensions in the past.  Nationals GM Mike Rizzo has a few on his ledger as well, for Ryan Zimmerman and Sean Burnett.  As a player who will be 30 when the season begins with one full strong season on his resume, I imagine Morse will be more open than most to signing an extension two years away from free agency.

Comparables will be hard to come by.  Two players who signed three-year deals with between four and five years of service might be factors: Michael Cuddyer and Carlos Pena.  Cuddyer and Pena signed three-year extensions for about $24MM in January of 2008, guaranteeing two arbitration years and one free agent season.  Cuddyer's contract had a club option for a second free agent season.

Cuddyer and Pena actually weren't directly comparable.  Cuddyer was not coming off his best season, and had accumulated his service in a normal way.  Pena was coming off a monster 46 home run, 121 RBI campaign after spending most of 2006 in the minors.  Morse's platform year sits between that of Cuddyer and Pena, and his career AVG/OBP/SLG tops Pena if batting average is considered.  However, Morse gets crushed in career counting stats, having only one full season to his credit.  Morse has 383 career games and 1260 plate appearances, compared to 600+ games and 2300+ plate appearances each for Cuddyer and Pena.  Plus, Cuddyer and Pena signed four years ago.

Morse, ACES, and the Nationals might have to forge somewhat new territory.  I propose $3.5MM for 2012, $6MM for 2013, and $9MM for 2014, for a total of $18.5MM over three years.  The Nationals will probably want a club option for a fourth year, perhaps at $10MM.  If the $18.5MM range seems low, remember that Morse earned only $1.35MM in 2011 and his 2012-13 salaries will stem from that amount.

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Extension Candidate: Howie Kendrick

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Icon_13327373Lack of batting titles aside, Howie Kendrick has developed into a solid homegrown star for the Halos.  The 28-year-old is coming off the finest of his six Major League seasons (a career-high 18 homers and a .285/.338/.464 slash line) and with free agency just a season away, the Angels are looking to lock Kendrick up to a multiyear extension.  The Angels have certainly not hesitated to spend money this winter, so let's examine how much it might cost them to sign Kendrick for the long term.

Kendrick turns 29 on July 12 and is entering his last year of arbitration eligibility, where MLBTR projects he will earn around $5.2MM for his 2012 contract.  Rickie Weeks is a decent comparable; he was about to enter his age-28 season and his final round of arbitration last spring when the Brewers signed him to a four-year, $38.5MM extension that also included an $11.5MM vesting option for 2015 based on plate appearances.  A similar vesting option might be preferred by the Angels, given Kendrick's spotty injury history early in his career.

Weeks' value is in his power and his ability to take walks, whereas Kendrick delivers a higher batting average powered by singles and doubles.  Despite these different skillsets, Weeks (106 OPS+ through 642 career games) and Kendrick (105 OPS+ through 655 games) delivered almost the same offensive value through the same point in their careers.

Brian Roberts is another second baseman worth including in this comparison.  Roberts had a 98 OPS+ through the first 665 games of his career but his offensive value was boosted by 136 career steals and the best single-season performance of the trio — a .314/.387/.515 campaign in 2005.  Roberts avoided his second time through arbitration by signing a $4.2MM contract for 2007 and a month later inked a two-year, $14.3MM extension that covered both his final arb year and his first free-agent year.  The Angels will surely want to extend Kendrick for more than just two years, so perhaps Roberts' next extension (a four-year, $40MM deal that runs through 2013) could be the better model.

There are two other factors that weigh against Kendrick.  Firstly, he has yet to enjoy the true superstar campaign that Roberts enjoyed in 2005 or Weeks had in 2010; while Kendrick certainly played well in 2011, his .338 BABIP suggests he enjoyed some good luck along the way.  Kendrick's career .329 OBP is also a red flag as to whether or not he can still develop the patience necessary to be a real force at the plate.

Secondly, Roberts and Weeks were the clear choice at second base for their respective clubs, whereas Kendrick has to contend with Jean Segura.  Segura was rated as the 57th best prospect in baseball by Baseball America prior to the 2011 season and Minor League Ball's John Sickels rated him the third-best prospect in the Angels' system in his most recent rankings.  Segura was moved to shortstop in 2011 and, according to Sickels, "adapted well…although I've talked with people who think he'll still end up at 2B."  Should L.A. decide that Segura is best served at second, Kendrick could be moved to third base or left field, where his bat won't play nearly as well.  With all this said, Segura is still just 21 years old and hasn't played higher than the high Class-A level.  When and if the time Segura is ready for the Major Leagues, Kendrick's extension might already be up.

Let's project Kendrick for a four-year deal that covers his last arbitration season and his first four free agent seasons.  Kendrick can receive $4.5MM in 2012 (slightly below Matt Swartz's projection but teams usually get a bit of a discount on arb years in multiyear contracts), then $11MM in each of the following three seasons.  It all adds up to a four-year, $37.5MM contract that LAA may consider augmenting with a club option year as well. 

Would such an extension be worth it for Kendrick?  An $11MM average annual value would roughly match what Kendrick would get on the open market next winter if he replicates his 2011 numbers this season.  The free agent second base market is usually pretty thin, though the 2013 crop could also see Brandon Phillips and Kelly Johnson available (barring something unforeseen, Robinson Cano and Ian Kinsler will obviously have their options exercised). 

Kendrick hasn't made his thoughts about an extension known, but one would think he would enjoy staying with a team that looks poised to contend for years to come.  The four-year, $37.5MM offer could very well get it done and give Angels GM Jerry Dipoto yet another notable achievement in his first offseason running the team.  

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Extension Candidate: Cameron Maybin

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Arbitration rewards sluggers, closers and above-average starters. Fleet-footed center fielders with modest power? Not so much. That’s why Cameron Maybin is a candidate for a modest extension with the Padres, even after a breakout season. The Padres will likely resume extension talks with the 24-year-old before long, so it’s a good time to look ahead to a possible long-term deal.

Cameron Maybin - Padres

After the 2011 season, MLBTR contributor Matt Swartz empirically showed what teams and agents have known for some time: the one skill that really gets position players paid is power. Batting average and stolen bases “pale in importance to almighty home runs and RBI,” Swartz wrote. What’s more, position does not seem to matter much either. 

This is bad news for Maybin, a strong defensive center fielder who doesn’t hit for much power and calls Petco Park home. The 2005 first rounder will be undervalued through the arbitration process despite his contributions on offense and defense. 

Maybin posted a .264/.323./393 line in 2011 for a respectable 103 OPS+ and he plays better-than-average defense in center field, according to UZR/150 (+11.6 in ’11, +8.0 career). Though Maybin is an above-average player according to wins above replacement, the arbitration process won't recognize his defense, which will limit his leverage in extension talks.

Powerful outfielders such as Jay Bruce, Justin Upton and Carlos Gonzalez all signed extensions worth at least $50MM at similar stages in their careers, but Maybin’s not in line for that kind of deal, since he hasn't showed similar power in parts of five MLB seasons. His representatives may instead be looking to recent contracts for Franklin Gutierrez, Jose Tabata and Denard Span as points of reference.

Gutierrez, Tabata and Span, comparable offensive players to Maybin who also have experience in center field, all signed deals that bought out their three arbitration years and include options for free agent seasons. Maybin currently has more service time than Span and Tabata had when they signed and less service time than Gutierrez had when he signed, but their deals provide a possible framework for the Padres and Baratta Partners.

Span, Tabata and Gutierrez all signed deals that include club options and the Padres would presumably push for at least one option year if they extend their center fielder. A five-year deal along the lines of Gutierrez’s contract would guarantee Maybin more than $20MM. One possible scenario: $500K for 2012, his final pre-arbitration season, $2.5MM, $4MM and $6MM for his three arbitration seasons, $8MM for his first free agent year and an $8MM club option with a $500K buyout for a second free agent season. 

If the sides discuss an extension, as expected, they could explore any number of scenarios, but a five-year deal in the $21-22MM could work for both sides in my opinion. Maybin would get the security of a long-term deal and the Padres would extend their control over a player who’s more valuable than the arbitration process would indicate.

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Extension Candidate: Hunter Pence

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Phillies GM Ruben Amaro Jr. has authored eight extensions since taking charge in November of 2008, so it's only natural to assume he'll attempt to lock up summer acquisition Hunter Pence.  Let's discuss Pence's situation.

Pence

Pence, 28, had the best year of his career in 2011 with a .314/.370/.502 line in 668 plate appearances.  He's averaged 156 games over the last four seasons, with right field defense generally regarded as a positive.  Pence, a client of Beverly Hills Sports Council, has four years and 156 days of Major League service time.  That means he's already been arbitration eligible twice, with two more times to go.  Pence's agency won a hearing last February, scoring a $3.4MM raise to a $6.9MM salary.  The Astros had submitted a $5.15MM figure.  In unparalleled work done exclusively for MLBTR, Matt Swartz projected an even bigger raise this time, taking Pence to approximately $11.1MM for 2012.

In his prime and two seasons away from free agency, Pence may not necessarily be motivated to sign long-term at a big discount.  $23MM could work for his two arbitration years.  It'd be difficult to make a case that Pence deserves Ryan Braun/Matt Kemp money to buy out free agent years, which would be $19-21MM a season.  The $17-18MM range we saw with Jayson Werth and Matt Holliday could work, though those seven-year deals were reached by Scott Boras on the open market.  Pence might be able to get a six-year free agent deal if he remains consistent in 2012-13.  If the Phillies are willing to buy out six free agent years now at $16MM apiece, the total eight-year commitment could approach $120MM.  I think the floor for a Pence contract has to be five free agent seasons at $15MM each, bringing a seven-year deal to almost $100MM.

Pence turns 29 in April.  He one shot at a huge long-term deal in his career, and if he signs now, $100MM is a reasonable target.  The Phillies probably consider Cole Hamels a more pressing concern, but another big year from Pence will either drive the price higher or close the door on a long-term extension altogether.

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Extension Candidate: Asdrubal Cabrera

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It's difficult to argue with the selection of Jacoby Ellsbury as the American League's 2011 Comeback Player of the Year, but Indians shortstop Asdrubal Cabrera belonged in the discussion.  A broken left forearm cost Cabrera much of the 2010 season, but he posted a career year in 2011, winning a Silver Slugger with a 25 home run campaign.  What would a fair extension look like?

Asdrubal

First we must address the question of whether the Indians or Cabrera would be interested in a multiyear deal.  The Indians have to note Cabrera slumped to .244/.310/.419 in the second half.  That's useful for a shortstop, but not star territory.  Then there's the matter of Cabrera's defense, which UZR rates as consistently below-average.

On the other hand, Cabrera played in 151 games last year and hit .289/.344/.486 over the season's first four months.  He may have worn down toward the tail end of the season.  He hit more flyballs than ever and may truly be a perennial 20 home run threat now.  And it's possible the Indians prefer other defensive metrics that present Cabrera in a better light.  Jason Donald doesn't profile as an everyday shortstop; the Indians don't have anyone nipping at Cabrera's heels.

Cabrera, a client of Octagon, has a bit more than four years of Major League service.  Matt Swartz's projections call for a raise of nearly $3MM in his second arbitration year, bringing Cabrera to approximately $4.8MM for 2012.  As a comparison, J.J. Hardy's 2008 season, in which he hit 24+ home runs for a second consecutive year, earned him a $2MM raise heading into his second arbitration year.

Hardy had a couple of injury-plagued years before fully bouncing back in 2011.  His three-year, $22.25MM extension was signed in July, and the $7.4MM average annual value feels well light of what he could have earned on the open market.  Generally players, even shortstops, are compensated more for offense than defense.  Although Jhonny Peralta and Clint Barmes are superior defenders to Cabrera, Cabrera's 25 home run, 92 RBI campaign probably puts him ahead of the $5.5MM-range average annual values they scored on two-year free agent deals.  Of course, Cabrera is two full seasons away from the open market.

Toronto's Yunel Escobar doesn't have the power of any of those players, but he is a shortstop who signed an extension prior to his second arbitration year.  The contract is probably too team-friendly to be instructive, with $5MM salaries for each of the last two arbitration years and two club options for free agent years at the same amount.  Stephen Drew is a point of reference on the other end of the spectrum; he's under contract for $15.75MM for his last two arbitration years alone.

What would be a fair offer for Cabrera?  I'm thinking $4.25MM for 2012, $6.5MM for 2013, and $8MM apiece for two free agent years.  That'd put him around $27MM over four years, a nice guarantee for a player who had never topped six home runs in a season prior to 2011.  The Indians would probably prefer a club option on the last year or two, but with Cabrera within spitting distance of free agency they might not be able to get that.  It's possible the Indians don't value Cabrera's free agent years at that level, but I think a reasonable four-year extension would benefit his trade value.

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Extension Candidate: Justin Masterson

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The Indians have extended starting pitchers C.C. Sabathia, Jake Westbrook, Cliff Lee, and Fausto Carmona in the last decade, in most cases getting cost savings and extra free agent years in the process.  Fresh off a breakout season, could 26-year-old Indians righty Justin Masterson be next?

Masterson

Masterson's 2011 season featured career-bests in innings (216), ERA (3.21), walk rate (2.7 per nine), home run rate (0.46 per nine) and wins (12).  His always-strong groundball rate held up, and his 6.6 K/9 was acceptable.  The knock on Masterson has always been his difficulty retiring left-handed batters.  Though he wasn't able to put them away with strikeouts, Masterson limited his walks against left-handed batters and posted a 3.88 xFIP against them.  In general, he might not be able to maintain 2011's 6.3% home run per flyball rate, but Masterson still remains capable of a sub-4.00 ERA.

Masterson has three years and 108 days of Major League service, so he's arbitration eligible for the first time this winter.  Matt Swartz's projections call for a $3.6MM salary in 2012.  Masterson's arbitration case may be tied to the fates of other first-time starters such as Jeff Niemann, Max Scherzer, and Matt Harrison this year, among others.

In recent times, extensions for pitchers with three to four years of service have been rare.  Perhaps once a player is on the cusp of his first big payday through arbitration, he prefers to see that through for at least one year.  If an extension is preferable to Masterson, his agent Randy Rowley could look to Johnny Cueto's contract, signed a year ago with the Reds.  At an even three years, Cueto had less service time than Masterson, one reason Masterson bests Cueto by 82 2/3 innings.  Cueto still managed four more wins, but they're otherwise comparable, with the career and platform year ERA edge going to Masterson.  The numbers converge further if we only look at Masterson's 87 career starts.

Cueto signed a four-year, $27MM deal.  He received $16.2MM for his three arbitration years and $10MM for his first free agent year, with a club option at the same price for another.  The same contract would be a reasonable target for Masterson, perhaps with a few hundred thousand tacked on so he could top Cueto.

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Extension Candidate: Sean Marshall

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While Cubs closer Carlos Marmol grabbed attention the past couple years for his staggering strikeout rate and spectacularly excruciating blown saves, North Siders fans and fantasy owners in holds leagues alike will tell you that left-hander Sean Marshall was something of an underappreciated gem in Chicago's bullpen.

Indeed, after struggling as a starter early in his career, Marshall, 29, has settled in nicely as a reliever, serving as a dominant setup man in his two seasons spent exclusively in the bullpen. Last year was his finest, as the southpaw posted a 2.26 ERA, 9.40 K/9, 2.02 BB/9, 57.5% groundball rate and compiled 2.8 WAR. Apparently, the Cubs' division rivals took note, as Marshall changed uniforms within the NL Central in December, joining the Reds in a seemingly out-of-nowhere trade that sent Travis Wood back to the Cubs.

Marshall is set to earn $3.1MM in 2012 and is scheduled to hit free agency after the season, although Reds GM Walt Jocketty indicated that Marshall's foray into the open market may never come to fruition: "No guarantees, but we're going to try to sign him." Interestingly, Jocketty also said the Reds have not yet deterimed Marshall's role and left open the possibility of the left-hander closing, contingent upon whether they sign someone else to handle the ninth.

While we could debate the merits of strict bullpen distinctions such as "setup men" and "closers," the fact is that pitchers in those respective groups are usually compensated differently. So the uncertainty regarding Marshall's role and the Reds' interest in, or ability to, procure a so-called closer may be more than a minor footnote to the trade, at least with respect to Marshall's next contract.

If Marshall and his representatives at Meister Sports Management are amenable to signing an extension now – and reading the tea leaves from Jocketty's comments, they might be – they'll likely use the three-year, $15MM deal lefty Scott Downs signed with the Angels last offseason as a starting point in negotiations. And in light of the big contracts relievers have been securing this offseason, an annual average salary of $5MM is probably modest, so it could be bumped up from there.

The bird-in-hand philosophy could probably make Marshall a wealthy man before he even throws a pitch in 2012, but if he wants to leave open the possibility of getting paid like a closer, he could opt to play out his contract year. This would be an especially risky tack for a reliever, who are notoriously volatile from year to year, but could prove lucrative if Marshall is thrust into closing, approximates his 2011 numbers and hits free agency as a 30-year-old coming off a season in which he sewed up 35 or 40 saves.

While there are a few conditions that have to fall into place in that scenario for Marshall before we get ahead of ourselves, it's worth noting that Ryan Madson basically followed a similar arc and positioned himself for a windfall heading into this offseason.

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