7:00pm: Yahoo’s Jeff Passan reports that Strasburg’s contract does include limited no-trade protection (Twitter link). Passan also adds some context to the deferrals (links to Twitter), reporting that Strasburg’s 2023 salary is a staggering $45MM, but as Svrluga reported, he’ll receive just $15MM in that year, with the rest being deferred. The present-day value of the deal, when factoring in the $70MM worth of deferrals, is a bit north of $160MM, per Passan.
9:19am: In a move that has drastically altered next winter’s free-agent market, the Nationals have officially agreed to a seven-year extension with righty Stephen Strasburg. He’ll reportedly earn a guaranteed $175MM over that term, though the deal does come with some wrinkles.
First and foremost, Strasburg will take home only $15MM annually over the seven seasons of the contract (2017-2023), Barry Svrluga of the Washington Post reports. The remaining $70MM will be deferred without interest and paid out in $10MM installments over 2024 through 2030. That payout structure obviously reduces the present value of the contract: per Svrluga, the club estimates that the deal would be for something like $162MM if those annual salaries were paid in full each year during the seven-year term.
The deal also affords Strasburg opportunities to opt out after its third and fourth seasons. (He’d keep the $25MM annually for the first three or four years, with the deferred amounts moved up.) Strasburg can also tack on $1MM annually for every season in which he reaches 180 innings. So far as has been reported, Strasburg won’t receive no-trade protection and there are no provisions relating to arm health.
Strasburg had been set to reach the open market after the year, and there had been no hint that a deal was in the works. The Scott Boras client currently sits atop the 2016-17 Free Agent Power Rankings of MLBTR’s Tim Dierkes, and had every hope of matching or exceeding the $200MM+ contracts landed by aces Max Scherzer and David Price over the last two winters.
There are some major limiting factors in Strasburg’s case, of course, including his prior Tommy John surgery and injury-limited 2015 campaign. While the Nationals are known for their successful rolls of the dice on pitchers with questionable elbows, the long-term durability of Strasburg’s replacement UCL remains an open question. Additionally, despite generally excellent results, he’s never quite been as dominant as his peripherals would suggest and he’s only topped 200 innings in a season once.
Still, there’s plenty of reason to think that clubs would have lined up for a chance to add Strasburg this winter. He’s pitching in his age-27 season at present, meaning he is selling several younger campaigns than were pitchers like Scherzer and Price. And apart from a bit of a blip last year, Strasburg has been one of the game’s most effective starting pitchers.
In the aggregate, Strasburg has given the Nationals 818 2/3 innings of 3.06 ERA pitching in his seven years of major league action, with a sterling 10.4 K/9 against 2.2 BB/9. But ERA estimators are in accord in suggesting that he’s been even better, as Strasburg carries a 2.78 FIP, 2.72 xFIP, and 2.77 SIERA for his career.
Strasburg has a deep and varied arsenal, beginning with a pair of mid-90s fastballs. Though he’s now sitting just under 95 mph with the heater, well below his early-career numbers, Strasburg has never been wholly reliant on upper-tier velocity. He’s increasingly utilized a slider this season, joining with his already-stellar curve and change to give him five legitimate offerings.
Both sides clearly have their reasons for agreeing to terms, though it remains an unexpected strike given the righty’s combination of age, performance, and short time left to reach the market. Strasburg won’t need to worry about another injury or performance decline interceding before reaching free agency, and he’s clearly comfortable in D.C., which made him the first overall draft selection back in 2009. And for the Nationals, acting now not only represents a chance for a nice discount — particularly once the deferrals are accounted for — but prevents the need to bid for Strasburg’s services against other organizations in a market that is largely devoid of pitching talent.
It’s worth noting that the Nationals are intimately familiar with Strasburg’s health and work ethic, particularly after going through the infamous shutdown of 2012. Having helped spurred the surprising Nats to the front of the NL East, Strasburg was shelved for the end of the regular season and the postseason because he reached pre-determined limits in his first year back from Tommy John surgery.
That episode led to plenty of criticism of GM Mike Rizzo, but Strasburg has not had any elbow issues since. And it seems that the good will has paid off with this deal. It’s fair to note, too, that other pitchers who were handled differently (e.g. Kris Medlen) experienced renewed arm problems, though elbow health remains a murky and complicated subject.
Strasburg is now set to stay with Scherzer atop the Nats staff through at least 2019, when he’ll first have a chance to opt out in advance of his age-31 campaign. It’s fair to say that the rotation looks to be in solid shape for some time to come, as the organization also controls its other current starters for multiple seasons: Gio Gonzalez (through 2018), Tanner Roark (2019), and Joe Ross (2021). And that’s before considering top prospect Lucas Giolito, who has yet to crack the majors.
Chelsea Janes of the Washington Post reported the agreement on Twitter. Jon Heyman of MLB Network reported the length and guarantee, as well as the inclusion of opt-outs, deferrals, and a $1MM annual incentive package (links to Twitter: 1; 2; 3; 4; 5). Ken Rosenthal of FOX Sports tweeted details on the opt-out, as did Barry Svrluga of the Washington Post, while Joel Sherman of the New York Post tweeted details of the incentives.
Photo courtesy of USA Today Sports Images.
Woah! Never saw that coming’!
really? He is playing amazing. The best since his rookie year. We all seen this coming eventually because he might develop into one of the best pitchers of this era.
I meant I never saw the Nats retaining him, nonetheless during the season.
sheeesh
Wow, surprising, but very good for both the Nats and Strasburg!
Quite surprising with Boros involved, but Strasburg is comfortable there and a great fit. Good for both the team and Stephen! Will be interesting to see the length and terms. Watching the game on MASN and nothing said about it.
Not good for the Yanks. He would look good in pinstripes.
Having followed him at SDSU and into the big leagues, I tend to think Strasburg is one of those personalities who wouldn’t fit well into the New York market. Luckily for him, we don’t need to find out.
All more reason for Yankees to trade Chapman for pitching prospects
Lol. I honestly do not understand how anytime a player gets an extension or signs with another team, it’s “not good for the Yanks”
There is more to baseball than the Yankees, Red Sox, Dodgers and other big market teams.
No there is only the Yankees
The Yankees bite. Let the Nats now re-sign Harper as well, or send him to the only real team in NY…the Mets.
Mets would never spend the money. Let’s what kind of extensions the mets get done in next couple of years. Forgot how many championships the mets have won. The real team in NY with the money and willing to spend it is the Yankees. Mets will have to get some World Series wins before they are the toast of the town.
NYY will have a lot of money off the books, and with the top arm off the market and a need in the rotation — how can you read this as anything but “not good for the Yanks”. Andrew Cashner is the only SP in the Top 10 of the MLB Top FA List (2017) — and then you’re looking at Jorge de la Rosa, James Shields (if opting out), Scott Kazmir (if opting out), Edinson Volquez, Kris Medlen, Jesse Chavez, and Ivan Nova. Whew! Now that’s “not good for the Yankees” if thinking they’re going to upgrade their rotation and presumably keep their farm by not trading them away for some arms. I would think Cashman needs to start considering trading for arms this season, like Teheran and others that could be had for the right price.
Tyson Ross is another target that I’m sure SD would be listening on eventually, if not now knowing his stock is low(er) from missing games from an injury.
I think you’re missing my point. Why don’t you read my last sentence again.
Nothing but garbage on market next year. Agree with RunDMC. They will all be overpaid with bad contracts. Use expiring contracts and trade for all young pitchers. Don’t pull a Cashman panic deal and sign us up for more years of riding bad contracts. Going to be riding Ellsbury and Headley for a while and still have CC and Arod to ride another year out.
Here’s the thing about trading. It takes at least two teams to make a trade. And a trade needs to be a win for all teams involved. Not very many teams give up good young pitching talent. And most of the time a rental type guy is not going to bring back a top can’t miss pitching prospect. Sometimes even when things make all kinds of sense, they make no sense at all when it comes to trading.
Definitely, a blow to the FA class for SP this off-season. Was really hoping to see him in pinstripes next season. But congrats to Strasburg and the Nats on agreeing to a extension
Looks like the Top Free Agents list will have to be edited again…
Cespedes is about to get paid again, as he’ll be #1 on the FA List when it’s redone.
steal for the Nats, that dents the FA market for this offseason. wooow.
If this is true, boras definitely believed Strasburg’s market was going to be severely impacted by his recent surgery 2 years removed.
How do you figure? What people fail to understand, is Boras WORKS for him, and ALL of his other clients! Boras doesn’t get to tell them where they are going to pitch, the PLAYER tells him what offer to accept!
Exactly. I am sure Boras made it quite clear to Strasburg that, especially considering the weakness of the starting pitcher market next year, he was likely to get more in free agency. In the end, it was the player’s decision.
Yes, but if they hired Boras to be their agent in the first place, it probably means they want the most money possible, regardless of what team is offering it.
Boras is the top agent for many more reasons than just money.
Good deal for Washington. An indicator of Harper’s departure after 2018.
Because they can’t extend a Pitcher AND a Hitter too?
I imagine it’s going to be difficult for the Nationals to have three players locked up for >$80MM/yr. Granted Werth is off the books after 2017 which frees up $21MM and Papelbon’s $11MM is done after this season.
But they’re also going to have arb eligible players in Rendon and Taylor, and they may want to bring back Ramos which won’t be super cheap.
It won’t be easy, and there’s probably good reason to believe Harper would test the FA market – he could be in line for the biggest payday ever. But it’s not like WAS are broke – they will have Weyrth etc coming off the books. They can cope with spending $ more than most.
My point is, signing Strasburg doesn’t mean they can’t afford Harper all of a sudden.
They won’t be able to afford Harper , he will be with the yanks in 2018.
As an Angels fan, you should be well aware that teams other than the Yankees, are capable of doling of horrible, crippling contracts.
Hahahaha. This is why we need the up vote button back.
7 year/ $175 mil is a great deal (for both Strasburg and the Nats)
Wow he could have made over 30 mil a year
I don’t see how he could have got Kershaw money.
I think any of us would sign up for 175 million for next 7 years guaranteed. He could also blow out his arm for good over rest of season and never have got another contract. It may very well be more money than that. Boras doesn’t cut too many deals short on the money.
Wow, that’s a surprise! Cool.
Good deal all around.
The nationals have a super rotation but not like the mets , but I thought they were gonna let him walk bc gioloto is knocking on the door , maybe they trade Roark or gio.
To everyone saying that he could have made $30+ mil per year: Yes, he might have left a little on the table, but for an injury prone player, I think $25 mil is a fair market price. If he were to get injured at any point this season, he would have had to take the qualifying offer and replicate a great season, at which point he would not have been a $25 mil/year guy. So in retrospect, this is the absolute perfect move for Boras and his client in this particular case.
Also, what’s the big difference between a $175 million dollars and $200 million dollars? He was already set for life after receiving $14 million upon being selected first overall. None of these players are ever going to spend all of this money in their lifetime so it doesn’t really matter what he supposedly could have gotten on the open market. The potential to earn a few extra dollars is not worth losing hundreds of millions.
I don’t think he could have gotten that much– he’s not a Kershaw or a Greinke– but obviously it’s a moot point now.
No one is Kershaw but Strasburg is much better than Greinke when healthy. He could’ve gotten $200 mil+ easily. Great deal for the Nats
“No one is Kershaw but Strasburg is much better than Greinke when healthy”
mmmm, not really: Health matters, and over the last 4 seasons Greinke is ahead in innings pitched by 90, ahead in WAR, ERA and they are about a tie in FIP. Considering age, Strasburg has an edge, but I don’t think it’s fair to say Stras is “better” when Greinke has consistently been the healthier and more productive over more innings. example: over his last 9 seasons Greinke has averaged 4.7 fWAR, Stras has averaged 3.8 over has last 4 seasons.
I agree with everything you said except none of the players spending the money. It’s amazing watching how fast these athletes can blow fortunes. Some spend as much as they are making and not planning on 40-50 years of life after making that much yearly and can’t keep up with lavish wasteful lifestyle they were living. Not saying all but happens.
To be that guy, the difference between 175 and 200 million is 25 million;)
To be THAT guy, the difference between 175 and 200 million is 199,999,825
Can’t argue with that math.
And surprisingly, $25 million is how much Strasburg has made in his pro career including his contract this year.
Well! That’s certainly a surprise.
I feel bad for Lucas gioloto now , he’s knocking on the door and the Nationals already have their rotation set , they prolly trade gio or Roark
Don’t feel bad for Giolito, he’s the number 1 prospect in all of baseball. They are gonna find room for him when he’s ready
I think he’s ready right now, one of the arms they have will be traded
No such thing as ‘too much pitching’…
Theo/Jed have been relentless about ‘planning for injury’ (Theo’s quote is ‘in baseball, he doesn’t understand why people say injuries are a variable. Injuries are actually a constant, they always happen. What you don’t know is who, when or for how long… Planning for injuries is part of the (GM) job’). Seemed odd, all the ‘extra’ (i.e. Depth) players they kept bringing in (players who have already contributed and players who are still ‘insurance policies’ in AAA .. And thank goodness they didn’t trade Baez, soler, szczur)… They never stop upgrading every ‘slot’ on their 25/40 (btw, the cardinals have known this forever .. The Angels don’t have a clue)
No need to trade anyone.. Strasbourg is not a (consistent) 200 inning guy anyway.. If you offer giolito, you’ll (obviously) get lots of takers..
If you are so sure about everything you post, why don’t you go be the Angels GM? Seeing how their season is over, they could use someone ruining it even more. Btw, next time your comment doesn’t get a reaction, don’t repost the same thing just worded differently to try and get attention. You act like a jealous teenage girl when you do that
Hahahahahah Cubsfan your the man!
A little surprising but I suppose with the start Stras has had so far it doesn’t make this deal too surprising.
Probably could have received more elsewhere, but I guess Strassy didn’t want to go through that ordeal………………yet.
I think this is a true win-win. For Strassburg, he just got himself a $175M insurance policy with two opt-outs if he wants to spin the wheel again, and his health and performance support it. For Washington, they secure the next few years at a reasonable cost. Compare this to the Price deal (no knock on Price) and I think the values are very much there.
You are right on on every point. (I would say 7/$175 is ‘below market value.’ I am amazed a boras client signed an extension, particularly with a) Strasbourg’s start and b) the weakness of the FA class this year.. Regardless, great, honest and fair deal for both sides (boras has just never been happy with good or fair in the past). Glad it worked out for Strasbourg, hope a similar type deal can be made for arrietta
Boras did it cause Strasbourg told him what’s up!
So the best pitcher on the free agent market next year will be…Rich Hill? Wow.
Possibly Otani from Japan if hes posted will be the #1 I think most would put Cashner ahead of Hill too simply due to age.
Doesn’t James Shields have an opt out? I’d put him above Cashner, easily, even though he’s much older.
He does but I think even on an empty market he would have trouble getting more money than he already has due. Cashner even though struggling has more upside than Shields does, for some reason starting in 2015 petco has turned into a launching pad, maybe its the pitching maybe its the weather, maybe its a little of both.
He probably watched Ian Desmond turn down 120 million or whatever to sign a one year deal for 8 million and said ya I’ll take that money!
Great point
“Strasburg can also tack on $1MM annually for every season in which he reaches $1MM.”
This is a provocative contract clause, though mighty easy to reach in really any contract extension. Perhaps not the first year of an extension for someone with less than a year or two of service time but for other extensions it’s like free money.
Sucks to be a nationals fan right about now. HUGE risk. Could pay off though.
Why? The fans don’t pay the contracts….
In a sense, they do. Go check out ticket prices in NY compared to.. Seattle, Miami, Minnesota, etc.
True true
As a Nationals fan I disagree; I am ecstatic to see Scherzer, SS37, Ross and Giolito for the foreseeable future.
I remember when Beckett left money on the table to sign his extension in 2010 less than a year from free agency and I warned this could be a sign he is not healthy. Sure enough he ended up on the DL shortly thereafter and was no better than league average the rest of his career.
I feel a pitcher who is not feeling that confident in his future health is more likely to leave money on the table. Also, Strasburg like Beckett (labrum issue with Marlins) was probably not insurable, unlike Scherzer, so could not take out a policy to cover them in case they get injured
He is still getting $175 million dollars to pitch. The difference between $200 million and $175 million is negligible at best. It’s not like he is giving up $200 million for a $100,000 a year job at Apple or anything.
I don’t think he would have had to take deferred money on the open market, this contract is worth much less than the 175 million dollar face value.
87% of $200m or $200m isn’t negligible – players choose one team over another for far less than that difference all the time. But, depending on the length of the deal and player and team (and agent) involved it’s a small enough difference that it’s easy for other issues to take precedence in the negotiations, especially in an extension where everyone knows each other already.
Mike Rizzo is a magic man. He makes trades and extensions appear out of thin air. Seriously though, how does he sneak all these deals past social media?
More deferred payments for a Washington entity — what a surprise they feel comfortable operating for the next few decades in debt. Can’t wait to see Harper’s deal that will be paid out after the apocalypse when John Conner saves us all.
I can’t decide whether they’re deferring all this money because they want to win with Scherzer, Strasburg, and Harper together and it’s the only way to afford them all, or because they can’t even afford Strasburg, and Harper will be let go.
Could be a strategy of deferring Stras’ money to free up more “present-day” funds for Harper. I’m not really sure about their financial standing, being a Braves fan I’m envious of it, but I can only speculate.
As I understand it, deferred money is related to their television rights deal. The Nats have an ongoing debate and legal action with and against Orioles owner Peter Angelos who holds the majority of shares in MASN, the Nationals” broadcaster. Obtaining a settlement in the action would open the vault for a much larger revenue stream (and add to the war chest to pay for Harper). But until then, they’re deferring contract money.
But if the new TV deal isnt as lucrative as they hope or expect they are still stuck paying roughly 10% of the luxury tax limit to Strasburg and scherzer for a decade. Hope the Nats get a title soon, otherwise it could get really ugly in 5-6 years
Anytime a team can get deferred money at 0% (which is what they got w. Strausburg)…they should do it. They get to invest that money over the term of the contract (and then some), so they net inflation + whatever money they can make during that time period.
While this remains a nice tidy pile of cash for Strasburg it does lead me to another question. Is the deferral of millions of dollars a team-initiated thing or is this new approach from the Boras Corporation? If you remember a similar structure was used for Chris Davis’ contract as well. It was (reasonably) assumed at the time this was a way for the Orioles to keep the present payroll lower for extending players like Machado and Gausman, but since this is the second high-profile Boras-represented player it makes you wonder if this is his new M.O.
It’s clearly an organizational approach, driven by the TV rights thing as well as, perhaps, just general financial maneuvering. But you are right to note that Boras seems to have adopted it as well, and it’s worth keeping an eye on that. There are apparently tax implications that essentially allow both sides to benefit (at least, there were in Scherzer’s case) and there are some PR benefits, too, of course.
How does deferred money work with opt outs? Do the Nats have to pay the deferred money no matter what even if he opts out after 3 years?
Good question. My initial reaction is that an opt out should void the whole contract but I imagine there’s language in the contract discussing some kind of settlement for the deferred money like a buyout of sorts. I’m not an expert but that’s my thought
This is also my question. I’m assuming that if the opt out happens after 3 years, he would get 3 years of the deferral, but that would be interesting to see how they worked it out. Otherwise, his opt outs would leave 4 years and $140m on the table or 3 years and $125m on the table, which I don’t really see him doing.
I think it has the opposite affect and makes him more likely to opt out, the deferred money is more of insurance to Strasburg he would rather have the money sooner which an opt out would enable him access too. This gives him future insurance + 3 years to prove his durability. He also could have some strange medicals that would scare teams if he entered free agency now and just wants to avoid that until its cleared up.
Barring any reporting to the contrary, my assumption is that it’s structured like this: Strasburg is owed $25MM annually, $10MM of which is deferred by seven years. So, if he opts out after three, he simply would earn $15MM for each of those three years and get his $10MM payouts when the time comes for those seasons. The rest would just go away.
Jeff, I don’t know if you know the answer to this, but when a player earns deferred money that is paid after he retires, does he still need to pay income tax (apportioned) to all the states he has played in, or does the state income tax only apply to the state he is residing in when he receives the payment. If the latter were true, it would enhance the value of the deferral.
I’m almost positive it’s just going to be taxed wherever he happens to be (or perhaps at the DC tax rate but I don’t know how that works).
There was a lengthy explanation of it in the Scherzer case, which I don’t specifically recall, but is publicly available. Not sure if/how it would apply for Strasburg’s case specifically.
I don’t know specifically, but as noted, it was discussed at length in Scherzer’s case. That would be one possible benefit. Also, differing residence status post-contract could result in tax benefits if you went to a lower-tax state — in theory, again, I don’t know details.
Thanks—Here was the quote: “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.”
Seriously
One more deal were Boras completely rip off the Nationals Management.
Strasburgh will never give them value for that money.
Deferred money…. 25M now (15 Scherzer- 10 Strasbrug) if they continue that management will pay more to retire dudes then there actual players.
Other ownership must be laughing there ass out seeing how dumb this big market team is doing.
It’s a basic financing move that makes the deal worth less than the reported 175.
Call me old fashioned, but I like my $20 mil/year long term extensions to go to a pitcher I know can give me 200 innings more than once in his career.
And how do you know he will continue doing it just because he’s done it before?
I think it reaches a point where you can say a guy pretty much has a rubber arm like Shields, of course it is no guarantee, it isn’t impossible to believe durability will come with age for Strasburg either AJ Burnett became pretty durable as he aged.Some teams look at innings logged negatively some look at them positively.
I hope they took out a hefty Dusty Baker Insurance policy.