A Reprise: Extend Gallardo Soon! | Disciples of Uecker

Disciples of Uecker

We'd like to go to the Playoffs, that would be cool.

On December 11, 2012, I argued that the Brewers should extend the contract of franchise starter Yovani Gallardo after the Zack Greinke deal exploded Matt Cain‘s previous record for right-handed starting pitchers, while simultaneously lowering the threshold for performance value to gain such a contract. The basic from that post:

My initial argument relies on several factors about the Brewers’ current franchise starter:
(1) Gallardo is one of the most consistent National League starters to work 100+ IP over the last four consecutive seasons, posting four consecutive above average years (not even Greinke can claim four consecutive above average seasons).
(2) I’ve argued this in previous posts, but Gallardo’s trends look somewhat similar to mid-20s, mid-service time extensions to Jered Weaver and Justin Verlander. While some of Gallardo’s campaigns are closer to average, he also features consistent innings pitched, strike outs, and solid fielding independent elements that suggest that he can maintain a strong performance for some time.
(3) Gallardo’s easy-going, easily-repeated mechanics make him a less likely candidate for injury than other starters (I realize that any starter can be subject to freak injuries, Gallardo included, and freak arm injuries, too, but, Gallardo’s mechanics at least give us reason to expect that he should remain healthy).

While my basic sentiment remains the same — the Brewers should capitalize on Gallardo’s current service level in order to advance their control of the reliable righty before they are forced to bid for his services in an open market — the conditions are less urgent. Of course, the club does control Gallardo for at least two (and possibly three) more years, so it’s hardly a position of necessity. Rather, it’s a position that relies on the expectation of growing RHP contracts; it’s safe to say that right-handed pitching has never been valued this much. However, since my previous post, the contracts signed by Anibal Sanchez,Edwin Jackson, Ryan Dempster, and R.A. Dickey stabilized the RHP market.

Contract Conditions
Dickey and Dempster are tough cases for contract comparisons because of their career circumstances. Dempster, for instance, claims more than a dozen years of MLB service, and is arguably beginning the path of contracts to wind down his career. Dickey is a knuckleballer, which brings all sorts of prejudice for future expectations, and of course, reasonably means that no one has any idea how long he might pitch. Their two-year, $25 to $26+ million deals reflect their career circumstances.

Sanchez’s 5-year, $80 million deal might seem extreme given his generally middle-of-the-road performance level and his injury history. My favorite part of that deal was reading comments on MLB.com about Sanchez’s career losing record and 3.75 ERA; suffice to say, most MLB fans seemed to think that Sanchez’s deal was undeserved. However, given that a gang of youngsters from Felix Hernandez to Verlander to Weaver signed deals around 5-years, $80 million in their fourth and fifth service years, Sanchez’s $80 million mark after more than six service years is the perfect antidote to the Greinke deal. After Cain and Greinke blew the market wide open (and, arguably, the James Shields and Wade Davis trade created artificial excitement over average RHP), the sky was the limit for Sanchez. That Sanchez’s free agency deal matched arbitration buyout deals signed over the last three years was a victory for MLB front offices. (Following this logic, the Jackson deal appears to be an average-pitching contract floor; Jackson maintains a solid, $50 million range for durable starters that are not the best in their free agency classes, but still offer value through durability).

Between the Sanchez and Greinke deals, then, we can form a more detailed argument in favor of extending Gallardo. First and foremost, we can generate the demand to extend Gallardo from the ever-increasing top end free agency contracts for righties, noting that if Gallardo is the top free agent after 2015 (assuming the Brewers exercise his option), the threshold for elite money is no longer connected to the expectation for elite performance (or rather, elite free agency money is no longer a payoff for elite performance). However, from the Sanchez deal, we can draw a foundation for a Gallardo extension based around a tradition for average-to-slightly above average performance levels. If previous 5-year, $80 million deals were reserved for buying out elite or potentially elite arms like Verlander, Weaver, and Hernandez, they are now acceptable for veteran starters that are second-fiddle in their free agency class.

Pending RHP Explosion
Looking through BaseballProspectusCot’s Baseball Contracts database, there are several competing classes of right-handed starters that can become free agents within the next few years. These competing classes include pitchers such as Verlander and Hernandez, who have the chance to destroy Greinke’s record-setting deal, as well as formidable or potentially elite starters such as Johnny Cueto, Josh Johnson, and Tim Lincecum, and steady, dependable (or even relatively dependable arms) such as Chad Billingsley, Matt Garza, and yes, even James Shields. Given the fact that these pitchers’ free agency corresponds with the influx of new TV money to MLB front offices, these starters could receive excellent, elite deals.

Meanwhile, a long glance forward suggests that Gallardo’s potential free agent class could be brutal — not unlike the 2012-2013 offseason. If the Brewers take Gallardo’s option, and he becomes a free agent after the 2015 season, he could share that class with divisional opponents Mat Latos and Bud Norris, potential aces Ian Kennedy, Jordan Zimmermann, and Tommy Hanson, and other solid arms like Trevor Cahill. Some flat-out question marks and potentially strong arms such as Rick Porcello, Jhoulys Chacin, and Clay Buccholz could also be a part of that 2015-2016 free agency class. Of course, a good number of these arms (especially Latos, Zimmermann, Kennedy, Cahill, and Hanson) are excellent candidates for arbitration buyouts. By the time we actually reach the end of the 2015 season, one wonders how many of these arms will actually compete with Gallardo for free agency money.

Gallardo, of course, turns 30 for the 2016 season, which makes him a prime candidate for a multi-year free agency deal. His turning 30 also means that a contract extension need not take him terribly far into his 30s; a loaded 4-year extension, for instance, would keep the dependable hurler in Brewers blue until his age 33 season. In this case, Gallardo’s age is a favorable selling point for the righty, which probably makes him more likely to simply play out his contract in Milwaukee and test free agency.

Yet, one wonders how an Anibal Sanchez-type deal would suit the righty. First, the Brewers could exercise his 2015 option now, and add a $3 million bonus to that year. Secondly, the Brewers could offer a 4-year, $72 million extension beyond the 2015 season. This extension would cover Gallardo’s age 30 through 33 seasons, and keep the reliable righty in Brewers blue for at least 13 total seasons from the start of his career. While the total value of a $75 million contract would likely be shy of what Gallardo could earn on the free agency market, the guaranteed contract in 2015 (plus a raise) and guaranteed money through his age 33 season would lend Gallardo seven total seasons of security. That type of deal would hopefully ensure that the Brewers have dependable starting pitching while they continue to build up the arms in their farm system and develop those arms into serviceable MLB arms.

BaseballProspectus. Prospectus Entertainment Ventures, LLC. 1996-2013.

Baseball-Reference. Sports Reference, LLC. 2000-2013.

IMAGE: AP Photo/Al Behrman

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Tell us what do you think.

  1. Beep says: January 3, 2013

    I’d extend Yo for 4yr/$72mil in a heartbeat. He’s the perfect anchor to the young rotation we’re going to have cost control over for that entire extension. Plus, if he would agree to front loading it as you describe, that makes him much easier to deal Melvin/Attanasio decide to blow things up and move Hart, Weeks, etc.

    • Nicholas Zettel says: January 3, 2013

      It would be interesting to see the Brewers sign Gallardo and then trade off players like Hart and Weeks; I wonder if the Brewers could sign Gallardo as a rotation anchor regardless of their general plans to “win now” or trade vets like Weeks or Hart.

      • Beep says: January 3, 2013

        I don’t see the Brewers doing anything drastic in 2013 since only Hart is in a contract year and the rest of the core is intact, but I definitely could see a potential firesale happening next winter or at the 2014 trade deadline with Weeks and ARam contracts up at the end of that season.

  2. SecondHandStore says: January 3, 2013

    I like Gallardo as much as the next guy, but even considering future market values, I’m uncomfortable paying him $18MM AAV. I wouldn’t be happy if they gave him anything over $16MM AAV.

    • Nicholas Zettel says: January 4, 2013

      I’d be interested to know why the cut off at $16M — would an Anibal Sanchez deal work in that case? I think looking forward, Gallardo’s type will be more likely to receive $20M deals. I believe the Brewers can extend Gallardo by splitting that difference.

      (I also think that with the increase in TV money, they should make such a deal. There’s little point in competitive balance and revenue sharing if they don’t spend the money to keep their best developed players).

      • SecondHandStore says: January 4, 2013

        I might catch some heat here, but I think at best Sanchez and Gallardo are of equal skill level, at worst Sanchez is better, or will be going into the future. If we were to extend Gallardo now, I wouldn’t want to do it for more than Sanchez got. If we were to extend Gallardo as he hits free agency, I’d expect to pay more and begrudgingly accept that it’s part of the beast. But to do it now and spend more than Detroit did I think would be slightly unfortunate. I don’t think it would be an egregious error, but it would be an overpay. In my estimation anyway.

        On a side note of sorts, I’m a little worried about the mile drop in velocity, but that could be anything or nothing.

      • Nicholas Zettel says: January 4, 2013

        I think that’s fair on the skill level, although I’d add that Gallardo has had a much better injury history, and his mechanics should help him work into the future.

        What’s extremely interesting about Gallardo is that while his fastball has fluctuated between 91.2 and 92.7 in his 100+ IP seasons, his slider progressively increased from 85.4 to 87.4 from 2009 through 2012 (and his selection of the pitch doubled). Is he throwing a cutter? Perhaps that might explain a slightly slower primary fastball, alongside a smoking slider…

  3. Chris says: January 6, 2013

    Nic, with the recent drafts of Starting pitching and this sudden influx of young pitchers trying to make their way on to the rotation,
    The question from me is, “What if almost all of the young pitchers work out?”
    Estrada remains that “Pocket Ace” you like to refer him as?
    Fiers while never scouted to be effective continues to outperform the scouting and is a legit under 4era starter?
    Peralta becomes more consistent hitting the strike zone and grows in to that #2 hype? to solid #3?
    Thornburg/Rogers/Narveson one of those 3 or even better 2 of them become dependable 3/4s?
    Then you have Bradley,Jungmann,Burgos,Nelson,Pena,Hellweg,Bucci, and Gagnon in the works. And, I would think 1 of those names pushes themselves on to the Brewers maybe by September this year or else before AS break 2014.
    What happens then Locking in a high contract through to what? 2018? While a seemingly 5man rotation will be solidified around the time 2015 hits?
    If anything, I would think Gallardo becomes a huge trade piece after this season(in the scenario of the young guns being mostly successful) The teams who if not throwing in an extension that may want Gallardo for the last year before these guys turn FAs:
    Those teams may want to make a push to win it and seek Gallardo to Boost their Staffs for an epic WS run.
    Seattle really strikes me between Walker,Hultzen,Paxton all about to get their feet wet this season and then in turn the last year of Felix, with Gallardo, and those three could become a force for one year. A player I could see Milw getting is Franklin to play SS and Segura becomes 2b replacing Weeks. And in turn rather than have 16-18mil locked in to Gallardo, the team gains payroll flexibility, doesn’t block the road of all these drafted pitchers to become starters and also gain a position player with team control. This is the scenario I see playing out should 3 SPs emerge as solid starters this season.

    • Nicholas Zettel says: January 7, 2013

      I think it’d be great if all those pitchers work out, but that still leaves the question: if they work out, how many of those young pitchers are going to be better than Gallardo?

      One of the things about Gallardo is, he’s younger than Estrada, Fiers, Rogers, and Narveson. He’s also better than those four; you don’t worry about Gallardo blocking any of those pitchers.

      I think the Brewers have quite an easy scenario with their youngsters; put ‘em in the bullpen if the rotation spots are filled, or trade ‘em, once their time in the minors is done and it’s no longer prudent to shuffle them between AAA and Milwaukee.

      I like the idea about Gallardo as a trade piece, but at some point, the Brewers need to figure out who is anchoring their future rotation. It sounds nice to talk about all the youngsters working out, but I’m not convinced that a rotation of our 5 best young pitchers is going to be as good as a rotation of Gallardo + our 4 best youngsters.

  4. The_Ignitor says: January 6, 2013

    The Brewers have Gallardo signed for 3 more years. THREE MORE YEARS. You know the old saying, “There’s no such thing as a starting pitching prospect.” The reasoning behind the saying is because with injuries and ineffectiveness Pitchers are really hard to predict. Now the Brewers are trying to give Gallardo a contract based on how effective he will be 3 years in the future. The worst thing is you guys are trying to give him money based on if he was a free agent today. Haven’t we seen enough young pitchers implode to stay away from that fiasco?

    Unless Gallardo is willing to take a significant amount less (10-14 mill a year) to sign an extension I say we let it ride out a year or two before we start talking contract extension.

    • Nicholas Zettel says: January 7, 2013

      I think that’s a legitimate point about the control years; I think the gamble with Gallardo is that extending him now would yield a better contract for the Brewers. I am not looking forward to RHP pitching rates after Verlander, Hernandez, and even Garza hit the market.


Websites mentioned my entry.

  1. Daybreak Doppler: The Wild(card) Weekend Ahead | PocketDoppler.com
  2. Emerging Contracts: Revisiting Gallardo’s Value | Disciples of Uecker

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