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.
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 BaseballProspectus‘ Cot’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.
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IMAGE: AP Photo/Al Behrman