On Monday, we looked at how the Matt Garza contract fits into the long term outlook for the team. Ultimately, the conclusion was that while Garza does present risks and the team isn’t in a prime position to contend in the NL Central, there were other factors that made it fit. Since the team isn’t planning on rebuilding but needs some significant upside, going after a risk/reward type player like Garza makes a certain amount of sense.
What we found out on Tuesday was just how much they were able to mitigate the health risk Garza presents. It was really quite creatively conceived and the team deserves a lot of credit. From the always invaluable Cot’s Baseball Contracts:
- 4 years/$50M (2014-17), plus 2018 vesting option
- signed by Milwaukee as a free agent 1/27/14
- 14-17:$12.5M annually. 18: vesting/club option
- 2018 option vests at $13M if Garza:
- 1) has 110 starts in 2014-17
- 2) has 115 innings in 2017
- 3) is not on the disabled list at end of 2017 season
- club holds $5M option for 2018 if it does not vest at $13M
- club may exercise 2018 option at $1M if Garza spends more than 130 days on the disabled list in any 183-day period from 2014 to 2017
- $2M annually is deferred without interest, to be paid in four installments each Dec. 15, 2018-21
- annual performance bonuses: $0.5M each for 30 starts, 190 IP
There are a number of outstanding features here. First off, they’re never on the hook for more than 10.5 million in guaranteed money in any year. Yes, they will owe two million each year from 2018-2021 and deferments are something of a dangerous game to play, generally. They did manage to fit these neatly into the years after the Kyle Lohse differed payments end (2018) and before the Braun payments begin (2022), though, so the total impact on payroll isn’t going to be much in a given season. Knowing they’re coming, they can start planning around the eventual payments now so that an individual year’s payroll may not have to be effected at all if they manage it that way.
Moving on to the option year, it really was constructed almost perfectly to mitigate a lot of the risk of signing someone with Garza’s injury history. 110 starts really is a pretty high bar to clear in four seasons these days. With league leading starters ending up with 33-34 starts per season, he only has about 132 to 136 chances to make starts for the Brewers over that time. So for the option to vest, he can miss between 22-26 turns in the rotation. One or two extended trips to the DL and it’s going to be difficult to reach 110.
He also has to avoid losing too many of those starts in the last year of the deal, or he won’t be able to reach the 2017 requirement of 115 innings and not being on the DL at the end of that season. If he does meet all of these requirements, 13 million dollars for an additional one year commitment is very likely to be something the Brewers would do even if not forced. So it’s not all that different from having a team option for 13 million for that year, really.
The best part comes in what happens if the option doesn’t vest, though. At that point, the team can just walk away without any further commitment (at least as has been revealed so far) or they can bring him back at something between a really good or amazingly good one year deal. If Garza just has some minor things that add up to enough time that the option doesn’t vest, they get to bring him back for five million dollars for one more year. Given how the pitching market is going, that is very likely to be a bargain.
Finally, the team got outstanding protection against him missing an extended period of time due to major injury and possible reconstructive surgery. If that happens, and he misses 130 days out of any 183 day period, then they get to bring him back on a one million dollar option in 2018. So if his elbow does give out on him and he has to miss a full season plus due to Tommy John surgery, for instance, the team gets to bring him back for a “makeup” year for pretty close to nothing, at least in terms of baseball salaries these days.
By getting that protection, the team significantly lowered the risk that injury will keep Garza from at least getting close to living up to the contract. If he completely breaks down and spends a lot of time rehabbing and not pitching at the big league level, there is at least a chance that they’ll be able to recoup some of the cost of the contract through whatever insurance policy they are able to get on the deal. That probably makes the worst case scenario just suffering an early, sharp decline in performance but still taking the field on a regular basis. Given Garza’s skill set and history, that doesn’t seem overly likely.
At the end of the day, they really protected themselves from a lot of the most likely pitfalls. Even if the ultimate chances of this being a key deal to winning that elusive World Series title are fairly low, Doug Melvin and Mark Attanasio still deserve a ton of credit for coming up with a deal like this. It almost perfectly fits their needs and mitigates quite a bit of the risk they had to take to bring Matt Garza’s upside in the fold for the next half decade or so. That’s about as good as it gets for a small market team making their largest ever free agent signing these days.