Strasburg Signs
After nearly a year of hoopla surrounding just how large of a signing bonus Stephen Strasburg would command, we finally got the answer last night – $7.5 million in up front signing money and $7.5 million in guaranteed salaries from 2010 to 2012 (along with the pro-rated league minimum for what’s left of 2009), bringing the total package to just over $15 million. This is the largest contract ever given to a player signed through the draft, breaking Mark Prior‘s record of $10.5 million from the 2001 draft.
However, after all the hoopla, the deal isn’t that much different than what Prior got, once you adjust for present value. The annual inflation since Prior signed has been about 2.4%, so adjusting Prior’s deal to present day dollars would put his original contract at about $12.7 million. Strasburg’s $15 million in guarantee is “only” an 18% premium over the adjusted value of Prior’s deal.
Now, beating a record by 18% isn’t bad, and of course Strasburg would have been a bit nutty to walk away from that kind of money as a 20-year-old pitcher. But, really, after all the talk of shattering previous draft records – 18% over Prior’s deal was the best Scott Boras could do? Maybe he’s lost a step.
Anyway, congratulations to the Nationals organization for getting the deal done. You have a franchise player. Now, the question is what to do with him.
Because of the way the deal is structured, Strasburg is only under contract through 2012, and then will have his three arbitration years before he qualifies for free agency. If the Nationals stick him in the major league rotation next spring, they’ll control him through 2015. Despite the strong fan interest in seeing him, however, there are several compelling reasons to let him begin 2010 in the minors.
For one, there’s the issue of workload. In his two years of starting for San Diego State, he threw 97 and 109 innings respectively. Given the significant potential value he holds to their long term future, Washington has every reason to be cautious with Strasburg next year, and holding him under 150 innings is probably in everyone’s best interests. That’s very hard to do if he starts the year in the big league rotation.
Secondly, there’s still the transition to professional baseball that needs to be made. His stuff is overwhelming, but he’s still going to have to learn how to pitch on four days rest, and how to respond if he isn’t hitting 100 with the fastball every time out. Working on pitching without his best stuff will be a far easier experience if he isn’t being saddled with the weight of an entire fan base watching.
And, yes, there’s the free agency issue. The Nationals could add an extra year of club control by holding him down for approximately three weeks next season. While I’m not a fan of using that as a decision making tool in most cases, when it comes to a kid straight out of college, there are significantly less ethical issues here than with the J.J. Hardy case, for instance.
For a variety of reasons, it makes sense for Strasburg to begin 2010 in the minor leagues. Washington fans, I’m sure you want to see this kid in D.C. as soon as possible, but I hope you’re willing to wait until May of next year for his big debut.
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There is absolutely no reason whatsoever for the Nats to give Strasburg a spot in their MLB rotation to start next year. There is every reason to put him in AA or AAA to start off. The Nats will not be competitive next year but they very well might be in 2015 so they’re gonna want to control him as long as possible. If I were a Nats fan (I’m not, I’m a Phillies guy), I would have no issue whatsoever with him being in the minors for a while. If Strasburg is smart, he’d probably want to start off in the minors too as it will be a huge adjustment from college ball.
The Nats are better and closer than you think. Once the rookie pitchers not named Strasburg improve for a year our two, then they will contend. I am calling 2011, but 2010 would only shock me a little. Seriously, I watch every game they play and the current team is nothing like the team in April and May. The Pirates did alot to improve the team by taking Millage and Hanrahan away. They were the worst players on the team by far. In August no team has won more than the Nats. Yep the best team in the game this month. They are better than you think, so do not count on them being losers for very long!
It goes without saying that they’ll start him off in the minors. However, if he is good enough to start in MLB then why would you waste his bullets at AA or AAA? Being competitive has very little to do with MLB franchises nowadays. They want to put more fannies in the seats and a potentially dominant pitcher like Strasburg will certainly do that. He will also make them more competitive if he lives up to the hype.
Scott Boras wins again. I read that mid-day yesterday the Nationals were at $12.5 million, but I guess they panicked late and caved. Boras just waited them out.
Let’s see. Straburg in 2009. Bryce Harper, a.k.a baseball’s LeBron, in 2010. The Nationals are making a nice, though expensive, little haul for themselves. The Nationals just need to start losing games again. They are only 3 games better than the Royals right now. Shouldn’t be a problem…
Karl Moats
Writer, FantasySportsAtLunch.com
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Karl,
I completely disagree that scott boras won again. I realize that his 50 million dollar goal was just silly, but most baseball people figured that he would sign in the 20-25 million range. So not only was his deal over 1/3 less than what boras had originally sought, it was also 10 or so million shy of what most baseball insiders assumed the contract would be. Thats a huge win for the nats, not Boras.
How about the idea of the Nats starting Strasburg off in the bullpen to ease him into the big leagues, and then phasing him into the rotation to control his innings?
I don’t think that starting him in the minors buys them an extra year of arbitration, does it? It’s a major league contract if I’m not mistaken. He’s on the clock no matter where he starts, right? Please correct me if I’m wrong.
No matter the contract, service time is only accrued when you’re on the 25-man roster. Having an MLB contract just means he’s on the 40-man roster.
how does coming out of college make service time manipulation any less ethically dubious?
I personally do not think it is ethically dubious. The rules are the rules, and small market teams have to use them the best they can. But, I am more concerned with lower ticket prices than players salaries.
I agree with big baby. I don’t see why it’s okay to play the service time game with Strasburg but not with Hardy. If I was a GM, I would play the game as much as my fan base would let me, with a seasoned veteran or a recent draftee.
If one assumes that ‘service time manipulation’ can be defined as keeping a player in the minors or sending a player back to the minors when such a move is not merited by the player’s performance and/or health concerns, then why the hell would it matter if the player is right out of college or a 5 year veteran?
It seems to me that there is every reason to send strasberg to AA next spring (maybe AAA if he is utterly dominant in the arizona fall league and you want to push him) then wait for him to prove himself at that level before promoting him. Controlling Strasberg’s innings next season can also be seen as in the player’s best interest (even if it’s not best for his short term financial interests). But if he pulls a lincecum and Ks 40+ guys in his first 20 innings at whatever minor league level he starts at, then it will be awfully hard to justify keeping him down for more than a month or two of next season. And with expectations for strasberg being what they are, I think most people will be surprised if he’s not a super-two player eligible for arbitration in 2012 (though perhaps he signed away that right as part of his deal).
There are ethically dubious things involved in the whole process. Why should teams get a guaranteed length of service time? Why should there be a draft that gives teams exclusive negotiating rights? If we want to advocate that the Nationals do whats ethically right, we should demand that they scrap Strasburg’s contract and let him become an unrestricted free agent. But if we accept the system for what it is, it would be stupid for the Nats to give up that extra year of Strasburg.
Strasburg signed a contract…. one in which he has become a very wealthy man. This contract allows for the Nationals to start him in the minor leagues and keep him off their 25 man roster for as long as they are determined to do so. There is nothing unethical about this. I am pretty sure Strasburg and his advisor were pretty well aware of this when the contract was signed.
Service time manipulation has two benefits:
1. Timing a team’s peak.
2. Holding them to restrained salaries, at the ML minimum and later through arbitration.
Does #2 still apply to Strasburg and other big bonus babies? I say no. They’re already making well above the major league average for that extra 1/2 to 2/3 year you’re squeezing out of them. And after that 3-2/3 years of service, they’ll enter the arbitration process with that same high base salary figure. And if recent years tell us anything, every subsequent year, however mediocre, will earn them significant raises to that base figure. By the 2nd or 3rd round of arbitration their salary won’t necessarily be a bargain any more. It will more likely be near the wage he, or a comparable player, would otherwise be demanding in free agency or negotiating as a contract extension.