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Kershaw Avoids Arbitration With Two Year Deal

According to Dylan Hernandez, the Dodgers have avoided arbitration with Clayton Kershaw by signing him to a two year contract worth a total of $19 million. Jon Heyman notes that it will break down as $8 million in 2012 and $11 million in 2013.

Kershaw was eligible for arbitration for the first time, and had filed a request for $10 million while the Dodgers countered with an offer of $6.5 million. The two parties settled just south of the midpoint between those two figures for 2012, and then guaranteed Kershaw a 38% raise for 2013. That’s a bit of a discount over what he likely would have earned through arbitration had he followed up with another successful season, but he also disposes of some injury risk by taking the guaranteed money now. For context, both Tim Lincecum (2/23) and Cole Hamels (3/20) signed deals that paid them similar amounts when they were first-time arbitration eligible, though both were Super-Twos and were a year further away from free agency when they agreed to sell a few of their arb years.

Essentially, Kershaw offered the Dodgers the potential to save a couple of million on his 2013 salary – and avoid the never-fun arbitration hearings – in exchange for giving him a little more security in case he blows his arm out at some point this year. The Dodgers weren’t able to delay his free agency, or even buy out his final arbitration year, but they get a little bit of cost certainty for the next couple of years. If Kershaw stays healthy, he’s set himself up to get a massive extension in two years or hit free agency in three, all while getting rid of enough risk that he shouldn’t have to worry about his finances for the rest of his life.

While teams have been proactive in trying to get their young stars locked up sooner, this is probably a better path for elite young arms – establish yourself as a star, then sell off a bit of your arbitration earnings to get rid of some risk, and still set yourself up for the monster payday that comes with free agent eligibility. Don’t be surprised if more agents start pushing their young players to follow the Lincecum/Hamels/Kershaw path instead of the Matt Moore career path.