Kyle Lohse and Other Pillow Contract Players

Players choose the services of Scott Boras for a simple reason. The simplest reason, even: he gets money.

But not even Boras can truly command the invisible hand of the market. See Kyle Lohse. Despite many seeing him as one of the best pitchers available in this year’s free agent class, Lohse remains unsigned into march — a far cry from the four-year, $40 million deal or higher many saw him attaining.

Of course, for all of Boras’s success, Lohse isn’t his first high-profile client whose market has dropped out from under him. The safe play given the age of most of these players (over 30) and MLB’s guaranteed contract system would be to take a multi-year contract at a depressed average annual value. Quite often, however, Boras has eschewed the long term deal for the “pillow contract,” a one-year contract so-called because it lets the player land softly from their bottomed-out market and get up and try again next season.

Let’s take a look at some examples.

Pillow Contract Players

Edwin Jackson

The Lohse-Jackson comparison can be educational in two ways. First, Jackson and Lohse were considered to be on a somewhat similar level entering free agency this season. Jackson looked better from a fielding independent perspective, but Lohse’s RA and ERA over the past two seasons were the best of the free agent class (meaning better than Zack Greinke and Brandon McCarthy), and one figured that distinction would be worth something.

Instead, Lohse is getting the treatment Jackson received after the 2011 season. The five-year, $50 million contract Jackson was looking for never materialized, and instead of taking a three-year deal worth around $30 million from Pittsburgh, Jackson took the pillow contract at $11 million with Washington. The situation is a bit different for Jackson — he was 28 at the time of the deal, whereas Lohse is already 34 — but it worked out and more, as he earned a four-year, $52 million contract with the Cubs this offseason. Jackson dropped Boras before signing the contract, but the pillow contract strategy still worked for the player.

Adrian Beltre

The pillow contract Beltre took after his disappointing (at least with the bat) stint in Seattle was brilliant: a one-year, $9 million deal with a $5 million player option. Essentially, it was a $14 million deal for Beltre, where he could forfeit the option for the clearly better prospects if he played well. He parlayed a .321/.365/.553 year in Boston into a five-year, $80 million contract with Texas — the best illustration of the pillow contract going right.

Ryan Madson

Madson reportedly had a four-year, $44 million contract in place with the Phillies last offseason. It fell apart, and with few teams looking for a closer that offseason, Madson was left with a one-year, $8.5 million deal with Cincinnati. Madson didn’t even pitch in 2012 after undergoing Tommy John surgery and now it appears he won’t be ready for opening day 2013 with Anaheim. The Angels paid just $3.25 million for the 32-year-old Madson despite the righty racking up over 1.0 WAR each year from 2008-2011 using either FIP or runs allowed.

Here’s one of the obvious perils Lohse faces with a pillow contract — at 34, injury risk becomes much more real than for a 28-year-old Edwin Jackson, for example. Lohse spent 84 days on the DL in 2010 after undergoing surgery for compartment syndrome in his shoulder and spent 54 days on the DL in 2009 between a groin strain and a forearm strain; he pitched under 120 innings in both seasons.

Francisco Rodriguez

Rodriguez made the somewhat surprising decision to accept arbitration from Milwaukee after the 2011 season. The decision earned him $8 million from the Brewers, but K-Rod had his worst season since breaking through in 2002. The 30-year-old (remarkably; remember, he was only 20 when he debuted in Anaheim) allowed a 4.38 ERA (111 ERA-) and 3.83 FIP (98 FIP-). Combine last year’s incompetency with his clubhouse and off-the-field issues, and it should be no surprise Rodriguez remains a free agent this season. Could he have gotten a two-year, $10-12 million contract had he tested the waters? Impossible to say for sure, but looking at the contracts relievers have picked up over the past two years, it seems like a distinct possibility — he posted a 71 ERA- and 72 FIP- in 2011 between the Brewers and Mets, a very solid year.

Eric Gagne

Gagne was another failed Brewer reliever. Milwaukee signed him to a one-year, $10 million dollar deal for a comeback attempt in 2008, but “Game Over” ended up referring to the wrong squad. Gagne blew seven saves against 10 conversions and seven holds as he finished with a brutal 5.44 ERA (128 ERA-) and 6.13 FIP (144 FIP-); he served up 11 home runs in just 50 innings. The Brewers threw another $1.5 million at him in 2009, but he never pitched in the majors again.

Kevin Millwood

The free agent landscape was a bit different in the mid-2000s, but Millwood arguably signed two pillow contracts. In 2003, he posted a 4.01 ERA (96 ERA-) in 35 starts. in 2004, he accepted arbitration from the Phillies after failing to find a long-term suitor, resulting in a one-year, $11 million deal. The gamble failed, as he dropped off in 2004 — he recorded a 4.85 ERA (110 ERA-) despite a 3.80 FIP (86 FIP-), and he was limited to 25 starts by a sprained right elbow.

He got a second chance with a one-year, $7 million contract from Cleveland the next season, and he capitalized in a big way. His 3.73 FIP was actually worse given the park (88 FIP-) but he posted a tremendous 2.86 ERA (67 ERA-), his second-best season behind his breakout 1999 campaign, when he posted a 2.68 ERA (59 ERA-) in 228 innings. The Rangers gave him a five-year, $60 million contract prior to the 2006 season — a deal in which Millwood essentially provided market value on non-playoff teams.

Conclusions?

The results here were mixed — the two reliever pillow contracts failed, and I would argue Millwood’s first attempt failed as well. Millwood’s second attempt as well as Jackson and Beltre saw the pillow contract work to perfection — between the pillow contract itself and the subsequent attempt, the players pulled in much more than they would have earned with a long-term contract the first year and perhaps more even than what they initially hoped for.

This mixed nature, in my opinion, is unsurprising. This strategy is specifically enticing to players of their nature — and of Lohse’s nature — because they offer wildly varying ceilings and floors. Jackson has always been viewed as a risky talent. Beltre was excellent as a younger player but his bat failed to show up in Seattle. Rodriguez and Gagne were dominant closers at one point but slipped in their late 20s. Millwood was an injury risk.

Lohse fits in perfectly with this group. His track record the past two seasons is fantastic, but he was terrible and injured in 2009 and 2010. At 34, there are questions about decline and further injury.

For Boras Corporation, the pillow contract seems like an obvious strategy — they have a large enough portfolio of clients to handle the risk of busting and the payoff for success is large. I would imagine the decision is tougher for the player. How confident are they in their ability to stay healthy? Have they kept their finances in order? Much of the decision likely comes down to the individual situation. But Lohse’s maximum long-term payday is likely dropping as the calendar crawls towards opening day, especially given the restrictive qualifying offer hounding him. Given the success of other starting pitchers employing the pillow contract strategy under Boras, my expectation is he eventually finds a one-year deal and attempts to try the market again next year.



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HawkeyeCub
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HawkeyeCub
3 years 2 months ago

The lesson here seems to be that, if you can get a guy on a pillow contract, it has a strong chance of working out for your team.

Paul Wilson
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Paul Wilson
3 years 2 months ago

When in doubt, accept the qualifying offer.

Bo
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Bo
3 years 2 months ago

It’s worth pointing out that many teams would have to give up a first round draft pick to sign him. This is a major factor in the slow market for him.

Greg Simons
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Greg Simons
3 years 2 months ago

Already covered. As the article says, “given the restrictive qualifying offer hounding him.”

ttnorm
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ttnorm
3 years 2 months ago

But the historical conclusion that is drawn (1 year pillow = good) is based on the old CBA rules. Who is going to want to give up a 1st round pick in 2013 for 1 year of Lohse?

Jay29
Member
Jay29
3 years 2 months ago

A win-now team with a late-1st-round pick who feels they’re a mid-rotation upgrade away from a serious run at the World Series. Not sure what team fits that description, but given the historical success rate of late 1st-rounders, I imagine it’d be a decent gamble for a handful of teams.

TKDC
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TKDC
3 years 2 months ago

Also teams that have already given up their first rounder; late second rounders are worth very little. The Braves, Yankees, Angels, and Indians have all already lost their first pick (first two for the Indians). What’s a late second round pick worth, $1 million tops???

2nd Edition
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2nd Edition
3 years 2 months ago

During Lohse’s time with the Cardinals, he was very good when healthy and very bad when injured. Which is to say he was very good. Today’s problems are the result of 2 things: age and the Duncan effect – pitchers always pitch better for the Cardinals than after they leave.

Antonio bananas
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Antonio bananas
3 years 2 months ago

Is this actually true? I read the article posted here, but it seems to me it’d have more to do with age than who they were playing for.

deadpool
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deadpool
3 years 2 months ago

Especially since Duncan wasn’t there last season. If the Duncan effect turned Lohse around, then apparently Duncan doesn’t actually have to be there for it to work.

Sparkles Peterson
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Sparkles Peterson
3 years 2 months ago

Well, Duncan worked with Lohse for a few years, the Cardinals’ new pitching coach learned his craft under Duncan, and I’m assuming all of Duncan’s extensive notes are still around. I think it’s reasonable to think some teams are still wary of the Duncan effect.

Aaron (UK)
Member
Aaron (UK)
3 years 2 months ago

The big issue with a pillow contract at Lohse’s age is that he’ll surely be in the same boat again next year, should he pitch well.

Maybe he should negotiate either a “must-trade” clause, as Dave Cameron has mooted before, or a “no-QO” clause (not permitted, but possibly doable surreptitiously?)

vivalajeter
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vivalajeter
3 years 2 months ago

Sure, that would be great for him if he can negotiate that – but given his lack of leverage, how would that be possible? Teams don’t seem to want to give up a first round pick to sign him for just one year – so they surely won’t want to give up a first round pick and give up the potential to give him a qualifying offer. The only way I can see that happening is if he signs for a very low base, but I don’t think that makes much sense for him.

Sparkles Peterson
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Sparkles Peterson
3 years 2 months ago

It’s certainly strange that he’s looking for a pillow contract after a season in which he was a Cy Young contender (And in fact led his league in WPA), but I do suspect there are teams who would value him more after a league-average season in the AL than after a fantastic year with the Cardinals.

Much as I hate to root for Boras, I hope Lohse strikes a big blow against the Dave Duncan effect this season.

TKDC
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TKDC
3 years 2 months ago

He could just sign a deal with a stingy team. The Marlins or Rays are not risking him taking them up on 1/$14 million in 2014, regardless of how his 2013 season goes.

DD
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DD
3 years 2 months ago

Read this recently, and it makes some sense: What if the best Major League contract offer at this point is, say, an $8 mil 1 year deal, but he is offered a minor league deal worth $13 mil if he “makes” the big league club? The minor league deal would have been proposed for the obvious reason of avoiding the forfeited pick, but if that’s his most lucrative offer, why shouldn’t he take it? This needs to happen to force MLB’s hand to change the process.

MakeitRayn
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MakeitRayn
3 years 2 months ago

In the CBA is says you can’t do this to avoid the draft penalty.

DD
Guest
DD
3 years 2 months ago

I know you can’t, but the point is it is not in the best interests of the player to take the lesser deal, and the union would have a canniption (sp).

DD
Guest
DD
3 years 2 months ago

Another thing – if he doesn’t sign until after the season starts, whatever team signs him can’t offer him a qualifying offer can they, since he didn’t spend the whole year with the club?

DD
Guest
DD
3 years 2 months ago

Here’s the applicable verbage per the CBA, Article XX:B-3 –

(3) Rights of Former Club
The following provision shall apply only to each Player who
becomes a free agent under this Section B after having been continuously
under reserve (without interruption) to the same Club (either
at the Major or Minor League level) since Opening Day of the
recently completed championship season (“Qualified Free Agent”).

Cidron
Member
Cidron
3 years 2 months ago

First round draft pick for a One year Pillow contract. I just don’t see it happening. First rounders are hoped to be aces, stars, studs, etc under team control for a number of years, at affordable prices. Or, to put it another way –> 1yr pillow OR multiyear, developing star <– Not even a hard choice. Go with the star every time.

Yes, I know that first round does not guarantee star. BUT, Each and every team is expecting it, and weighing the first round pick as such.

Sparkles Peterson
Guest
Sparkles Peterson
3 years 2 months ago

There is still at least one GM in Major League Baseball who values first round picks so highly that he gladly forfeited them for such aces, stars, and studs as Michael Tucker.

Todd
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Todd
3 years 2 months ago

You forgot another pillow contract player- Kyle Lohse. He signed one with the Cardinals in spring ’08, then signed a 4-year contract before ’09.

gnomez
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gnomez
3 years 2 months ago

Exactly – he didn’t sign until March 14 in 2008.

chris
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chris
3 years 2 months ago

If you think about it, the “restrictive qualifying offer hounding him” is probably the very reason he isn’t getting the pillow contract offer. The difference between him and the rest of the pillow signees was that the signing team did not have to give up a pick to get the player, but could hope that even in a resurgent year where they couldn’t afford to resign the player, they would get a compensatory pick. In this case, even if Lohse matches last years performance the sandwich pick received after he leaves in free agency would not rank as high as the 1st rounder surrendered, unless he signs with a team that already gave up a 1st rounder to sign somebody else. Therefore, it stands to reason he’s likely only to sign with the Angels/Indians/Rangers, as they are the only teams that could stand to gain draft position from a solid 1 year performance from Lohse, while also benefiting in the now on the MLB team (as all 3 should view themselves as contenders, Indian’s actual chances at doing so notwithstanding).

TKDC
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TKDC
3 years 2 months ago

The Rangers still have their first pick.

WWMcClyde
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WWMcClyde
3 years 2 months ago

Texas has the 24th pick, plus (I think) the 31st pick for losing Hamilton.

RotyBird
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RotyBird
3 years 2 months ago

Who in their right mind would give up a shot at a potential future star to take a chance on a 34 year old Kyle Lohse at $10 M plus per season? Answer: nobody. The guy has a career year and cannot even get signed. But, hey, give him a pillow contract and maybe he delivers again in a contract year – that’s how the Cardinals got on the hook for him in the first place, at a time when that money could have been directed elsewhere (like wrapping Pujols up to an 8 or 9 year extension three years ago). Even after losing a front of the rotation guy in Carp and getting two good years of service, the Cards have NO interest in bringing Lohse back.

alashieve
Member
alashieve
3 years 2 months ago

Kyle Lohse got greedy. He should have taken the qualifying offer. Now he could end up getting nothing. I love seeing greedy players get bit in the backside.

WonkoTheSane
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WonkoTheSane
3 years 2 months ago

Millwood accepted arbitration with the Braves, not the Phillies. The Braves then traded him to the Phillies for Johnny Estrada.

NATS Fan
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NATS Fan
3 years 2 months ago

Cleveland should try and find a way to sign him to a pillow contract at a reduced rate. They would only lose a third round pick. Lohse would be trade able at the all star break if Cleveland is out of it. I bet they would get much more than the value of a third round draft pick in return. OR Cleveland should be part of a work around trade. They could sign him and trade him for a second round draft pick equivalent value package. The Indians seem to be really missing out on an opportunity here.

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