This is going to be more of a quick take than any kind of long rambling analysis, as I have done too many of those today already, but hey, more news. This one’s not a Fielder-for-Kinsler trade, but the Royals have filled their last rotation spot by signing Jason Vargas to a four year, $32 million contract. The deal was first reported by Yahoo’s Jeff Passan.
I’m assuming the initial reaction of many is going to be the same as my initial reaction when I heard they had given Jason Vargas a four year deal; that’s nutty. Jason Vargas is a perfectly serviceable big league starter, but you don’t usually give four year deals to role players. Vargas isn’t any kind of front-of-the-rotation ace, he has moderate upside at best, and this deal covers his age 31-34 seasons, so the four year term is kind of odd. It’s entirely justifiable to say that you wouldn’t want to guarantee money to a 34-year-old Jason Vargas, given that his stuff is already marginal and he hasn’t always been the picture of health.
But there’s two parts of every contract, and the years are only half the story. You would happily give Jason Vargas a 20 year contract so long as the price was only for $1 million per season; there are different prices which justify different contract lengths. And so while we generally think of four year deals as being for significant amounts of money, this one is going to cost them just $8 million per season, and thus it has to viewed as an exchange of an extra year in exchange for a lower annual salary. And it’s a trade off that’s maybe worth making for the Royals.
Vargas projects as basically the epitome of a league average hurler in 2014. Steamer has him at +2.0 WAR over 182 innings, pretty much continuing the trend of what he’s done over the last four seasons. He throws strikes, gets a slightly below average amount of strikeouts, and usually posts lower than average rates of hits on balls in play. Whether you’re judging by ERA or FIP or some combination of the two, Vargas is going to rate as roughly average, or maybe just a tick below average depending on how much weight you put on FIP relative to ERA.
League average starters don’t sign for $8 million per year anymore. Tim Hudson, who Steamer projects for +1.6 WAR over 185 innings for the Giants, just got $11.5 million per year from the Giants. Tim Lincecum, at +2.0 WAR over 191 innings, got $35 million over two years. Sure, these pitchers have better track records than Vargas, and Lincecum has the lure of upside, but these prices are significantly higher than what Vargas got. Vargas gave the Royals a discount in salary in order to get the extra fourth year.
If this deal was 3/27, would anyone really be freaking out? That’s basically what the Royals gave Jeremy Guthrie last year, except Vargas is better and younger than Guthrie. And the league has more money to spend this winter than it did last winter.
There’s a good chance that Vargas, in year four of this deal, is going to be totally worthless, a replacement level scrub who fills a low leverage long relief role or something. But $32 million is paying for something like +5 WAR over the next four years, and even if we just project him for +2.0/+1.5/+1.0/+0.5, then we’d expect him to produce exactly +5 WAR over the life of this deal. This isn’t a gross overpay. It’s just transferring some of the cost of signing an average pitcher from 2014 to 2017. For a team with moderate financial resources trying to make a run for the playoffs, that’s not the worst idea ever.
This can’t be the Royals big off-season move. Vargas fills a hole with the expectation of reasonable performance, but he doesn’t really make them better than they were, especially since he’s replacing Ervin Santana. They’re going to have to find other ways to upgrade if they want to become a contender. But this is also a decent enough contract for a decent enough pitcher to make sure that they don’t throw away their season by handing a rotation spot to a total scrub. Jason Vargas might not raise the Royals ceiling all that much, but he does raise their floor. And there’s value in that kind of transaction.
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