The Absurd Price that Clayton Kershaw is Actually Worth

Over the last few years, a common thought experiment among nerdy baseball fans has been to imagine what Mike Trout would sign for if he was a free agent. He was the best player in baseball before he could legally drink, and if the market had to price a player of his ability and youth, $400 million wouldn’t be out of the question. You could even make a case for $500 million if the contract was long enough. But it was all just fun mental gymnastics, a hypothetical that didn’t exist in reality.

However, Mike Trout isn’t the only historically special player currently dominating the big leagues. Clayton Kershaw has also put up numbers that few his age have ever matched, and since he’s only a year from reaching free agent status, we’re about to find out just what the market will pay for a young superstar on a Hall of Fame track.

For reference, here is the full list of pitchers in the last 50 years who could reasonably be compared to Kershaw through this same point in their careers.

Name IP ERA- FIP- WAR RA9-WAR WAR/200 RA9/200
Roger Clemens 1,029 71 63 33 30 6 6
Clayton Kershaw 1,177 68 75 28 34 5 6
Tom Seaver 1,092 72 84 25 32 5 6
Kevin Appier 837 71 76 21 24 5 6
Pedro Martinez 810 74 73 21 21 5 5
Bert Blyleven 1,745 76 70 46 43 5 5
Bret Saberhagen 1,262 79 76 32 31 5 5

That’s every pitcher since 1964 who has thrown at least 800 innings through age-25 and averaged +5 WAR (rounded up, so it’s really +4.6 or higher) per full season, both by FIP and runs allowed. Only six other pitchers in 50 years have done this; two of them are in the Hall of Fame, one will be next year, and one would be if it weren’t for his links to PED usage. When 2/3 of your performance peers ended up as all time greats, you’re in okay company. The median performance of those other six from their age-26 season through the end of their careers: another 2,500 innings, +61 WAR by FIP, and +60 WAR by runs allowed.

Name IP ERA- FIP- WAR RA9-WAR WAR/200 RA9/200
Pedro Martinez 1,915 64 63 65 65 7 7
Tom Seaver 3,690 81 85 73 88 4 5
Roger Clemens 3,885 70 72 107 112 6 6
Bret Saberhagen 1,233 82 81 27 28 4 5
Bert Blyleven 3,061 90 88 56 55 4 4
Kevin Appier 1,733 88 90 32 34 4 4
Median 2,488 82 83 61 60 4 5

The guys who got worse regressed all the way to Perennial All-Star, averaging about +4 WAR per season after their historic start. Appier and Saberhagen are the health risk examples — sorry, Royals fans — while Blyleven is the performance regression risk, as he went from being otherworldly to just very good. But again, these are the downside examples, and they’re still really pretty great. Appier was an ace for another four years before injuries began to eat away at him, and Saberhagen was regularly dominant when he was healthy enough to take the mound. It’s important to remember that when we talk about health risks for pitchers, this is the kind of health risk we’re most often talking about. The career ending injuries that drive guys like Brandon Webb out of the sport at an early age are not normal.

Yes, pitchers are risky, but Kershaw can fall a long way and still be tremendously valuable. And if he stays healthy for the better part of the next decade, he’ll probably go down as the best pitcher of his generation. If it’s an exaggeration to say that Clayton Kershaw is the Mike Trout of pitchers, it isn’t much of one. Justin Verlander is awesome. Felix Hernandez is special. Stephen Strasburg and Jose Fernandez and Chris Sale all look like they could be remarkable. None of them are Clayton Kershaw, and that’s why the Dodgers are going to open up the vault to keep him in Los Angeles.

So, what’s the price going to be? I think we can basically rule out anything less than $200 million, as Kershaw isn’t going to settle for a contract anywhere near what the Tigers and Mariners gave to Verlander and Hernandez last spring. Not only is Kershaw both younger and better than both, but he’s also only one year away from free agency as opposed to two years away. The 7/$175M template isn’t going to get it done here.

On the other hand, I don’t think we’re going to see either the Dodgers or Kershaw push the total value upwards by going for a 10 year deal at a deflated AAV, as has become the norm for the big contracts in recent years. From Kershaw’s perspective, a seven or eight year deal actually sets him up for a potential second massive contract in a way that a 10 year deal would not, as he could potentially hit free agency again in his early-30s instead of his mid-30s. And while the Dodgers have been aggressive in spending money under their current ownership group, their spending has come in salary, not in years, as their longest commitment to any player has been six years. While many teams have lured players by borrowing from their 2021 budgets, the Dodgers have mostly stuck to five and six year contracts at heightened annual average values.

So, let’s say that both sides agree that they want a seven year contract, which would include the 2014 season that the Dodgers already control at an expected arbitration price of around $20 million. They’d essentially be buying six free agent years, and since it wouldn’t be as long of a contract as many of the other free agent signings we’ve seen lately, the annual salary would have to be higher. Given Kershaw’s performance level and the shorter term, I think you’d have to expect an annual average value of at least $30 million, and that’s probably too light.

Looking at the median performance of the six Kershaw comparisons identified above, we see that the median performance of that group from age-26 through age-32 was +35 WAR (both by FIP and RA9), for an average of +5 WAR per season. Here’s an example of what that kind of forecast would look like for Kershaw, given what we think we know about the market right now:

Year WAR $/WAR Value
2014 5.5 $6.0 $33.0
2015 5.5 $6.3 $34.7
2016 5.0 $6.6 $33.1
2017 5.0 $6.9 $34.7
2018 5.0 $7.3 $36.5
2019 4.5 $7.7 $34.5
2020 4.5 $8.0 $36.2
Total 35.0   $242.6

Based on this kind of expected performance, Kershaw’s market value on a seven year deal would put him around $243 million over seven years. Of course, the Dodgers already control 2014 for $20 million, so what we really care about is the market value of those additional six years, which comes out to $210 milion. If both sides agreed to just give Kershaw market value price a year before he reached free agency in exchange for not requiring a longer commitment, and then they just priced in the $20 million that Kershaw was going to get for 2014 if they didn’t sign this deal, then the total value would come in around 7/$230M, or about $33 million per year.

And that seems about right to me. It makes him the highest paid player in baseball history in terms of AAV, and the highest paid pitcher of all time by a mile. It gives him clear separation over the extensions signed by Hernandez and Verlander last spring, and it still lets him hit free agency again after his age-32 season, when he could potentially be in line for another $200+ million deal.

The more years that get tacked on, the lower the Dodgers would want the AAV to be in order to even out the risk, so if we’re looking at 7/$230M as a decent price for this term, maybe an equivalent longer deal would be 8/$250M, or right around the price that has been rumored over the last 24 hours. I think something in this range is probably what we should expect, and what Kershaw is likely to be worth.

Crazy long deals for pitchers have historically not worked out well, but historically, they haven’t been given to pitchers that are this good or this young. Kershaw’s contract is going to break all kinds of records and probably still not be insane. This is the kind of long term, crazy money contract that could easily work out for both sides.

And about a half hour after publication, news breaks that the Dodgers have signed Kershaw to a seven year, $215 million extension that contains a player opt-out after year five. So, essentially, Kershaw traded a few million in AAV to get the chance to become a free agent after age-30 instead of age-32. Barring a severe injury, we should expect he’ll opt out.

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Dave is the Managing Editor of FanGraphs.

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