The Next Crop of Free Agent Pitchers

While a lot of the current focus is on the remaining starting pitchers from this free agent class and where they will end up, we are getting close to the point where the focus starts to shift to the players who are going to hit free agency after next season. Generally, spring training is the time of the contract extension, and for players under team control for only one more season, this is often the last time they’ll negotiate an extension before testing the free agent market. Last year, we saw guys like Martin Prado and Carlos Gomez sign new contracts during this stretch of the off-season, and the year before, we saw Matt Cain, Ryan Zimmerman, and Howie Kendrick sign deals that kept them from playing out their walk year. And of course, Clayton Kershaw just reset the bar on long term extensions for players with only one year of team control remaining.

With the recent trend of teams ponying up nearly free agent prices to keep players from testing the market, we should expect that Kershaw won’t be the last pitcher to choose guaranteed security now rather than playing out the string and opening himself up to a bidding war next winter. So, today, let’s take a look at the 2013 lines from the five big remaining starters who are either going to land an extension in the next few months or hit free agency next winter.

Name	IP	ERA-	FIP-	xFIP-	WAR	RA9-WAR
Max Scherzer	214.1	71	68	80	6.4	6.2
James Shields	228.2	77	86	94	4.5	6.0
Justin Masterson	193.0	90	88	84	3.4	3.8
Homer Bailey	209.0	92	87	89	3.7	3.5
Jon Lester	213.1	90	87	98	4.3	3.9

Scherzer is the big name, and probably also the most likely to get an extension. The Prince Fielder trade reduced the Tigers long term financial obligations, while the Doug Fister trade suggested that they must think they can get Scherzer signed, because if they cleared all that money off their books and couldn’t get Scherzer to take it, he probably would have been the one getting moved, not the reasonably priced Fister.

But while Scherzer is the biggest name of the bunch, he’s certainly not the only quality arm that could hit the open market next winter, and the gap between their performances is probably smaller than the gap between their reputations. Homer Bailey is certainly not as good as Scherzer, but he’s a quality pitcher in his own right, so this isn’t Scherzer and the seven dwarves. Scherzer has the largest potential extension price of the group, but I bet all five are probably shooting for over $100 million in guaranteed dollars.

And pretty much all of the recent comparisons point to them each landing nine figure deals. Even setting aside Kershaw’s $215 million contract — given that none of these guys are as good or as young as the Dodgers ace — the price of buying out four or five free agent years of a pitcher of this quality has consistently been at or above $100 million. Matt Cain got $112 million for five free agent years right before the start of the 2012 season, and he would fit right into the middle of this group of starters. Adam Wainwright got “only” $98 million for five free agent years, but he also had the most extensive injury history of the group, and probably gave the Cardinals a big discount over his actual market value.

Cole Hamels got $144 million for six years, though that was at mid-season, so he was a little closer to free agency. Felix Hernandez and Justin Verlander got $135 million and $140 million for five free agent years respectively, though they were a year further from free agency. Still, the market has pretty clearly set the price of pitcher extensions at between $20 and $28 million per year for five or six free agent seasons, and they often just take the first year of the already agreed to contract and tack it onto the deal to allow the agent to promote a larger total number than just announcing the new money as a separate extension.

Scherzer already settled with the Tigers for $15 million. The Red Sox exercised Lester’s team option for $13 million, and the Royals did the same with Shields’ $12 million option. For Bailey and Masterson, their 2014 salaries are likely to come in around $10 million, which is the midpoint between what they asked for in arbitration and what they were offered by the Reds and Indians. So, in each case, the 2014 money is pretty similar, and won’t be a big factor in determining the overall size of the extension.

Let’s assume that each pitcher is willing to take the current market price for wins in exchange for avoiding free agency — essentially trading in one year’s worth of inflation for their one year risk of injury or performance decline — and will be looking to sell five of their free agent seasons, starting with 2015, so each pitcher would sign a six year contract that includes their predetermined 2014 payout. What would the deal for each pitcher look like?

Well, let’s start by looking at their projections, using both ZIPS and Steamer’s forecasts for next year.

Name	SteamerIP	SteamerWAR	ZipsIP	ZipsWAR	Average IP	2014 WAR
Max Scherzer	192	4.2	194	4.8	193	4.5
James Shields	192	3.7	212	4.2	202	4.0
Jon Lester	192	3.7	198	3.8	195	3.8
Homer Bailey	192	2.6	192	3.5	192	3.1
Justin Masterson	192	3.0	196	2.4	194	2.7

Scherzer, Shields, and Lester have a good amount of separation between them and Bailey or Masterson, so there’s essentially two tiers here, and their extensions will likely reflect that, especially considering those two play for mid-revenue Ohio teams and aren’t as likely to pony up as Detroit or Boston are for their own aces. Bailey and Masterson might have to settle for selling three or four free agent years at the lower end of the extension range, which would put their total prices at closer to 4/$70M or 5/$90M when their 2014 figures were included.

Lester has already expressed a willingness to take a less than market value deal to stay in Boston, so 5/$90M might be a good target for him as well. Adding in the 2014 guarantee, that would put him at 6/$103M, and would be the kind of price that would likely make Boston interested in pursuing a deal now versus letting the contract play out.

That leaves Shields and Scherzer, who should both be able to sell five or maybe even six free agent years, and probably close to the $25 million AAV that many of the better pitchers have attained recently. That would make a five year extension for Shields look something like 6/$137 once his current year was included, while a six year extension for Scherzer would push the total number to around around 7/$165M.

The uptick in opt-out clauses might shrink these guarantees a bit if any of the players trade a guaranteed year at the end in exchange for the ability to become a free agent again sooner, but given the age of each pitcher, I’d imagine that most of these pitchers will probably aim for contract length over a second bite at the free agent apple. It’s tough to see Kansas City ponying up $25 million per year to keep James Shields, and it seems unlikely that Cleveland will keep Justin Masterson from free agency, but I wouldn’t be shocked if the other three ended up signing long term deals in the next couple of months, and perhaps even sooner.