On Saturday, the Los Angeles Dodgers signed starting pitcher Zack Grienke to a six year, $147M deal. Greinke was the pre-eminent 2013 free agent and correctly parlayed the dearth of strong pitching free agent options to a contract that nets him the highest annual average value for a starting pitcher.
When prominent free agents sign record deals, there’s implications for the team and the signing of future free agents. We’ll look at some of these implications – what the signing says about the Dodgers organization, other free agents and MLB at large.
1. Zack Greinke’s Deal is Sweeter Than I Anticipated.
Last week, I predicted Greinke would leverage a weak free agent market to land a seven year, $170M deal. While his new contract provides him the highest AAV for any pitcher, I expected he’d net a seventh year. In place of the elusive seventh year, Greinke obtained an opt-out clause that allows him to shred his contract at the conclusion of the 2015 season. At the end of 2015, Greinke will be just 32 years old and TV-revenues will be flush across baseball.
The opt-out clause provides Greinke the flexibility to seek a better contract if he believes the 2015 free agent market can exceed his current deal. There’s really no downside here for Greinke; if his move to pitcher-friendly Chavez Ravine allows him the venue to improve his performance, he can seek a higher contract (likely leading the Dodgers to out-big themselves to retain his services through a new contract). If his performance declines in his early 30s, Greinke can ride his current six-year contract to conclusion in 2018.
2. The Evil Empire has moved West.
With the New York Yankees taking every step to get their player payroll under MLB’s 2014 $189M threshold, the Dodgers have become baseball’s pre-eminent mega franchise. In the past year, they’ve re-signed their own players to deals worth more than the player’s value, they’ve acquired other teams’ overpriced talent, and they’ve reset the free agent contract parameters for bullpen arms.
The Dodgers 2012 payroll commitments are now exceeding $260M, which easily exceeds the Yankees record $208M payroll in 2008 for the largest in MLB history. More shocking, their 2014 payroll commitments are already $181M, for just ten players*. Armed with the proceeds of a new regional TV-revenue deal that provides the club $240M per year, there’s no end in sight for Dodger spending. They’ve become MLB’s new bad boy and have every intention of gobbling up your favorite team’s free agents.
* The $189M does not include the $49.5M they additionally owe to Cuban prospect Yasel Puig, retired Manny Ramirez or NPL-signee Andruw Jones. Wow.
3. The Evil Empire has Set a New Standard
Here’s some pitcher comparisons:
| | 2012 FIP | 2012 WAR | 2011 FIP | 2011 WAR |
| Player A | 3.10 | 4.0 | 2.98 | 5.1 |
| Player B | 3.25 | 5.5 | 2.84 | 6.7 |
Pitcher A is Zack Greinke’s performance over the past two years. Pitcher B is new teammate Clayton Kershaw’s performance over the past two years. Both these pitchers share the same negotiating agent, Casey Close, The 24-year old will have every justification to refer to Greinke’s contract as he engages the Dodgers in contract negotiations in 2013.
4. Next Up: Anibel Sanchez.
The 2013 free agent pitching market did not offer great options beyond Zack Greinke. Roundly considered the second-best pitching option was Anibal Sanchez of the Detroit Tigers. Sanchez has been on record that he’s seeking a six year, $90M contract. Now consider this:
| | 2012 FIP | 2012 WAR | 2011 FIP | 2011 WAR |
| Player A | 3.10 | 4.0 | 2.98 | 5.1 |
| Player B | 3.54 | 3.8 | 3.35 | 3.8 |
Yes, Pitcher A is still Zack Greinke, but Pitcher B is Sanchez. He’s not a vastly different pitcher than Greinke, he’s a year younger, and he’s seeking a contract worth roughly 2/3 the value of Greinke’s new deal. While it’s hard to imagine any six-year pitcher deal representing a bargain, Sanchez is a consistent performer that looks like a steal relative to Greinke.
5. The Rangers got a Little More Uncomfortable
The Texas Rangers were roundly considered to be the runners-up in the Greinke sweepstakes. They’re a club built to win-now, with cash-on-hand, a weak pitching staff and top-flight prospects. Losing out on Greinke and the subsequent trade of their prime trade target Jamie Shields forces President Nolan Ryan and general manager Jon Daniels to re-up their trade negotiations for Mets’ RA Dickey. Speculation has the Mets asking for Rangers’ prospect Mike Olt and more.
The Rangers are in need of an ace, the risk here being that their inability to secure pitching could derails a club that is pegged squarely at their peak window. I suspect Daniels will either pay the Mets asking price, or re-engage the pitching-rich Arizona Diamondbacks in a monster trade that would center on SS Juriskson Profar and Mike Olt in return for Diamondbacks pitching and Justin Upton.