Carlos Martinez Gets Paid, Leaves Money on Table

The St. Louis Cardinals lack stars. Sure, Yadier Molina and Adam Wainwright are well known and remain solid even as they age. Sure, Matt Carpenter has developed into an important member of the club. In terms of big-time production, though, the Cardinals have few options upon which they can reasonably rely.

Dan Szymborski’s ZiPS projections for the Cardinals support this observation: per ZiPS, no position player on the St. Louis roster is likely to produce more than 3.1 WAR in 2017; only one pitcher is projected for more than 2.1 wins. That pitcher — and, incidentally, the only player on the Cardinals whom one might reasonably classify as a “star” — is Carlos Martinez.

Yesterday, the Cardinals very wisely locked that star up. Martinez and the club agreed to a five-year extension worth a guaranteed $51 million. The deal includes two options that could keep Martinez in St. Louis through 2023 and buy out four years of free agency, leading to a possible total value of $85.5 million.

A week ago, I suggested that the Wil Myers deal — for six years, $83 million guaranteed — indicated that extensions for players who possessed more than three and less than four years of service time might become a lot more expensive. This contract appears to provide evidence to the contrary.

In that post I noted that, among such position players, only five had recently reached contract extensions — and that those were either upside bets on riskier players like Michael Brantley and Josh Harrison or big-money contracts for big-time players like Freddie Freeman. The one contract in the middle involved Dee Gordon and his five-year deal for $50 million, an agreement that also includes an option. Martinez’s contract is like Gordon’s, except with an additional free-agent year surrendered by the player.

On the pitching side, meanwhile, there’s virtually no precedent for this type of deal.

Martinez’s deal breaks the record for biggest guarantee to a starting pitcher entering arbitration, a distinction which previously belonged to Corey Kluber after he was guaranteed $38.5 million heading into the 2015 season. That deal might also potentially last seven seasons. At the time, however, Kluber was a super-2 player. He was entering arbitration for the first time, but he was still four years from free agency, unlike Martinez’s three. He was also coming off a Cy Young Award and heading into his age-29 season, meaning he was four years older than Martinez is now. Kluber’s deal provided some guaranteed income, but also gave away all of his prime years: he won’t be a free agent until after his age-35 season.

That isn’t the case for Martinez, who enters just his age-25 season. Even if all of the options are exercised, Martinez will still head to free agency after his age-31 season, the same age as Zack Greinke when he signed his $206 million deal with the Arizona Diamondbacks.

Just because Martinez will get an another opportunity at free agency doesn’t mean that he didn’t give up a lot for this guarantee. Over the past two seasons, Martinez ranks among the top 25 of all pitchers by FIP-based WAR; by RA-9 WAR, he appears among the top 15. He slowed down at the end of 2015 with shoulder discomfort, but showed little signs of ill effect in 2016. His strikeout rate was down slightly last year, but he kept the ball in the park even as everyone around him struggled to do the same, putting up a similar three-plus-win season in the face of an offensive explosion last year. Unlike in 2015, Martinez closed the year strong. Over his last 10 starts, he pitched 64 innings and struck out 66, with an excellent 2.53 ERA and very good 3.07 FIP. If Martinez could build on or even maintain his performance over the next three years, he would have been looking at a monster payday.

It’s very rare for a pitcher who’s recorded between three and four years of service time (like Martinez) to sign a contract extension. In such a case, the player in question is already guaranteed of becoming a millionaire, meaning he’s already effectively received the “life-changing money” offered by many extensions. Martinez, for example, was set to make $4.25 million this season if he won his arbitration hearing, and free agency would have been just a few seasons away. Per a search at MLB Trade Rumors, only one starting pitcher in the last five years has given up any free-agent seasons in a contract extension of this type. That contract went to Wade Miley, who gave up a single free-agent year, in the form of an option, when he signed a three-year deal two years ago.*

*Carlos Carrasco also signed a deal entering arbitration the first time, but he had never started for a full season and spent the previous year between the bullpen and the rotation. He gave up three years of free agency and was guaranteed just $22 million.

The last player to give up more than one free-agent season in a contract extension like Martinez’s was Johnny Cueto back in 2011. Cueto signed a four-year deal with a $27 million guarantee that included a team option. In the last decade, the only other player to give up more than one year in free agency was Ervin Santana back in 2009. In the cases of both Cueto and Santana, the players gave up two years of free agency. Martinez is giving up four.

The deal guarantees Martinez $51 million. Accounting for his arbitration seasons plus a slight discount that puts his two free-agent seasons at $17 million each, Martinez needs only to perform like an average pitcher at ages 28 and 29 for this deal to be worthwhile for the Cardinals. Anything more would prove to be a bargain. The Cardinals did agree to frontload some of the contract, putting $27 million into arbitration seasons which would probably cost $10 million less than that figure. While that might be a boon for Martinez, it’s not difficult for the Cardinals to move that money around.

Martinez is giving up a lot here. Steamer rates Martinez as the 21st-best pitcher in baseball, while ZiPS ranks him even higher, at 13th overall. If Martinez is still at that level in three years, he’d be looking at a $200 million payday after his age-27 season. Given that, under the terms of the deal, Martinez would only receive around $85 million through his age-31 season, it certainly seems like a poor investment decision. However, these decisions aren’t as easy as they seem. Martinez could take $4 million now and hope for $200 million later or he could take $51 million now and hope for something less later, say $100 million or so. He’s potentially costing himself the opportunity of an extra $100 million or so.

However, two years ago, he saw his friend Oscar Taveras die in the Dominican Republic before Taveras could earn more than a few hundred thousand dollars. A few weeks ago, fellow countryman Yordano Ventura, a 25-year old, died from the same fate. At 25, Martinez is young, but he’s also a father and he has spent much of this winter using his status to raise money through his charity and help his hometown of Puerto Plata, which has been ravaged by floods. It’s important to keep in mind that Martinez doesn’t get to make an extension decision 100 times and take the average outcome. He doesn’t even get to do it two times. He has this one decision to make, and passing up $50 million is a difficult decision.

The players and owners have agreed to a system that depresses salaries for a player’s first six-plus seasons in exchange for riches in free agency. That system favors smaller guarantees the further away a player is from free agency. Many players are willing to take a chance to get to free agency. Others are not, and teams still happily take advantage.

We look back at the contracts given to Madison Bumgarner and Chris Sale and consider them some of the biggest bargains in the game. Despite a guaranteed income 50% greater (or even more) than what those pitchers received, this contract has the potential to be that kind of bargain for the Cardinals. Martinez gets his guarantee, but the Cardinals could have a star locked up throughout his prime at journeyman rates. For a team that has had trouble developing star players this decade, extending Martinez was something the Cardinals needed to do. It’s possible, perhaps even likely, that Martinez will regret giving up so many years of free agency, but if he continues to perform at a high level, he will get one more crack at free agency to sign a mega-deal.