Corey Kluber Foremost Among Pitcher Extension Candidates

Contract extensions for younger players have been on the rise in recent years. Over the past three springs, 38 players with under six years of service have signed extensions buying out free agent years. Twenty-four of those 38 contract extensions were signed by players who had yet to reach arbitration. Eight contract extensions have gone to starting pitchers and seven out of those eight pitchers had not reached arbitration, with Homer Bailey as the lone exception.

Here are the extensions given to pre-arbitration eligible pitchers over the last three springs, with Julio Teheran’s Valentine’s Day deal included as well, from MLB Trade Rumors.

Only Chris Archer was short of a year’s worth of service time, although he was just two years from arbitration as he likely would have been eligible for arbitration as a Super-2 player. Many of the deals look great now, with Chris Sale, Madison Bumgarner, Jose Quintana, and Julio Teheran looking to be bargains for their teams. The contracts to Jon Niese and Derek Holland do have questions, but those deals still look team-friendly at this point. Chris Archer posted a solid season after receiving his contract. Only Cory Luebke has failed to deliver on the Padres’ modest $12 million investment.

The contracts look very good for the team now, but at the time of signing, the players were not a sure thing. This is how the players looked at the time they signed their contracts.

Teheran, Archer and Luebke came with the most risk given their relative inexperience and production, but even the productive players come with risks. As a quick comparison, there were ten players Age-25 and younger who pitched between 250 and 400 innings from 2011-2013 with a WAR from 4-7, including the previously mentioned Quintana, Holland, and Niese. Of those ten pitchers, two (Jarrod Parker, Patrick Corbin) had Tommy John surgery mid-March 2014. Another three (Matt Moore, Jaime Garcia, Derek Holland) failed to reach 40 innings pitched in 2014 with Felix Doubront getting about 80 replacement-level innings. Jon Niese, Chris Tillman, and Alex Cobb pitched decently and Jose Quintana had an excellent year.

Contracts for young pitchers so far away from free agency can backfire but the potential savings are huge. The Giants owe Madison Bumgarner roughly $30 million over the next three years, and have two $12 million options that buy out his first few seasons of free agency. Options on Chris Sale’s contract have the potential to buy out three seasons of free agency. Players agree to these deals before they hit arbitration because of the risk of injury and ineffectiveness. Prior to arbitration, players make the minimum, around $500,000, and guarantees over $20 million can set them up for the rest of their lives. Once a player hits arbitration, he has some security in his first seven-figure contract and becomes less likely to sign an extension.

Below is a chart of players one year away from arbitration. If a team wanted to sign these players to an extension buying out free agent years, the next month could be the last opportunity to get a deal done. The numbers shown are career numbers.

Corey Kluber is easily the most interesting name here. As a Cy Young winner, he is also in line for the biggest payday in arbitration next winter. After winning back-to-back Cy Youngs, Tim Lincecum requested $13 million in his first time at arbitration as a Super-2 and received over $60 million during his four years of arbitration without giving up a single free-agent season. Clayton Kershaw, like Kluber will, received three cracks at arbitration, earning $19 million over his first two years and was set to earn around $20 million in his third before signing his seven-year contract. Given those figures, an extension could be difficult, but with Kluber in his last season before arbitration, now could be the only time to get a long-term deal completed.

The rest of the players above come with risks. Keuchel and Koehler have not shown a great deal of potential, but with the paltry payrolls of the Houston Astros and Miami Marlins, they might be looking to invest money somewhere on the roster. Miller, Peralta, and Hutchison have considerably more potential to break out and give their teams a bargain. Miller pitched poorly for most of last year, but came on strong toward the end of the season. Peralta has yet to strike hitters out at a high rate, but pitches with a high velocity and reduced his walks last season. He could provide a low-cost alternative to the Brewers’ penchant for buying mid-range starters in free agency. Hutchison could be a bargain as his ERA has yet to come down to match his FIP, which was 3.85 in 2014.

Half of the recent extensions have gone to players with less service time than those shown above. There is also a group of players with under two years of service time and two years away from arbitration who could be interested in a contract extension.

This group show more potential than the first group, but with five years of team control remaining before hitting free agency there is considerable variability in the outcomes for player and team. For the Cardinals, Wacha and Martinez both have ace potential, but Wacha has injury concerns while “El Gallo” has yet to establish himself in the rotation. Ventura, Wood, Wheeler, and Gray have already had some success in the majors and show the potential for more. Roark does not even have a spot in the rotation for the Nationals, making an extension unlikely at this time. The Rays might have chosen to extend Archer over Odorizzi. Gibson fits the Twins profile, and Fiers gives the Brewers another option for an extension.

Over the course of the next month, many teams will explore the potential for extensions with young starters as they prove their health during Spring Training. A few teams will hit the jackpot, getting several cheap years of free agency without paying guaranteed money well into a player’s thirties. These low-cost investments rarely do harm, and can provide a tremendous return while also giving players lifetime security instead of the Major League Baseball minimum salary.