Financial Cost Of Tommy John Surgery To Young Pitchers by Wendy Thurm May 16, 2014 Jose Fernandez. Patrick Corbin. Jarrod Parker. A.J. Griffin. Luke Hochevar. Matt Moore. Brandon Beachy. Cory Luebke. Bruce Rondon. Bobby Parnell. Kris Medlen. Ivan Nova. And now Martin Perez. Top and mid-tier pitchers in the early stages of their professional careers who have had Tommy John surgery this season, or in the case of Perez, are about to have it. Then there’s Matt Harvey, Jonny Venters, Dylan Bundy, Alex White and Eric O’Flaherty, who went under the Tommy John knife last season. For these pitchers, the surgery and rehabilitation will consume critical service time in their careers when they would otherwise be building up value for their arbitration-eligible seasons or free agency. So while we lament the loss of these talents to our favorite team and to the game, the players face a troubling question: how will Tommy John surgery and the typical 12-18 month recovery time affect their short-term earning power? Let’s start with the “lucky ones”: Matt Moore, Martin Perez, Cory Luebke and Dylan Bundy. Moore is in the third year of a five-year contract with Rays. He’s guaranteed $2 million next season and $5 million in 2016. If he returns 12-18 months after his surgery, he’ll be ready to pitch midway through next season, and have all of 2016 to regain his form before the Rays have to decide whether to pick up Moore’s $7 million option for 2017. Perez is in just the first year of a four-year deal with the Rangers. Even if he misses all of 2015, he’ll be paid $2.9 million in 2016 and $4.4 million in 2017, and have plenty of time to get back on track before the Rangers have to decide on his club option for 2018. Luebke just had his second TJ procedure — the second during the life of his four-year contract with the Padres. He’ll have pocketed close to $7 million and pitched only 31 innings between 2012 and 2014. Depending on when he returns in 2015, he’ll have less than a full season to prove the Padres should pick up their $7.5 million option for 2016. Dylan Bundy is even luckier. He signed a major-league contract with the Orioles after Baltimore selected him fourth overall in the 2011 amateur draft. Bundy’s contract pays him $1.245 million a year over five years, through the end of the 2016 season. After that, he’ll have three years of arbitration eligibility. So Bundy’s 2013 Tommy John procedure shouldn’t set him back too far as he works to build up value ahead of his first year of arbitration eligibility in 2017. Reliever Eric O’Flaherty is also in decent shape. He had Tommy John in last May and became a free agent at the end of the 2013 season. The Athletics signed O’Flaherty to a two-year/$7 million deal before this season, with the understanding he wouldn’t be ready to pitch in the majors until after the All-Star break, at the earliest. That will give O’Flaherty at least a full season in 2015 to enhance his value before becoming a free agent again. The financial future for the other 2013-2014 TJ pitchers is much less clear. This chart provides the service time and salary details for the five key pitchers that underwent Tommy John in 2013: Pitcher Service Time Entering 2014 2013 Salary 2014 Salary Contract Status Entering 2015 Contract Status Entering 2016 Dylan Bundy 1.015 $1,245,000, 3rd year of 5-year contract $1,245,000, 4th year of 5-year contract $1,245,000, 4th year of 5-year contract $1,245,000, 5th year of 5-year contract Matt Harvey 1.072 $498,750 (pre-arb) $546,625 (pre-arb) pre-arb 1st year arb Alex White 2.092 $497,100 (pre-arb) $502,000 (pre-arb) 1st year arb 2nd year arb Jonny Venters 4 $1,625,000 (1st year arb) $1,625,000 (2nd year arb) 3rd year arb 4th year arb Eric O’Flaherty 6.062 $4,320,000 (last year arb) $1,500,000, 1st year of 2-year contract $5,500,000, 2nd year of 2-year contract free agent Alex White is in the most precarious position, as he’ll be entering his first arbitration year with a nearly blank slate over the last two seasons. Matt Harvey will have at least all of 2015 to reestablish himself as an ace before hitting his first arb year. As a reliever, Venters shouldn’t expect much more than his 2014 salary in 2015. As it is, the Braves agreed to pay him the same this season as last season, even after the TJ procedure. The outlook is even dicier for several staff aces who went under the knife earlier this season. Player Service Time As of 1/1/2014 2014 Salary Contract Status Entering 2015 Contract Status Entering 2016 Bruce Rondon 0.103 $505,000 (pre-arb) Pre-arb Pre-arb Jose Fernandez 1 $635,000 (pre-arb) Pre-arb 1st arb year Martin Perez 1.038 $750,000 (1st year of 4-year contract) $1,000,000, 2nd year of 4-year contract $2,900,000, 3rd year of 4-year contract AJ Griffin 1.102 $505,000 (pre-arb) Pre-arb 1st arb year Patrick Corbin 1.105 $515,000 (pre-arb) Pre-arb 1st arb year Jarrod Parker 2 $500,000 (pre-arb) 1st arb year 2nd arb year Matt Moore 2.107 $1,000,000(3rd year of 5-year contract) $2,000,000, 4th year of 5-year contract $5,000,000, last year of 5 year contract; team option for 2017 Brandon Beachy 3.014 $1,450,000 (1st arb year) 2nd arb year 3rd arb year Ivan Nova 3.024 $3,300,000 (1st arb year) 2nd arb year 3rd arb year Cory Luebke 3.033 $3,125,000 (2nd year of 3-year contract) $5,250,000, 3rd yr of 3-year contract Club options for 2016 ($7.5M), 2017 ($10M) Bobby Parnell 4.132 $3,700,000 (3rd year arb) Last year arb 1st year free agency Kris Medlen 4.137 $5,800,000 (3rd year arb) Last year arb 1st year free agency Luke Hochevar 5.151 $5,210,000 (3rd year arb) Last year arb 1st year free agency Jarrod Parker of the Athletics is most at risk, as he’ll miss all of this season and then be arbitration eligible this winter. I looked back at the salary history of top to mid-tier starting pitchers who had TJ surgery dating back to 2007, and didn’t find anyone in precisely Parker’s situation. A quick look at Baseball-Reference’s “most similar stats” list for Parker shows A.J. Griffin and Daniel Hudson, who are also recovering from TJ surgery, and Alex Cobb, who will enter his first arbitration eligible year this offseason, too. Rondon, Fernandez, Griffin and Corbin will face similar issues, depending on how quickly they recover and how many innings they pitch in 2015, the last season before they each become arbitration eligible. I can see Fernandez and Corbin pointing to the first year arbitration salaries of Max Scherzer ($3.75 million in 2012), Justin Masterson ($3.825 in 2012) and David Price ($4.35 million in 2012) to establish a baseline for their first year arb salary, but the system is based on comparable players, and those guys weren’t injured when they got those deals. Rondon and Griffin will have fewer comparables still. Beachy, Nova, Medlen, Parnell and Hochever have their 2014 arb salaries as a baseline, but they may not necessarily see those same figures from their teams this winter. That’s precisely what happened to Charlie Morton, who needed TJ surgery in 2012, his first season of arbitration eligibility. He and the Pirates had agreed on a $2.45 million salary for 2012, but heading into 2013 Morton was still rehabbing his elbow. His 2013 salary dropped to $2 million. Here’s the list of pitchers who had TJ surgery between 2007 and 2012, with information on their salaries and contract status in the years following the procedure: Player Year of TJ Service Time in Year of TJ Salary Year of TJ Salary Year After TJ Salary 2 Years After TJ Salary 3 Years After TJ Josh Johnson 2007 1.027 $382,000 (pre-arb) $390,000 (pre-arb) $1,400,000 (1st year arb) $3,750,000 (2nd year arb, part of 4-year contract) Jaime Garcia 2008 0.047 split major-minor contract $400,000 (pre-arb) $400,000 (pre-arb) $437,000 (pre-arb) Jordan Zimmermann 2009 0.154 split major-minor contract $401,000 (pre-arb) $415,000 (pre-arb) $2,300,000 (1st year arb) Edinson Volquez 2009 1.059 $440,000 (pre-arb) $445,000 (pre-arb) $1,625,000 (1st year arb) $2,237,500,000 (2nd year arb) Stephen Strasburg 2010 0.118 $2,000,000, 2nd year of 4-year contract 2,500,000, 3rd year of 4-year contract $3,000,000, 4th year of 4-year contract $3,900,000 (1st year arb) Kris Medlen 2010 0.137 $407,500 (pre-arb) $429,500 (pre-arb) $490,000 (pre-arb) $2,600,000 (1st year arb) Jenrry Mejia 2011 1 split major-minor contract split major-minor league contract $494,925 (pre-arb) $509,675 (pre-arb) Brett Anderson 2011 1 $1,000,000, 2nd year of 4-year contract $3,000,000, 3rd year of 4-year contract $5,500,000, 4th year of 4-year contract $8,000,000 club option exercised Kyle Drabeck 2012 0.071 $485,900 (pre-arb) $499,500 (pre-arb) In minor leagues Danny Duffy 2012 0.085 $487,750 (pre-arb) $505,125 (pre-arb) $526,000 (pre-arb) 1st year arb Drew Hutchison 2012 0.128 split major-minor contract $493,200 (pre-arb) $503,000 (pre-arb) 1st year arb Brandon Beachy 2012 1.014 $495,000 (pre-arb) $510,000 (pre-arb) $1,450,000 (1st year arb) 2nd year arb Cory Luebke 2012 1.033 $500,000, 1st year of 3-year contract $1,000,000, 2nd year of 3-year contract $5,250,000, 3rd year of 3-year contract Club options for 2016 ($7.5M), 2017 ($10M) Josh Tomlin 2012 1.069 $494,500 (pre-arb) $501,800 (pre-arb) $800,000 (1st year arb, lost arbitration) 2nd year arb Charlie Morton 2012 2.01 $2,445,000 (1st year arb) $2,000,000 (2nd year arb) $4,000,000, 1st year of 3-year contract $8,000,000, 2nd year of 3-year contract Ben Lindbergh raised an interesting scenario over at Baseball Prospectus on Thursday. He suggested that teams with young pitchers who’ve had TJ surgery and are straddling the pre-arb and arb eligible years approach those pitchers about signing a long-term contract — before the pitchers get back on the field. The advantage to the pitcher is gaining some financial security when faced with tremendous uncertainty. The advantage for the team is to lock down a top-tier pitcher for a relatively low cost before he re-establishes his pre-surgery value. It’s a long road back from Tommy John surgery. And while teams have every incentive to provide the best medical care and rehab for their pitchers to get them healthy and back on the field, those same teams will use the TJ procedure — and the missed innings — as a reason to hold down future salaries.