Johnny Cueto’s Two-Year Six-Year Contract

The idea of giving a six-year contract to a pitcher scares the dickens out of an awful lot of people. As for the idea of giving a six-year contract to Johnny Cueto? It seems all the more terrifying, given Cueto’s somewhat checkered history. But here we are, with the Giants following up on the Jeff Samardzija acquisition by signing Cueto for six years and $130 million. Before the Diamondbacks signed Zack Greinke, they were said to have offered Cueto six years and $120 million; he looks smart now for turning that down.

Absolutely, this is a six-year guarantee. For Cueto, he’s now looking at a floor of $130 million over six seasons, so it makes sense that’s how this is being reported. Yet as has become the trend, this is a deal with a player opt-out clause, two years in. The industry is seeing more and more of these, and the rest of us are still trying to figure out how to wrap our heads around them. The best I’ve seen it put: this kind of contract is a two-year deal with a four-year player option. And while, in the event of something going horribly wrong, the Giants will be stuck with a monster mistake, it looks to me like Cueto’s in line to leave after 2017. It seems like both parties want it that way.

It is interesting to see the Giants put themselves in position to have Cueto for six years after they were reluctant to go that long for Greinke. Though Greinke is older, he’s also better, and he feels like the superior bet to remain healthy and effective long-term. I can’t walk you through exactly why the Giants do everything they’ve done, but an important point is that Cueto has that two-year opt-out. Greinke’s contract with Arizona contains no opt-out clause. If the Giants figure Cueto’s good early on, they assume little long-term risk, as Cueto disappears for more money.

I don’t think there’s any question Cueto’s stock was down. Going into free agency, he did have a strong start in the World Series, but he also had an extremely up-and-down final three months with the Royals. Every team in baseball believes in Cueto’s talent, but they haven’t all believed in his body, or in his psychology. So Cueto wasn’t going to be looked at as a sure-fire No. 1. Not with all of those question marks.

As a free agent, then, Cueto wanted to find some nine-figure security, but he also wanted an opportunity to potentially get back to the market with fewer lingering doubts. This is an excellent compromise: Cueto will never have to worry about money again, but if he bounces back in San Francisco, he can hit free agency once more as a 32-year-old front-line starter, which is what Greinke is today. With success, there’s a bigger payday.

In terms of contract structure, the Giants have slightly front-loaded Cueto’s deal, the first two years being worth $46 million. That leaves $84 million for the remaining four years, and there’s also a club option for the seventh year. This kind of structure increases the chances that Cueto opts out, relative to something even or back-loaded, without a club option. If that confuses you, think of it this way: the more there is left on the deal after the opt-out, the less there is for Cueto to gain by testing the market. Having less money left lowers the bar. And just as a player opt-out is, in isolation, player-friendly, a club option is, in isolation, team-friendly. So the deal is front-loaded, with a small team benefit at the end.

Now let’s think about the timing of the opt-out. David Price can opt out after year three. Zack Greinke opted out after year three. Clayton Kershaw can opt out after year five. Johnny Cueto can opt out after year two. That puts him in line to hit the 2017-2018 free-agent market. It’s not a terrible market. It could feature Masahiro Tanaka. It could feature Clay Buchholz. It could feature Alex Cobb and Jake Arrieta and Tyson Ross. But the year after stands to be insane: Kershaw might opt out, and Price might opt out. Other free-agent pitchers could include Jose Fernandez, Matt Harvey, Jose Quintana, Dallas Keuchel, Patrick Corbin, Shelby Miller, Garrett Richards, Yu Darvish, and more. If Cueto were given a third-year opt-out, there was a chance of him drowning in a market full of options. This way, he could hit the market early, and there’s some chance he could be the best starting pitcher available. Tanaka and Cobb have bigger health questions. Arrieta and Ross just might. It would be a good chance for Cueto to score.

And finally, examine the situation Cueto is entering. When he started to struggle last year, he was playing in the American League, in front of a good defense but also in a large ballpark that doesn’t actually reduce runs. Cueto, with the Royals, was being counted on to be the guy. Now Cueto is returning to the National League, where the lineups don’t run so deep. He’s going to continue playing in front of a strong team defense, from the looks of things, and there is no more pitcher-friendly ballpark environment than AT&T Park. It’s a league that makes pitchers look better, and a defense that makes pitchers look better, and a stadium that makes pitchers look better. Cueto should have a catcher who makes pitchers look better, and the Giants have a coaching staff that has a history of making some pitchers look better. Cueto would even slot in as the No. 2, behind Madison Bumgarner, relieving some potential pressure. There might be no better place for a pitcher to go if he wants to boost his value, and that’s Cueto’s whole angle. He wants to win, I’m sure, because everyone wants to win, but Cueto wants to be a free agent again without people questioning him about everything. San Francisco can help him accomplish that. They can do more than possibly any other team.

Cueto would just need to stay healthy. And as easy as it is to call him fragile, he’s exceeded 200 innings three of the last four years. He hasn’t suffered anything catastrophic, he doesn’t get by with upper-tier velocity, and tests on his elbow last May didn’t reveal any tears. Cueto appears to be fit — the Giants will make sure of that — and if his elbow is good to go, he doesn’t seem like a massive risk to blow out. He’s had injuries, and he’ll probably have some more injuries, but he just needs teams to stop worrying about his UCL. A healthy couple seasons can do that.

With an unhealthy break, Cueto will end up $130 million richer. Not a bad downside, for him. And the Giants will accept that chance, because they believe, as Cueto believes, that he’s healthy now, and San Francisco will be a good environment. So then Cueto can pitch well for a couple of seasons, and then the two can go their separate ways, with the Giants perhaps having won again, and with Cueto perhaps at the top of the free-agent market. The Giants would generally prefer not to go to six years for a veteran starting pitcher. The circumstances help explain why this six-year deal is more like a two-year deal, with a four-year option that neither party wants.