Maholm Hurts His Wallet by Pitching for Pittsburgh

And the tide rolls on with Paul Maholm inking today what has been reported as a guaranteed three-year deal, buying up his arbitration years, with a fourth-year team option covering what would have been his first foray into the open market. We do not have a leak on the financial terms yet, but that will not stop me from estimating his fair value and then making a prediction on the figures.

Maholm has shown steady improvement the last three years, and tRA* is the most optimistic on him, projecting him to be worth a little under 3 wins next season, which would be his highest value to date (tRA loves the ground ball rate and the increased percentage of missed bats that Maholm generated in 2008). Marcel and CHONE are more pessimistic but not dramatically so, pegging Paul at 2.8 and 2.5 wins respectively.

The two sides had already exchanged figures for Maholm’s first arbitration hearing; the Pirates submitting $2.65 million and Maholm $3.8 million. That would give us a clue that the first year value is probably going to be about in the middle of those, around $3.2 million. That would lean toward an $8 million open market valuation and a three-year arbitration total of just under $15 million. There will be a buyout with the team option, but Maholm should also offer a discount for signing a secure deal, so three years at about $14 million would normally be my guess, with a team option for $9 million and a $1 million buyout. However, given the trend of contracts signed this winter by arbitration-eligible players, if I were pressed to estimate as best as I can, I would knock a million off of the guaranteed money.

For what Maholm is projected for, Maholm is worthy of about $20 million give or take a million to buy out his arbitration years and a touch over $30 million with the team option picked up. Even at his submitted figure of $3.8 million for his first year, that comes out to a open market value of $9.5 million, which would be more akin to his 2007-level of performance and not his once-more-improved 2008 level. It must be hard to build a solid case for a pitcher like Maholm in arbitration since he doesn’t strike out many batters (about league average) and by dint of pitching for the Pirates is hard-pressed to reach double digits in wins. But he keeps the ball on the ground and limits walks enough to make him a valuable pitcher. Whether the Pirates or Maholm know it or not, Pittsburgh benefits from this arrangement and based on what we know so far, they are certainly taking advantage.