Reactions to the Cliff Lee Contract

While Lee’s deal is certainly large, when it was first announced, it slightly surprised me that it wasn’t a lot larger. Given the lack of other elite pitching talent this offseason, the seller’s market so far and the known interest from the Yankees and the recently flush Rangers, Cliff Lee getting a record-setting contract for a pitcher would not have surprised me. The reports of Lee leaving $50 million on the table made Philadelphia’s offer seem almost small though.

Lee’s guaranteed average annual value, $24 million, is a new high for a pitcher, narrowly edging out CC Sabathia’s $23M per year. Sabathia’s contract however is two years longer and 100% guaranteed. Lee only has five secured years with a vesting option for an additional season. In fact, if that option vests, it will decrease Lee’s average annual payout to under Sabathia’s $23 million.

Sabathia was four years younger when he signed his mega deal with New York and Barry Zito was similarly under 30 when San Francisco called with their seven-year (plus option) deal. Did Cliff Lee’s advanced age play a factor in the two shorter years? If it did, it was a small role. The sixth year vests with 200 innings pitched in 2015 or 400 total over 2014-5. That’s not a slam dunk, but it’s not unfathomable either. Lee has eclipsed 200 innings in five of his previous six seasons.

In addition, the offers from Texas and New York both were for six years with a vesting option for a seventh. We do not know what those vesting requirements would have been, but it does show that at least three teams were willing to go to six years with Lee and a couple to seven. Lee’s age didn’t deter everyone from making a long term commitment.

Maybe it should have though. As pitcher’s age, the trend is for strikeouts and walks to decline. Lee’s walks don’t really have room to decline however. And his low 90’s velocity is already not that special. That could pose a problem in the later years of his contract. Lucky for him, he raised his strikeouts to near a career high in 2010 and his walks, while unlikely to drop any further, are so low that he can afford quite a bit of regression and still maintain a good ratio.

Curiously, it’s actually better for the Phillies if Lee’s option vests. It indicates Lee’s still valuable and because of the buyout price ($12.5 million) for the sixth year, the added cost to Philadelphia at that point is just $15 million. Given the expected inflation in dollars per win five seasons from now, Lee would likely need only about three wins of performance to justify a one-year, $15 million outlay.

That’s a much better bet for Philadelphia than the roughly six WAR that Lee will need to produce annually to justify the $24 million per year that they owe him the first five seasons. Lee’s averaged seven WAR the last three seasons combined, but that doesn’t give him a lot of comfort room as he ages. The Phillies may end up needing that sixth year to vest to recoup their entire investment.