The Rise of the John Lackey Clause

When the Red Sox signed John Lackey as a free agent in December of 2009, they had some concern about an existing elbow injury, but not enough concern to walk away from the deal entirely. So, they (or maybe his agent) came up with a pretty creative solution, adding a league minimum club option to the end of the deal if Lackey missed significant time due to an elbow issue. Sure enough, Lackey’s elbow became problematic, and after the 2011 season, he underwent Tommy John surgery and spent the entire 2012 season on the DL, triggering the club option for 2015.

As a result, the Red Sox now own the rights to Lackey’s 2015 season at a salary of around $500,000. Given the recovery rates of Tommy John survivors, it’s quite possible that Lackey could still be a useful pitcher in a couple of years, even at 36-years-old. If he rebounds and becomes something like an average starting pitcher, that option could end up holding $10 to $15 million in value, which wouldn’t quite make up for the fact that the Red Sox paid Lackey $15.25 million to spend last year rehabbing, but it would certainly help balance the scales.

Well, it seems like that contract stipulation might be gaining in popularity. Yesterday, Felix Hernandez signed his seven year, $175 million contract with the Mariners, and it included a stipulation that might very well come to be known as The John Lackey clause.

According to Ken Rosenthal, the Mariners obtained a $1 million team option for the 2020 season if Hernandez spends 130 consecutive days on the DL within one season or in overlapping seasons. This clause only triggers if the DL stint is due to an elbow injury, however, so this is basically just a make-up season if Felix has to undergo Tommy John surgery. 2020 might sound like a long way off, but Felix will be 34 that year, so even if he has to go under the knife at some point in the next seven years, there’s a decent chance that having a 34-year-old Felix under contract for $1 million could be an extremely valuable asset.

In a lot of ways, this kind of clause makes a lot more sense than the various out-clauses and voidable options that have been worked in to previous deals. In most cases, a player is looking to get as much long term security as he can, and this kind of stipulation — along with his no-trade clause — guarantees that Hernandez will get to spend at least the next seven years in Seattle, even if he gets hurt. However, if he does need TJ surgery, the Mariners also retain a chance at getting seven healthy seasons from Hernandez, thereby mitigating some amount of the risk that goes with signing a pitcher to a long term contract.

It doesn’t make it a no-risk deal, of course. Lackey’s elbow caused his performance to suffer even before his elbow went out, and they clearly aren’t going to come out at anything close to break even on the transaction even with the extra year added on to the end. Getting control of one additional season for a guy in his mid-30s who has already had major elbow surgery obviously limits how valuable the option can be, but it gives the team a chance to recoup some of the value lost due to a potential injury.

From an outsider’s perspective, this kind of stipulation seems a bit less hostile than asking for some kind of voidable year at the end, as the Yankees did with CC Sabathia in his negotiation. The traditional vesting/voidable option is kind of baseball’s version of a pre-nup, and no one really enjoys talking about how they’re going to break up before they even get married. This “John Lackey Clause” is kind of the opposite of that, extending the relationship even further into the future in order to try and make sure that both sides are more pleased with the outcome of long term deals for pitchers.

Overall, I think this kind of clause could end up being pretty good for baseball overall. Historically, the risks and rewards of signing a premium pitcher to a long term deal have been slanted too far in favor of the pitcher, and the Lackey Clause might be one small way of balancing the risk between the two sides. While Lackey’s contract is looked upon with scorn from most in Boston, we may find that it set the stage for an interesting, innovative way for teams to enter into better long term deals with starting pitchers overall. The deal won’t work out for the Red Sox, but it may very well end up being a good thing for the sport as a whole.