The Silver Lining to Yu Darvish’s Injury

Yu Darvish is probably going to require Tommy John surgery. As Jeff noted yesterday, this is a blow to the Rangers already slim playoff odds, and now our projections have them as perhaps the worst team in the American League. After last year’s debacle, the team was hoping for a big bounce back, but that seems particularly unlikely now, and it’s a legitimate question whether this move should cause the front office to start really playing for the future.

So, yeah, this is bad news. The 2015 Rangers just became potentially unwatchable, especially if they perform poorly, eventually trading away Yovani Gallardo and maybe even Derek Holland; the remnants of the rotation would be the worst in baseball. But because of a series of triggers in Darvish’s contract, it’s actually possible to see this as not entirely awful news, with even some long-term upside for the Rangers

Darvish’s contract runs from 2012 to 2017, covering the six years of service time required for a player to achieve free agent status. However, as part of the deal, agent Arn Tellem negotiated a scenario in which Darvish could opt-out of the contract after the 2016 season, hitting the open market a year earlier. According to Cot’s Contracts, the final year of the deal converted to a player option if:

1) wins Cy Young in 2012-16 and finishes 2nd-4th in Cy Young vote in another season 2012-16

or

2) finishes 2nd in Cy Young vote once in 2012-16 and finishes 2nd-4th in two other seasons 2012-16

In 2013, Darvish was the runner-up in the AL Cy Young voting, so he has already accrued one part of the criteria needed to trigger the opt-out. If Darvish won the Cy Young in either of the next two years, or finished in the top four both this year and next year, the final year of the contract could have been voided, and the Rangers would have had to outbid the rest of baseball for the rights to keep Darvish around in 2017. This injury eliminates almost any chance of the second set of criteria being reached — Darvish finishing in the top four in Cy Young voting this year seems nearly impossible — and makes it far less likely that he’ll win the 2016 Cy Young either, as the Rangers will likely limit his workload next year.

While it certainly wasn’t a guarantee that Darvish was going to be able to opt-out of his contract after next year, the odds of it happening now seem to be fairly close to zero. So, while the Rangers are likely to lose Darvish’s value for 2015, they can now count on having him under contract in 2017, meaning that not only are they not losing a year of Darvish’s contributions, this actually reallocates the timeline for when he’ll provide value to a year in which they’re more likely to contend.

Given a couple of years, the Rangers could potentially be back on track. They are a prime example of how quickly things can change in baseball, as they were an elite team as recently as two years ago, but now are on the bottom of the ladder trying to climb their way back up. But if a few prospects develop and they make a couple of good transactions, the Rangers could be in a much better spot in a couple of years than they are now, and now that 2017 team is much more likely to feature Darvish at the front of the rotation than it was before.

Additionally, the cost of signing Darvish to another extension just went down significantly. Had Darvish stayed healthy and pitched at his established level for the next couple of seasons, he’d have joined Max Scherzer and Clayton Kershaw in the $200 million club. If he was able to trigger the opt-out and become a free agent after the 2016 season, he would have been a good bet to break Kershaw’s mark for the most guaranteed money ever given to a pitcher. Having one Tommy John surgery on his resume will drive down his price, however, especially since it will push his free agency back a year.

While the Rangers would certainly rather have a healthy Darvish and just deal with the consequences of him being so good that he demands a significant raise, this probably does make it a bit more likely that they’ll be able to keep him in Texas long-term. And if Darvish comes back at full strength, then the overall net effect will have been to shift some value from a year in which they were likely going to be a non-factor into a year in which they may have better odds of winning. Toss in the cost savings associated with delaying his free agency and increasing the risks for other buyers, and this could actually work out in the Rangers favor over the long-term.

For 2015, losing Darvish is bad news, but if 2015 was going to be a lost cause anyway, then this might not end up being all that different from trading a rental for a prospect. They lose some present value but potentially improve the team’s future, and given the success rates of Tommy John surgery, you’d probably rather bet on Darvish returning to full health over some kid in A-ball developing into a big leaguer. Add in that this probably helps push the Rangers front office towards a future-oriented strategy — which they probably should have been pursuing to begin with — and this could actually end up being a net positive for the Rangers.

Of course, you never want your star players to get injured, but if you have to lose your star pitcher, this is the kind of scenario where it doesn’t sting quite as badly. By essentially guaranteeing that they’ll have Darvish in 2017 and allowing the team to more actively plan for the future, there is a real silver lining to this particular cloud.