Last winter, as Manny Machado and Bryce Harper became the first free agents to reach the $300 million plateau, the Yankees kept their powder dry, deciding both that they had enough depth at those players’ respective positions and enough money spent beyond the Competitive Balance Tax threshold. Despite a considerably more glaring need in their rotation, they bypassed the market’s top free agent pitcher, Patrick Corbin, as well, unwilling to go to a sixth year to secure his services, which ended up selling for $140 million to the Nationals. On Tuesday, the Yankees spent the money they had been squirreling away, agreeing to a nine-year, $324 million contract with 29-year-old righty Gerrit Cole.
The Yankees reportedly outbid the Dodgers, Angels, and multiple mystery teams (possibly the Astros and Giants) for Cole, a pitcher whom they have coveted since selecting him in the first round of the 2008 draft (28th overall), only to lose out to his commitment to attend UCLA. Three year later, he was the first overall pick by the Pirates, for whom he pitched from 2013-17 and helped to two Wild Card berths, before being traded to the Astros for four players in January 2018, just two and a half months after Houston had won its first World Series.
In Houston, Cole reconfigured his arsenal, scrapping his sinker and relying more upon his four-seamer and breaking balls, and ascending into elite territory. Over the past two seasons, only Jacob deGrom and Max Scherzer have outdone his 13.4 WAR and his 2.67 FIP, while only deGrom and Justin Verlander have bettered his 2.68 ERA; no starter in that span has outdone his 37.3% strikeout rate. In 2019, Cole set a record for an ERA qualifier by striking out 39.9% of all hitters while also leading the AL with 326 strikeouts, a 2.50 ERA, a 2.64 FIP, and 7.4 WAR. Not only was he poised to hit the market at the apex of his value to date, he was positioned to hit a trifecta unseen since the winter of 1974-75, when Cy Young winner Catfish Hunter of the three-time defending world champion A’s was suddenly declared a free agent after owner Charlie Finley failed to make deferred annuity payments in a timely fashion as stipulated by his contract.
As it was, Cole came up just short in both the World Series and the Cy Young race. Though he pitched to a 1.72 ERA in 36.2 postseason innings while striking out 47 (against just 11 walks) — with five of his seven runs allowed in his World Series Game 1 start — his Astros lost in seven games to Corbin’s Nationals. He did not pitch out of the bullpen on two days’ rest in Game 7 due to predetermined usage rules that in retrospect may have been too rigid, and in the immediate aftermath of the team’s bitter defeat, donned a Team Boras cap while saying, “Technically, I’m unemployed,” when asked to do a postgame interview. Soon afterwards, he finished a very close second in the Cy Young voting to Verlander, who had 21 wins to his 20, and 7.8 bWAR to his 6.9, but otherwise lagged behind Cole in many key stats.
Cole’s contract sets multiple records. It’s the largest in total value for a pitcher, surpassing the $245 million Stephen Strasburg agreed to just the day before. It’s also the highest average annual value for any player, surpassing Mike Trout’s $35,541,667 as well as Strasburg’s $35 million. None of the money is deferred, and he has a full no-trade clause as well as an opt-out after the fifth year (2024), which further increases its value (using his modeling, Ben Clemens took a stab at valuing the opt-out, which you can find here).
Cole joins a Yankees rotation that underachieved in 2019 and was much in need of an upgrade. With Luis Severino limited to just three regular season starts and 12 innings due to a bout of rotator cuff inflammation and then a Grade 2 strain of his latissimus dorsi, the Yankees’ rotation ranked sixth in the AL in ERA (4.51), eight in FIP (4.74), and ninth in WAR (10.6). James Paxton, whose acquisition from the Mariners was the team’s biggest offseason move last winter, was the only starter to take on a substantial workload while posting either an ERA or a FIP under 4.28; in an uneven season, he finished at 3.82 and 3.86, respectively, with 3.5 WAR. Masahiro Tanaka was inconsistent but was also the only other Yankees starter besides Paxton to total more than 1.5 WAR. J.A. Happ was lousy, CC Sabathia was clearly at the end of the line, and while Domingo Germán exceeded expectations at the back end of the rotation, he ended the regular season on administrative leave due to a domestic violence investigation and is anticipated to receive a substantial suspension even beyond the postseason time he missed.
If the Yankees do trade Happ, that leaves them with a front four of Cole, Severino, Paxton, and Tanaka. Barring other additions, Jordan Montgomery (who missed most of the past two seasons due to Tommy John surgery), Jonathan Loaisiga, and Chad Green (who served as an opener 15 times in 2019) are options to round out the rotation in Germán’s absence and provide depth in case of injuries.
Payroll-wise, the addition of Cole pushes the Yankees further into the stratosphere. By Cot’s Contracts’ figures, the Yankees were about $5 million short of the $197 million Competitive Balance Tax threshold in 2018, which reset their marginal tax rate for 2019. By RosterResource, they were about $27.4 million beyond the $206 million threshold in 2019, leaving them with an estimated tax bill of $6.5 million. For CBT purposes, they’re now at about $249.6 million, $41.6 million above the 2020 threshold; at $40 million or more above, they’re subject to additional surtaxes and draft pick penalties, so you can expect to see them try to trim payroll (trading Happ, for one thing), though they’re still working to bring Brett Gardner back to the fold, and perhaps Dellin Betances as well.
Obviously, any contract of such length involving a pitcher carries a great deal of risk, and Cole hasn’t been without health woes, most notably shoulder fatigue and a lat strain that limited him to 22 starts and 138 innings in 2014, and then a triceps strain and recurrent elbow inflammation that limited him to 21 starts and 116 innings in 2016. Even so, he’s thrown at least 200 innings in each of the past three seasons and four of the past five, that while his performance has generally trended upwards. It should be noted that he enters this mega-deal while being able to muster more heat than any of the pitchers whose long-term contracts he has surpassed:
While the velocity may pose an additional injury risk, it also leaves Cole with a greater cushion to lose a tick or two and still maintain above-average heat.
As for the teams that lost out on Cole and are in need of rotation help, they no longer have the luxury of turning to Strasburg or to Zack Wheeler, who agreed to a five-year, $118 million deal with the Phillies on December 4. The Dodgers are reportedly shifting their focus to longtime nemesis Madison Bumgarner, who’s said to be seeking a five-year deal worth at least $100 million. A reunion with Hyun-Jin Ryu would also make sense; either would join a rotation that already includes Kershaw, Walker Buehler, and Kenta Maeda, with Julio Urías, Dustin May, Ross Stripling, and Tony Gonsolin candidates to round out the back end barring another move.
The Angels, who just acquired Dylan Bundy from the Orioles and will get Shohei Ohtani back from Tommy John surgery, need significant help in the pitching department if they’re to contend, as that pair and the remainder of their options — Andrew Heaney, Griffin Canning, Patrick Sandoval and Jaime Barria — aren’t likely to lead the team to the AL West flag or even a Wild Card spot. With some extra payroll room made via the trade of Zack Cozart and 2019 first-round pick Will Wilson to the Giants, they could be suitors to acquire Price from the Red Sox. They could also make a run at trading for the Indians’ Corey Kluber, or pursuing Bumgarner (though he’s less likely to go to the AL because he enjoys hitting), Ryu, or Dallas Keuchel.
As for the Astros, Cole’s former team, beyond Verlander and Greinke (whom they traded for on July 31) are question marks. Brad Peacock has never made more than 24 starts in a season, Jose Urquidy and Framber Valdez each have fewer than 10 big league starts under their belts, Lance McCullers Jr. is coming back from Tommy John surgery, and top prospect Forrest Whitley was limited to 59.2 innings in 2019 due to shoulder fatigue. In theory, they could look to reunite with Keuchel or Wade Miley, but they’re said to be experiencing such a payroll crunch that they would consider trading Carlos Correa.
One thing is clear. While the Astros eliminated the Yankees in the ALCS and finished just one win short of a championship, losing Cole to the Yankees is enough to swing the balance of power in the AL. They, and everybody else in the league, will spend the rest of the winter trying to close the gap again.
Brooklyn-based Jay Jaffe is a senior writer for FanGraphs, the author of The Cooperstown Casebook (Thomas Dunne Books, 2017) and the creator of the JAWS (Jaffe WAR Score) metric for Hall of Fame analysis. He founded the Futility Infielder website (2001), was a columnist for Baseball Prospectus (2005-2012) and a contributing writer for Sports Illustrated (2012-2018). He has been a recurring guest on MLB Network and a member of the BBWAA since 2011. Follow him on Twitter @jay_jaffe.