The St. Louis Cardinals agreed to a three-year, $22 million contract with Lance Lynn on Thursday. Is it a good deal?
Lynn has accrued over three years of MLB service time which means, under the collective bargaining agreement (CBA) between MLB and the MLB Players Association, he is eligible for salary arbitration this offseason. In that process, a team and a player exchange salary figures for the forthcoming season and could eventually go to an hearing in which an arbitrator chooses one party's proposed salary or the other. Most of the time, team and player avoid a hearing and sign a one-year deal for a salary somewhere in the middle. Tony Cruz and Peter Bourjos did just that with the Cardinals on Thursday.
Sometimes, though, the player and club agree to a longer deal. Typically, such a contract buys out a player's arbitration years and some of his free-agent years. Sometimes those free-agent years are guaranteed; sometimes they're club options; oftentimes there is a mix of both. For pitchers, club options are common, because it allows the team to avoid some injury risk. Jaime Garcia's extension is an example of this type of contract mixed structure. The Cards guaranteed his arbitration years and a free-agent year; there were also club option years tacked on. The recent Jordan Walden extension is another example, though it simply guaranteed the reliever's two arbitration-eligible years with a club option for his first free-agent year.
Every once in a while we get a contract that avoids salary arbitration like the one Lynn just signed—a deal that covers only arbitration-eligible seasons and doesn't buy out a single free-agent season. The most recent example I can think of for a Cardinal is Jason Motte's two-year contract, which just ended. That contract guaranteed Motte $12 million for his second and third years of salary-arbitration eligibility and that was it.
Before Lynn and the Cardinals agreed to a contract somewhat similar to Motte's, according to MLB.com Cardinals beat writer Jenifer Langosch, they explored a longer term deal analogous to Garcia's:
"Obviously, when you start talking about free-agent years or option years, there's a cost to that," general manager John Mozeliak said. "It certainly was something that was on the table and discussed. But ultimately the comfort of something getting done, even though it may feel short, it gives us some cost certainty."
Parsing this bit of Mospeak, it appears that Lynn was seeking a higher salary for a contract that bought out some of his free-agent years than what the Cardinals were willing to pay. Perhaps this deal is a show of good faith toward Lynn in the hopes that the parties can take up negotiations again at some future date, but that's just baseless speculation. As Mozeliak states, and Langosch fleshes out further, the Cardinals prized cost certainty when it came to Lynn's salary during his arbitration-eligible years:
The Cardinals viewed Lynn's arbitration case as a unique one, given that the right-hander fell just days short of becoming arbitration-eligible as a Super Two player last year. That allowed the Cards to re-sign him near the Major League minimum in 2014, but also set Lynn up to be, as Mozeliak described it, one of the "higher paid players of that [starting pitching] class" had St. Louis continued through the arbitration process.
For that reason, the Cardinals identified him as an extension candidate a while ago.
At MLB Trade Rumors in December, Matt Swartz authored a very good post looking at Lynn's unique arbitration case, and how the righty was likely to break Dontrelle Willis's record, set in 2006, for the highest first-year arbitration salary. Swartz explains in the post that a case such as Lynn's could break his salary projection system for arbitration-eligible players and earn a salary above or below Lynn's $5.5 million MLBTR projection.
Swartz's analysis reflects the uncertainty the Cardinals saw in Lynn's case. The Cardinals felt that the potential for Lynn to set salary-arbitration records for a starter justified them shouldering the risk that the righty suffers an injury during the next three years and guarantee his salary over that time span rather than going year-to-year via the arbitration process set forth in the CBA. That's understandable.
It's easy to see Lynn earning $5.5 million in 2015 via salary arbitration, as MLBTR projected. If healthy, Lynn could see his salaries escalate in years two and three of arbitration eligibility. David Price, one of Swartz's first-year-arbtriation-eligible comparators for Lynn, earned a tad over $10 million for his second season of arbitration eligibility. Last year, Price earned $14 million. Lynn is no Price—at least not yet. However, it's not difficult to imagine a healthy Lynn earning somewhere between $25 and $30 million via arbitration had he gone year to year to year. After all, free-agent salaries are increasing and that is one of the considerations for an arbitrator at a salary hearing. So, as with Motte, the Cardinals received a bit of a discount in exchange for shouldering the entirety of the injury risk through the end of a pitcher's salary-arbtration eligibility.
Sitting in judgment today: it's a fair deal, one that's hard to get too up or down on.
Correction: The original version of this post gave Max as the first name for Swartz, who put together MLBTR's wonderful arbitration projection system. His first name is Matt. The mistake has been corrected and I apologize to Swartz.