The Cardinals are a solid all-around team. So much so, that a common complaint is that the roster is hard to upgrade. In the 2013-2014 off-season, signing Jhonny Peralta was a huge upgrade over the nightmare that was Pete Kozma and Daniel Descalso sharing starting duties. The trade for Jason Heyward was a huge upgrade at the time over a younger Randal Grichuk. This year, the signing of Dexter Fowler filled the only real hole in the lineup.
The Cardinals are a team full of capable starters, short on high-end talent. Carlos Martinez, however, breaks the mold. He led the team in fWAR in 2016, and is projected to do the same in 2017. You might be aware of the fact that fWAR only considers fielding-independent results, and that might sell Carlos short. I found that while his K’s have dropped this year, he was allowing weaker contact. That could just be random, or it could be a logical result from a strategy of pitching more to contact. Don’t take my word for it? That’s understandable. Fangraphs writer Rylan Edwards found that Carlos was the only pitcher in baseball with three pitches with above-average movement vertically and horizontally. That seems to earn him both more called strikes than average, as well as weaker contact than average.
While there is understandably a lot of excitement surrounding Top Prospect Alex Reyes and the chance he becomes an ace, El Gallo is the Cardinals player most likely to obtain superstar status in the near future. He also only has three years of control left. Newest VEB writer Josey Curtis has already floated the idea, as has Jeff Todd of MLBTradeRumors.com.
To start off, let’s look at prior extensions for players like Carlos Martinez. That is, pitchers three years away from free agency. We’ll look at the date they signed, how productive they were before their extension, the money they received, and, if applicable, their projected earnings in arbitration according to MLB Trade Rumors’ very useful method for projecting arbitration salaries.
We get three recent cases, followed by four cases occurring at least six years ago. The earlier cases are from a long time ago in baseball market terms, but we can at least adjust for inflation. Lance Lynn’s deal didn’t buy out any free agent years, but it at least gives us information on how his arbitration years should be valued, as Carlos and Lance had nearly identical projections for first time arbitration salaries.
Of seven previous cases, there are three players more productive than El Gallo. One of the first things of note is that these players did not sign for many extra free agent years. Carlos Carrasco, Johnny Cueto, and Ervin Santana gave their team two additional years of control. Wade Miley, Paul Maholm, and Scott Kazmir signed on for just one extra year. Kazmir is the only pitcher featured here that was younger than Carlos, so I’d like to see the Cardinals break ground here with the longest extension for a pitcher in his service time category.
Many here have heard of the 40/60/80 rule for valuing a player’s arbitration years. That is, in a player’s three years of arbitration, he’ll make 40% of his worth in the first year, 60% in the second year, and 80% in the third. That is outdated though. Great baseball blog The Point of Pittsburgh found that 25/40/62 was much more appropriate. The arbitration process doesn’t make rulings based on public valuations of WAR though, so we’re talking broad strokes here. Some skill sets are over-valued and under-valued by arbitration. Using MLBTR’s projection for Carlos’ first year of arbitration, and giving him raises commensurate with TPOP’s averages, here’s how Carlos’ arbitration years stack up:
If you’re still looking for a reason why the Cardinals guaranteed Lance Lynn his arbitration salaries ahead of time without getting any free agent years, this will do. According to this estimation, Lynn took about $5M less than what he would have received on average going year to year through the arbitration process. That seems like savings the Cardinals should have been interested in.
Getting back to Martinez though: it looks like on average, he’ll cost about $27M through the arbitration process. Lance and many of the other deals shown above show that guaranteeing them in advance should result in a discount from that number. That’s an important consideration when trying to find a price the Cardinals should offer him for an extension.
How should we value his free agency years though, so many years in advance? Here’s how I decided to do it. I started with his projection for 2017, and applied an average aging curve. I started with a $8.5M price of a win in free agency, and applied 5% inflation for each year after. Here’s how Carlos’ worth stacks up:
The first three years are already years the Cards’ have under control, but it also shows how valuable of an asset Carlos is already. Taking his projected value over the next three years, minus the average arbitration cost figured above, his next three years figure out to a $66.4M Surplus Value. That doesn’t quite make him as valuable as Chris Sale, who netted one of the very best prospects in baseball, plus three other decent prospects, but maybe it makes him one or two tiers below. If the Cardinals made him available, they would get some great offers.
However, it’s the years after 2019 that we need to look at here. The first two years Carlos is a free agent project to be worth over $50M total. Add that to his arbitration-limited cost the first three years, and he figures to be worth right at $80M over the next five years. His age 30 and 31 seasons also currently project to be worth over $20M a piece. I have to stress that this is an average aging curve, and few players age at the average rate. Over the next few years, his career could be derailed by injuries or loss of command, or he could turn into the ace we all have hoped he’d become.
Of course, as the deals shown above indicate, making a deal now in advance figures to make for quite a discount from that. Just looking at the option years, pitchers of Carlos’ nature were only paid around $12M a year for their free agent years (though some of those deals could use some adjustment for the rampant inflation that has occurred since).
With all this in mind, here’s what I think the Cards should offer Carlos: $55M over the next five years, plus two options at $15M a piece. When considering his projected cost in arbitration, plus the projected value of his first two free agent years, this is 68.5% of his worth calculated here. The team also gets two option years that could come at quite the discount depending on how Martinez ages.
This seems like a point where it’s a win-win for both. Carlos gets a guarantee ten times higher than what he’s projected to make next year. Worst case scenario, he and his family will have obtained generational wealth that people like us can only dream of. Best case scenario, he makes $85M through his age 31 season, and enters free agent market still an attractive asset, worthy of a $100M+ guarantee.
The Cardinals, on the other hand, end up with an exciting, valuable pitcher at a rate much lower than what they could acquire on the free agent market. If they exercise both options, then they end up with four free agent years of El Gallo at $58M, ten million less than what they’ll pay perennially average Mike Leake the next four years. But they’re only guaranteeing $28M over what Carlos will make on average through arbitration, or less than what they just guaranteed reliever Brett Cecil. However, if they let him get much closer to free agency, and he continues to pitch well, he could easily demand a contract upwards of $150M, way past Adam Wainwright’s deal of $97.5M over five years, currently the largest deal the Cardinals have gave to a pitcher.
Right now, Carlos Martinez is the team’s best player, and a fan-favorite. As the “old core” of the team continues to age, and people continue to notice that he is ridiculously photogenic, he also looks likely to become the face of the franchise. He also has already done great things with charity. All that’s necessary now, is a long-term commitment from the player and the team. With the Cardinals’ role in the Hot Stove cooling down, I think this should become off-season priority number one for the Cardinals.