Starting pitchers and long-term contracts

With Lance Lynn out for the 2016 season with Tommy John surgery, there is a high likelihood that the Cardinals will add a starting pitcher via free agency. There are several big names available, including David Price, Zack Greinke, and Jordan Zimmermann, and the Cardinals have the money to sign one of these pitchers. Of course, having the ability to sign an elite starting pitcher does not necessarily mean it is a good idea. Big contracts are always a major risk, and this is especially true for starting pitchers, who often miss time with arm-related injuries

At times, it seems like a perception exists among some people that these types of contracts never work and should be avoided at all costs. It is true that these contracts may be riskier because of the amount of money involved, but that does not mean that they are always bad decisions.

If the Cardinals are truly going to consider paying top dollar for an elite starting pitcher, I thought it would be helpful to take a look at the history of long-term contracts given to starting pitchers in order to see how often these contracts end up working out well for the team. Below is a table that includes every $100 million dollar contract given to a Major League starting pitcher. I have included the contract terms (year and total value), the years the contract covers, the player's age, the average annual value of the contract, the value the player has provided (using FanGraphs dollar/WAR metric), and the surplus or deficit value of the contract up to this point.

As you can see, these types of contracts have yielded mixed results, with many of them still in effect.

Of the seventeen contracts listed here, at least five can be considered catastrophic failures. Mike Hampton was both ineffective and injured during his contract, which included two Tommy John surgeries. Barry Zito never lived up to expectations with the Giants, and he probably should have never been given such a contract in the first place, as he had posted a FIP above four in each of his final four seasons with the A's. Matt Cain has struggled with injuries over the last few seasons, and he has also stopped defying his peripherals like he once did. Johan Santana is another pitcher who dealt with multiple injuries, although some of his lost value was salvaged by the fact that he put up a couple solid seasons before getting injured. And lastly, CC Sabathia's second contract (which he signed after he opted out of the first one) has not worked out well for the Yankees. After a good year in 2012, Sabathia has dealt with injuries and ineffectiveness over the last three years. He is still under contract for one more year, and it seems unlikely that he will be able to contribute in a major way for the Yankees next year.

There are also three contracts that I would call "moderate failures" at this point. The Kevin Brown contract, which was signed when I was five years old, is ancient history compared to most of the contracts on this list. The value he provided was about eight million short of what he was paid, and eight million certainly meant more ten years ago than it does today. In addition, the Homer Bailey contract is off to a pretty terrible start, as he posted one subpar season followed by a season lost due to Tommy John surgery. I would also consider the Justin Verlander contract to be a moderate failure at this point, even though he has provided a small amount of surplus value so far. Typically, these contracts work out when a player accumulates a lot of surplus value at the beginning of the contract to make up for the inevitable decline years at the back end of the contract. Verlander has not provided a lot of surplus value in the first three years of his contract, and he still has four more to go, with next year being his age 33 season.

That leaves nine of the seventeen contracts as at least moderate successes at this point in time. Two of the deals (Cliff Lee's and CC Sabathia's first) are now complete, and Zack Greinke just opted out of his as well. Cliff Lee's five year deal ended up working out well in the long run, even though he missed all of 2015 with an elbow injury. CC Sabathia's first contract was also a major success for the Yankees, as he produced $15.4 million in surplus value in seven years. (Sabathia opted out of his first contract after 2011, but I listed it in the table as the original seven year deal, since it represents the level of risk that the Yankees took on with Sabathia's original contract. As a result, the actual surplus value of Sabathia's first three years with the Yankees is much higher.) Greinke is now in a similar position as Sabathia four years ago, as he recently opted out of his deal after three years. In a way, this is actually good news for the Dodgers, because it means that Greinke was productive enough to turn down another three years at nearly $25 million per season.

While the other remaining contracts have yet to be completed, there are reasons to be optimistic about how they will look in the long run. Clayton Kershaw's deal has been a huge success so far, and Felix Hernandez and Cole Hamels have also built up a fair amount of surplus value so far on their respective deals. There may be reason to worry about Masahiro Tanaka given his elbow issues, but he is the youngest pitcher on this list, and he has a good chance of outperforming his deal if he is able to stay on the field. The last two pitchers, Max Scherzer and Jon Lester, are only one year into their respective contracts, but the early returns are good. They each made it through the year healthy, all while accumulating a good amount of surplus value.

My reason for doing this is to show that some of these contracts actually work out in the long run. Sure, there are a few catastrophic failures, but there are actually a good number of these contracts that turned out successful or are on the path to being successful. And while it is easy to focus on the few catastrophic failures and say that the risk is not worth the reward, it should be noted that some of the worst deals are also some of the oldest. The Mike Hampton and Kevin Brown deals are long over, and the Barry Zito and Johan Santana contracts expired two years ago. Perhaps teams are getting smarter about which pitchers they give their money to.

If the Cardinals do their research and feel like one of the elite pitchers on the free agent market is worth over $100 million (or perhaps $200 million in the case of David Price), then they should not hesitate to make a competitive offer. They must certainly take into account factors like age-based decline, peripherals, and injury risk, but they would be foolish to exclude an elite player from consideration simply because he comes with a high price tag.