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Why older free agent pitchers may be a bargain

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What does recent history say about signing pitchers to long-term contracts? The answer may surprise you.

Ed Zurga

Hot Stove season is upon us, and despite a lesser number of superstars available on the free agent market this offseason, teams are gearing up to open their wallets to pay the top players available.

The trio of elite starting pitchers: Max Scherzer, Jon Lester, and James Shields, will certainly fetch a pretty penny, considering the significant drop in talent available behind them.  Each player is expected to sign a significant contract both in terms of dollars and years, to the tune of 5+ years and likely $100-million contracts.

While teams have recently shown a preference to increase dollars in lieu of years, it only takes one team to go above and beyond what the rest of the market expects to ink a player to a long-term commitment (see Robinson Cano). It would not be all that surprising if each player received a contract of 5+ years at a $20 million+ Average Annual Value (AAV). After evaluating similar previous deals, it appears as if it may, in fact, be worth it for teams to sign them to long, expensive deals.

To put into perspective how these contracts would compare to the most recent long-term pitching contracts, below is a chart detailing all 5+ year pitching contracts signed since 2008 (there were no such contracts signed in 2007).  The positive results from these contracts belie the criticism one hears when a team intends to sign a pitcher to an long-term deal of five or more years.

FA Walk Year Player Age (As a FA) Previous Team New Team Years Years Remaining Years Fulfilled Dollars Annual Average Value Cumulative Contract fWAR Cost Per Win
2013 Masahiro Tanaka 25 Japan Yankees 7 6 1 $155,000,000 $22,142,857 3.2 $6,919,643
2012 Zack Greinke 29 Angels Dodgers 6 4 2 $147,000,000 $24,500,000 6.8 $7,205,882
2012 Anibal Sanchez 28 Tigers Tigers 5 3 2 $80,000,000 $16,000,000 9.6 $3,333,333
2012 Hyun-Jin Ryu 25 Japan Dodgers 6 4 2 $36,000,000 $6,000,000 6.7 $1,791,045
2011 C.J. Wilson 30 Rangers Angels 5 2 3 $77,500,000 $15,500,000 5.8 $8,017,241
2011 Yu Darvish 25 Japan Rangers 6 3 3 $60,000,000 $10,000,000 13.9 $2,158,273
2010 Cliff Lee 32 Rangers Phillies 5 1 4 $120,000,000 $24,000,000 18.1 $5,303,867
2009 John Lackey* 31 Angels Red Sox 5 0 5 $82,500,000 $16,500,000 11.5 $7,173,913
2009 Aroldis Chapman 21 Cuba Reds 6 1 5 $30,250,000 $5,041,667 8.6 $2,931,202
2008 A.J. Burnett* 31 Blue Jays Yankees 5 0 5 $82,500,000 $16,500,000 13.3 $6,203,008
2008 CC Sabathia 28 Brewers Yankees 7 1 6 $161,000,000 $23,000,000 24.9 $5,542,169

*Traded Mid-Contract

Eleven pitchers since 2008 (in 2007 no free agent pitchers received 5+ year contracts) were signed to contracts of five or more years. The average cost per win for each of these pitchers is $5,143,598. Although the cost of a win is not static (current estimates of a cost of one Win Above Replacement is around $7 million), a shade over five million dollars for half a decade or more years of service from an ace can have a significantly positive return for a team, particularly if that player helps propel a team to the postseason.

The players with the most value on this list were international free agents when they signed their current deals; Hyun-Jin Ryu and Yu Darvish coming from Japan, and Aroldis Chapman defecting from Cuba. Each played was given a six-year commitment, and have proven to be extremely valuable (and relatively cheap) commodities for their respective teams. The Rangers have paid a shade over $2 million per win for Darvish, and the Dodgers got a steal signing Hyun-Jin Ryu over the first two years of his contract.

As far as domestic free agent signings, the story is much the same. In 2008, the Yankees inked CC Sabathia to a seven year contract, and to this point, have received good value, paying $5.5 million per win. Even if next season is a wash, and Sabathia has a 0 fWAR, the Yankees would have paid $6.4 million per win ----- still around market rate.

Anibal Sanchez has been a steal for the Tigers, costing Detroit $3.3 million per win, and although Zack Greinke has been more expensive than several others on this list, he has been a star in Los Angeles, and a fantastic complement behind Clayton Kershaw.

This is all well and good when talking about pitchers in their mid-20s, but how did teams fare when signing players on the ‘wrong side of 30'?  Turns out, it the contracts were a slightly lesser value than the younger players (no surprise there) but teams did not end up with albatross contracts for any aging pitcher one may expect.

FA Walk Year Player Age (As a FA) Previous Team New Team Years Years Remaining Years Fulfilled Dollars Annual Average Value Cumulative Contract fWAR Cost Per Win
2010 Cliff Lee 32 Rangers Phillies 5 1 4 $120,000,000 $24,000,000 18.1 $5,303,867
2009 John Lackey* 31 Angels Red Sox 5 0 5 $82,500,000 $16,500,000 11.5 $7,173,913
2008 A.J. Burnett* 31 Blue Jays Yankees 5 0 5 $82,500,000 $16,500,000 13.3 $6,203,008
2011 C.J. Wilson 30 Rangers Angels 5 2 3 $77,500,000 $15,500,000 5.8 $8,017,241

Signing with the Phillies at the age of 32 in 2010, Cliff Lee is the oldest free agent to sign a deal of five or more years over the past decade. Despite recent health woes, Lee has already amassed over 18 fWAR ----- costing the Phillies $5.3 million per win to this point. Next year may be a question mark for Lee, as it relates to health, but to this point, he has been an excellent value for Philadelphia both in the regular season, and the postseason, and even if he provides minimal value to the Phillies this year, the contract will hardly be viewed as a bust. Had Ruben Amaro traded Lee before the injury bug hit Lee, it would have been a coup for the Phillies.

A.J. Burnett and John Lackey present interesting cases, as both players were traded mid-deal. Despite missing an entire season, Lackey still managed 13.3 fWAR. He cost the Red Sox and Cardinals just over $7 million, just above market rate, while also enacting a contract clause stipulating he would pitch in 2015 for league minimum because of missed time due to injury (whether or not that will come to fruition is irrelevant, as he is contractually obligated if the team chooses). Burnett generated nearly 13.5 fWAR, costing the Yankees (mostly) about $6 million per win, before being traded to the Pirates, and helping them get to Pirates within one win of the NLCS in 2013.

C.J. Wilson is the most expensive example of signing an aged pitcher to significant tenure, costing the Angels $8 million per win. He was 30 when the Angels signed him to a long-term deal, however, if one considered his walk year with the Rangers in 2011 as more of an outlier than true talent, it was the process of evaluation that was incorrect and not the terms of the contract in and of itself.

Both Scherzer and Lester turned 30 this year, and James Shields is 32. We have numerous examples of teams investing heavily in pitchers (young and older), given them five to seven year deals, and committing significant money. Most, if not all of these contracts have worked out well for teams, and although some have ended questionably, the value provided at the beginning of the deals have made them worth it, especially when considering the contracts are occasionally tradeable, providing some new value on the back end.

Teams should not let the back-end of the contract stand in the way of the significant value and reliability of the front end of the deal. Particularly as it relates to Scherzer and Lester, any team that can compete in the next two to three years should consider opening their pocketbooks for a reliable ace and reap the rewards. Not every deal will work out, but the recent history of long, expensive free agent pitching contracts is downright encouraging. In the age where a marginal true-talent team can win the wildcard, and get to, or win the World Series, it is all the more reason to pay these three starters.

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All statistics courtesy of Fangraphs and ESPN Free Agent Tracker

Steven Martano is a contributing writer at Beyond the Box Score. You can follow him on Twitter at @SMartano.