Unless the New York Yankees can add around $20 million to their 2014 roster, the Los Angeles Dodgers will have the highest payroll come Opening Day. Operating around $221 million, the Dodgers can seemingly sign whomever they desire. Be that as it may though, last week, the Dodgers proved they were still capable of making budget-friendly decisions with the signing of lefty, Paul Maholm.
The contract is a one year deal, guarantying $1.5 million with up to $5 million in incentive-based performance in the form of a point system. The way the point system is constructed is as follows: 2 points for each game started, 1.5 points for each relief appearance of 2 innings or more and 1 point for each relief appearance of less than 2 innings. The exact monetary value matched with its equivalent point total is still unknown. What we do know is up to 60 points can be earned, and in that case, Maholm would earn the full $5 million incentive.
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First off, the point system idea is pretty nifty in general. This has to be one of, if not the first, contract that has something along these lines that I can recall. However, the best part about this point system setup is there are benefits for both parties. For the Dodgers, they minimize their risk by creating this incentive-laden deal all while adding precious depth in the process. To boot, incentivizing the deal could push Maholm to excel more so than he otherwise would have, at least on paper (pure speculation on my part). As for Maholm, this option might have proven to be the most lucrative one available. We can’t know for sure, but it’s entirely possible he traded guaranteed money for the opportunity and risk of speculative money.
Which raises my second point: if this was or was close to the best Maholm could do, the market might have seriously underrated him. Here are Maholm’s 2013 numbers compared to other free agent soft tossers.
While Maholm certainly doesn’t standout in any particular way, he blends in well with the group. In other words, he seems at least be around the same talent level as the rest of the pitchers above. Despite this, he received the smallest contract by far. The next closest was Dan Haren’s 1-year, $10 million deal. The largest contract of the group was Jason Vargas’ 4-year, $32 million contract, but based on their 2013 numbers, Vargas and Maholm are nearly identical. And if we look at their entire careers, dating back to 2005, Maholm has an edge.
Perhaps you think that’s going too far back, so we’ll look at dating back to 2010.
Maholm’s edge has decreased but he's still very comparable and ahead in most cases. So what gives? Why is there a $30.5 million difference between the two? The most logical conclusion is teams were scared off by Maholm’s second half, in which he posted a 5.73 ERA complete with with ugly peripherals. Whatever the reason might be, the Dodgers exploited what could be one of the biggest market inefficiencies this offseason.
This deal gives them another starting pitcher to add to their gluttony, while minimizing their risk to do so. If Maholm is healthy and effective, they’ve added themselves a solid starter for pennies. Pitchers are fickle beings; what looks on paper to be one of the better rotations in the NL is only a serious injury away from being deflated. Small gains and depth such as this go a long way in protecting the club and adding marginal wins. Maholm’s signing isn’t the most dazzling move of the offseason, but it certainly is a good one.
All statistics courtesy of FanGraphs and Cot's Contracts.
Anthony Joshi-Pawlowic is a contributing writer at Beyond the Box Score. You can follow him on Twitter at @AJP13237.