The Yankees and young starter Luis Severino made headlines on Friday when the two sides agreed to a contract extension. As Jeff Passan of ESPN first reported, it’s a four-year, $40 million deal with a fifth year club option.
Severino’s deal — which covers all four of his arbitration years and gives the Yankees control over one free agent year — is awfully similar to a contract just signed two days prior, when the Phillies and Aaron Nola agreed to a new deal.
Our own Kenny Kelly discussed the implications of Nola’s deal and what it means in the context of the free agent market, and a lot of what he wrote about Nola’s deal still rings true when applied to Severino’s.
Perhaps Kelly’s comments in regards to a potential work stoppage apply even more to Severino’s deal than they do to Nola’s. Just look at how Severino’s contract is broken down:
Breakdown of Luis Severino's deal, per source:— Jeff Passan (@JeffPassan) February 15, 2019
2019: $4M+$2M bonus
2023 (club option): $15M with $2.75M buyout
Interesting part of that: higher salaries in '20 and '21, lower than usual in '22. Why? Protection against a work stoppage.
Severino is one of the best pitchers in baseball. In 2018, his 5.7 fWAR ranked seventh in the majors, and he’s been named to each of the past two All-Star Games.
The benefits for him to take a deal like this, though, are still there. Like in the case with Nola, Severino has dealt with injuries in the past and, regardless of how his future in baseball progresses, he is guaranteed the life-changing $40 million.
Plus, there’s an argument to be made that Severino came out better than Nola, even despite the lesser salary. Under this new deal, assuming the Yankees exercise their option, Severino will become a free agent heading into his age-30 season. Nola, meanwhile, won’t become a free agent until age 31, again assuming the Phillies exercise their option. Yes, it is just a one-year difference, but every advantage counts. Effectively, Nola is only being guaranteed $5 million more (he’ll make more than that if the option is exercised) to give up another free agent year. Severino will certainly make up the difference in his first year of free agency, one would think.
Still, these points could be moot depending on what the next CBA looks like and whether or not there is a work stoppage. Both players had to have kept that in mind during their negotiations.
Nola comparisons aside, this is a great deal for the Yankees. While Severino was projected to earn $5.1 million in arbitration and will instead earn $6 million, his arbitration years seem to be at a discount overall. As a rough comparison, David Price earned a total of $48.2 million in arbitration from from 2012 to 2015. It’s hard to know how much Severino would have earned through arbitration, but, at this pace, it would likely have surpassed Price’s sum when considering inflation alone.
Plus, the Yankees also control Severino’s first free agent year at just $15 million. The pitching free agent market is still an uncertainty overall, but it appears that — again assuming he does not decline — Severino would have earned much more than that. That, unfortunately for him, is the cost of financial security.
Regardless, Severino’s deal just tells us more of the same story: players are recognizing that free agency is not as lucrative as it used to be, and many are opting for long-term financial security while sacrificing future potential earnings.
Devan Fink is a Featured Writer for Beyond The Box Score. You can follow him on Twitter @DevanFink.