Got a talented homegrown pitcher? Might want to hold on to that. Could be valuable someday.
Sound advice under any circumstances. And possibly growing sounder by the day.
Seemingly everyone wants controllable pitching this winter, and the asking prices reflect as much. You've probably heard the Chris Archer and Jose Quintana rumors. You certainly heard about the Chris Sale trade.
That was a big one, all right. The Chicago White Sox sent the remainder of the lefty ace's five-year contract to the Boston Red Sox for a four-player package headlined by MLB.com's No. 1 prospect, Yoan Moncada.
Jeff Sullivan of FanGraphs calculated that Sale has $84.5 million in surplus value on top of his remaining contract. Craig Edwards, also of FanGraphs, calculated that the White Sox actually got "something like" $100 million in surplus value.
Sale thus went for even more than his sticker price. It wouldn't be surprising if the same thing happened in trades of Quintana and Archer.
According to Nick Cafardo of the Boston Globe, the White Sox want "something similar" to what they got for Sale in a Quintana trade. That's not too big an ask given that he's one of baseball's best left-handers. And while Sale's contract controls him through 2019, Quintana's controls him through 2020.
Meanwhile, Marc Topkin of the Tampa Bay Times reported that the Tampa Bay Rays want even more for Archer than the White Sox got for Sale. Understandable, given that he's an elite strikeout artist with a contract that controls him through 2021.
Certainly, it's not just ability and controllability that netted a huge trade package for Sale and which could do the same for Quintana and Archer.
Including guaranteed years and options, Sale's, Quintana's and Archer's contracts owe them less than $40 million. Fair market value for elite starters (see Clayton Kershaw, Max Scherzer, David Price and Zack Greinke) is something like $30 million per year. You could say Sale, Quintana and Archer are making chump change, but even that's a stretch.
Of course, they can't be blamed for agreeing to their contracts in the first place.
They signed after they had established themselves as rising stars but before they were eligible for arbitration. They cashed in on their early success rather than risk their earning power disappearing on the road to free agency. Them being pitchers, said risk was real.
The impulse on the part of young starters to cash in ASAP isn't going away. Neither is the willingness on the part of teams to offer them the chance to do so.
For them, early extensions are a means to cost-control arbitration years and buy out free-agent years, which typically cover prime seasons in a pitcher's late 20s, at way-below-market rates. That's all the incentive teams need to pursue early extensions. Just within the last four years, this is how Sale, Quintana, Archer, Julio Teheran, Yordano Ventura and Corey Kluber got locked up.
The way things are now, though, teams must ask if they suddenly have an extra incentive to pursue early extensions for their homegrown arms. Are they worth it not just for controllability and cost-control purposes, but as a means to a major trade chip in the long term as well?
This depends on the huge demand for controllable starters having lasting power beyond the present, which is admittedly less than 100 percent guaranteed.
For one thing, there has indeed only been one major trade this winter. The asking prices for Quintana and Archer may be fair relative to that one trade, but for now, asking prices is all they are.
For another thing, there are special circumstances that contributed to the demand for Sale and which are now contributing to the demand for Quintana and Archer. Teams are always in search of top-of-the-rotation starters during the offseason, and it's never been a secret that this offseason offered none of those on the free-agent market.
The next two winters look less grim on this front. Jake Arrieta, Yu Darvish, Danny Duffy and Chris Tillman are slated for free agency after 2017. Kershaw, Price, Matt Harvey, Dallas Keuchel and Garrett Richards could all be free agents after 2018.
However, it's also not 100 percent guaranteed that the huge demand for controllable starters will dry up as soon as the free-agent market is stocked with arms again.
The presence of Price, Greinke and Johnny Cueto on last winter's market didn't stop the Atlanta Braves from making a killing in the Shelby Miller trade. He didn't even have a pre-arbitration extension, and yet the Braves still got a No. 1 pick (Dansby Swanson), a top pitching prospect (Aaron Blair) and a controllable outfielder (Ender Inciarte) for Miller's final four years of club control.
Without that trade to point to, the San Diego Padres might not have been able to swap two-and-a-half years of Drew Pomeranz for elite pitching prospect Anderson Espinoza over the summer. The Miller trade also looks like a prototype for the Sale trade.
Perhaps the Miller trade shifted the market for young, controllable starters on accident. Or, perhaps something like it was inevitable. Perhaps there's now an attitude that trading for cheap pitchers in their 20s is a better use of assets than signing expensive pitchers in their 30s.
Oh, there just might be. If we use fielding independent pitching—the most basic of the popular ERA estimators—as a measuring stick, we see that the performance gap between under-30 starters and over-30 starters has shifted in favor of the former since 2013:
The same effect appears when comparing xFIP and SIERA. Young pitchers have a clear edge these days.
And since it's been going on for four years, it looks more like a trend than a fluke. This could keep the demand for controllable starters cranked to 11, which could indeed be an extra excuse for teams to want to do early extensions.
The list of pitchers who could benefit is equal parts extensive and impressive. Set to qualify for arbitration in 2018 are Noah Syndergaard, Kyle Hendricks, Aaron Sanchez, Carlos Rodon and Robbie Ray. After 2019, Michael Fulmer, Lance McCullers, Steven Matz, Jon Gray and Vince Velasquez will be ready for their shots. After 2020, it will be Julio Urias, Alex Reyes, Blake Snell and Jameson Taillon.
That's a lot of candidates for pre-arbitration extensions. If for no other reasons than controllability and cost control, their teams should want to get them done.
The possibility of these contracts one day being worth a fortune on the trade market could now be the proverbial cherry on top.
Stats courtesy of Baseball-Reference.com and FanGraphs unless otherwise noted/linked.
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