By Marc Normandin
Clayton Kershaw is the new owner of a seven-year, $215 million contract that makes him the highest-paid pitcher ever, both annually and in total salary. It's also the exclamation point on what has been, in essence, the era of enormous pitcher contracts. It hasn't even happened because of free agency, either: Teams are locking up their aces before they can hit the open market, and are still managing to pay record sums to retain them.
That's not a bad thing. MLB teams are making record amounts of money, and unlike some professional leagues who will remain nameless (but are currently hosting their playoffs if you need a hint), Major League Baseball actually shares its financial success with its players, and on guaranteed contracts, even. The teams keep their top players, and the players get compensated for it. It's a good system!
Of course, it's only a good system if the players actually perform. We're too early into all of these contracts to know if that's going to happen, and it's difficult to look backward in history at past major pitcher contracts, because they just don't compare. Mike Hampton's seven-year deal with the Rockies, which seemed so enormous in 2001 when it was the largest ever handed to a pitcher, was for $121 million: it currently ranks as the 36th-largest deal ever. It didn't exist at a time when MLBAM was as successful as it is now, or when national television revenues -- and regional television revenues -- were exploding as they are now: it's tough to just compare to the past to attempt to inform the future, because even if things go awry for any of these pitchers as they did for Hampton, we're living in a different universe entirely from a monetary perspective.
What we're dealing with is the new generation of pitcher compensation. Lucrative long-term deals are still risky, especially for teams that would prefer not to bump up against the luxury tax threshold, but for teams willing to take that risk, the financial cushion of the modern game makes retaining pitching attractive. This is especially true under the new collective bargaining agreement, where draft picks are more difficult to come by and draft spending is limited: Innings have to be pitched by someone, and money has to be spent somewhere, so why not on Kershaw and his ilk?
This didn't start with Kershaw, as previously mentioned. CC Sabathia was the genesis of this, as he opted out of his contract with the Yankees after the 2011 season, and negotiated a new deal for five years and $122 million that added an additional, higher-paying season to the end of his deal, as well as a vesting option for $25 million in 2017 that will vest so long as Sabathia is regularly on the mound in 2016. The Yankees could have let Sabathia walk after his opt-out, but he had just posted a 143 ERA+ over 237 innings, and they hadn't added on that much to the deal that wasn't already in place. They added risk, sure, but pitching -- as the current Yankees' rotation should remind -- is at a premium, and they didn't want to be left without it.
The plan seemed temporarily problematic when Sabathia struggled in 2013 at the same time the Yankees were suddenly averse to spending, but if the plan to be under the $189 million luxury tax threshold is truly dead, then it barely matters what the Yankees are paying Sabathia, because they can afford it. Like the Dodgers with Kershaw -- the Dodgers whose payroll currently dwarfs that of the Yankees, by the way -- so long as the team is willing to keep spending, it can afford these risks, and should use that advantage over the teams who will not or cannot do the same.
The Giants are aware of this. They locked up Matt Cain in 2012 to a six-year, $127.5 million deal with an option, but they didn't pocket the Barry Zito contract once it ran out to make up for it. They re-signed Tim Lincecum to a lucrative short-term deal in order to avoid dipping into the free-agent market too much, and when they did, they came back with Tim Hudson on a similar short-term, but well-paying, contract. You don't even have to be one of the richest teams in baseball to pull off this sort of long-term pitcher contract anymore: You just need to be well off enough that it won't keep you from doing whatever else you need.
The Phillies are one of the richest clubs in the game, and that was before they inked a new television deal that will pay them $2.5 billion over the next 25 years. That's how they knew that locking up lefty Cole Hamels to a six-year, $144 million deal with an option for a seventh season made sense for them, because they could afford it. The numbers were well-considered, too, as the Dodgers ended up agreeing with Zack Greinke for similar terms prior to the 2013 season.
All of these deals are comparatively tiny next to the trio of contracts that are at or approaching $200 million, though. Kershaw, Felix Hernandez and Justin Verlander were all set to hit free agency after the 2014 season, but now, they're all locked up long-term. Hernandez signed an extension with the Mariners in February of last year that will pay him $175 million over seven years -- for all of a month, it was the largest contract ever given to a pitcher. Then Verlander agreed to a seven-year, $180 million contract that also had a $20 million vesting option for 2020, making it a possible $200 million contract. Less than a year later, Kershaw comes along and gets $215 million guaranteed, and, like Greinke might do and Sabathia already did, can even opt-out of the deal at some point to set himself up for a second massive payday.
You're right to think these contracts are a little nutty, because pitchers are no less risky, inherently, than they were over the last decade when Hampton, Zito and Johan Santana all signed massive deals. The context surrounding these signings has changed, though, and makes it easier for teams willing to take these risks to absorb them. We've also been shown that no contract is immovable, either: Carl Crawford was dealt with five years and $108 million left on his deal because the Dodgers wanted the Red Sox' first baseman, and at a time when Crawford was dealing with Tommy John surgery. Vernon Wells was sent packing to the Angels in a shocking twist that was topped only by a second trade to the Yankees. The Tigers just dealt what could be the problematic years of Prince Fielder's nine-year, $214 million contract and received a high-quality second baseman, Ian Kinsler, in return. There is just an unfathomable amount of money in the game right now, and teams are willing to use it rather than pocket it in order to get ahead. It might not guarantee that Kershaw, Verlander, King Felix and the rest will stay healthy for the length of a long-term deal, but knowing the money is there to help if needed, it's easier to take those shots now than it ever was.
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Marc Normandin writes and edits for Over the Monster, a Boston Red Sox blog, as well as SB Nation's baseball hub. He's one of many behind the e-book "The Hall of Nearly Great," and has written for BaseballProspectus, ESPN, and others. You can follow him on Twitter at @Marc_Normandin.