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January 16, 2014

Transaction Analysis

Clayton Kershaw Predictably Makes the Most Money

by Ben Lindbergh

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LOS ANGELES DODGERS
Team Audit | Player Cards | Depth Chart

Signed LHP Clayton Kershaw to a seven year, $215 million extension with the ability to opt out after five. [1/15]

In a move that shocked no one, baseball’s biggest spenders have turned the game’s best pitcher into its highest-paid pitcher. The most surprising thing about Clayton Kershaw’s new contract is that the Dodgers didn’t get it done sooner.

Teams in need of pitching have spent much of the winter putting the best available MLB pitchers’ agents on hold while waiting to see whether Masahiro Tanaka would return their calls. Such is the appeal of a successful mid-20s starter in a market mostly made up of over-30 arms, even one with a posting fee, a worrisome workload, a possibly flat fastball, and no MLB experience. Kershaw is only 227 days older than Tanaka, and he more than makes up for the age difference with superior stuff, a nearly perfect health history, two well-deserved Cy Young wins, and an admirable fondness for orphans. It’s almost impossible to conceive of what a pitcher worth more on the open market would look like.

You can make a strong argument that Kershaw is the most accomplished 25-year-old pitcher of the past century. This is that argument, boiled down to one table:

Name

Age-25 Season

IP

ERA+

Walter Johnson

1913

2070.1

176

Smoky Joe Wood

1915

1416.0

150

Clayton Kershaw

2013

1180.0

146

Tom Seaver

1970

1093.0

141

Roger Clemens

1988

1031.1

141

Those are the best ERA+ marks among pitchers with a minimum of 1,000 innings pitched through age 25. The last time a young pitcher made the league look this silly, the Lusitania was still sailing. In an era of enlightened pitcher usage, Kershaw hasn’t had the opportunity to add as much value as a number of young pitchers who were worked harder early on. But inning for inning, there’s been no one better.

The only argument against doing a long-term deal with Kershaw is the one we always trot out: pitchers are risky, so signing them to long-term deals is dangerous. There’s something to be said for that argument. Ten years ago, five of the top 10 pitchers by WARP were 25 or under:

Name

Age

WARP

Ben Sheets

25

6.5

Oliver Perez

22

5.3

Johan Santana

25

5.1

Carlos Zambrano

23

5.0

Jake Peavy

23

4.7

Signing any one of them to a long-term extension might have seemed like a good idea at the time. Three of them were never as good again, and the other two (Santana and Peavy) have combined for 825 DL days. Go back half as far, to 2009, and again you’ll find five 25-years-old in the top 10:

Name

Age

WARP

Zack Greinke

25

7.3

Tim Lincecum

25

5.4

Josh Johnson

25

5.4

Ubaldo Jimenez

25

4.9

Jon Lester

25

4.8

Not one of them has had a season since that was worth as much, though some have still been quite valuable. Kershaw, to this point, has been better than all of them, as that top table showed. But as dominant as he’s seemed, he’s not actually invulnerable. The likeliest outcome is that he’ll continue to be great, if slightly less so, but there’s still some chance that he could be Brandon Webb. Memento mori.

Two of the top predictors of pitcher health are previous injury history and age. Kershaw has never been on the disabled list, and he won’t turn 26 for another two months, so he seems like a safe bet so far. A third predictor is pitches thrown, and there he seems slightly scarier: Baseball-Reference tracks pitch counts back to 2000, and in that time, only Felix Hernandez and CC Sabathia have thrown more than Kershaw’s 18,643 pitches through age 25.

This all seems sort of circular: Kershaw has avoided the DL, which suggests that he’s more likely to stay healthy, but because he hasn’t been hurt, he’s been able to pitch more, which suggests that he’s less likely to stay healthy. Either way, he can’t win. Of course, we’re mostly flailing in the dark when we project pitcher injuries, so as long as Kershaw had no bones sticking out through his skin, someone was going to sign him to a huge contract if the Dodgers didn’t. Because of his history with Los Angeles and the likelihood that the team will keep contending, he’s worth as much in LA as he would have been anywhere else. And should disaster strike, the Dodgers have the deep pockets to survive the sunk cost.

And while it sounds strange to say it, considering that Kershaw will be making more per season than any previous player, that cost could have been higher. Last March, Justin Verlander signed a five-year extension that will pay him $28 million per year from his age-32-36 seasons. That contract, which at the time promised to pay him more per year than any other pitcher, came when he was 30, and two seasons away from free agency. Kershaw’s, for just $2 million more in AAV, comes when he’s about to turn 26, and only one season away from free agency, leaving him with less incentive to play it safe. In light of his age, his past and projected performance, and the going rate for wins this winter, Kershaw could have held out for more and gotten it, either now from Ned Colletti or later, had he hit the open market intact.

The contract he did get includes an opt-out clause that can be exercised in five years, at which point Kershaw will be as old as Verlander is now. Unless he gets hurt or declines significantly, he’ll trigger that clause and cash in again, so for Kershaw, this is just the contract before the contract. The Dodgers, meanwhile, get a short-term discount and escape the back-end risk that would have come with one of the 10-12-year proposals the two sides discussed. And because they got the deal done before arbitration, the Dodgers don’t have to tell Kershaw why he isn’t worth whatever he would have filed for, which could have hurt his feelings and made him more likely to leave. The sort of person who can’t cotton to the idea of athletes making millions will see this extension as another sign of a screwed-up system. But in the industry context, this isn’t an overpay; it’s just another player getting paid what a revenue-rich market will bear.

Ben Lindbergh is an author of Baseball Prospectus. 
Click here to see Ben's other articles. You can contact Ben by clicking here

Related Content:  Los Angeles Dodgers,  Clayton Kershaw

11 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links

mblthd

Zito WAR over 7 years prior to signing big contract = 31
Zito WAR over 7 years after signing big contract = 3

Kershaw WAR over 6 years prior to signing big contract = 32
Kershaw WAR over 7 years after signing big contract = ???

Jan 16, 2014 06:40 AM
rating: -1
 
Bryan Cole

Eh.

Zito WAR over 3 years prior to signing big contract = 11
Zito ERA+ over 3 years prior to signing big contract = 110

Kershaw WAR over 3 years prior to signing big contract = 21
Kershaw ERA+ over 3 years prior to signing big contract = 166

Jan 16, 2014 07:32 AM
rating: 4
 
mblthd

I love watching Kershaw pitch and hope he does well, and he's certainly done more at this stage in his career than Zito had through 2006. I only look to Zito in that we can't say we've never seen a relatively effective pitcher sign a big contract and almost immediately become a relatively ineffective pitcher.

There's a pretty big mental component to pitching (just ask Rick Ankiel) and Zito has acknowledged that the contract and ensuing scrutiny messed with his head. I don't for one second think Kershaw will take a "well I made my money now I can just phone it in and not try anymore" attitude - I certainly don't think Zito did - but there is a psychological element to a major event like a contract of this size. Maybe it was the opposite attitude, "they gave me this big contract and now I have to try really hard and show them I deserve it" or whatever, I have no idea.

Whatever the case may be, I hope Kershaw keeps on trucking because it's fun to watch, but if he suffers a dramatic and sudden decrease in effectiveness after having signed the big contract, it wouldn't be the first time that happened.

Jan 16, 2014 08:34 AM
rating: 0
 
PaddyE

To many of us in the Bay Area, the Giants signing of Zito to such a large & long contract was a head scratcher from the git-go. His decline in the 2-3 years preceding the signing was obvious, and while we didn't expect him to be quite so terrible, we didn't think he was close to worth that deal.

Kershaw otoh is showing no such signs of decline. The Zito & Kershaw cases aren't analogous. I wish they were--I'm a Giants fan...

Jan 16, 2014 12:57 PM
rating: 4
 
mblthd

If the contract messes with Kershaw's head and thus diminishes his effectiveness... I'm hoping it doesn't and I don't think it will, but if it does, then the cases will be analogous.

Jan 16, 2014 15:31 PM
rating: -1
 
jfribley

That and Zito's xFIPs were always a trainwreck waiting to happen with BABIPs that were just itching to regress.

Jan 16, 2014 12:24 PM
rating: 3
 
bline24

I can't understand why a team would ever agree to a player-only optional opt out on one of these long term contracts. It effectively transfers ALL of the back end risk to the club. Either Kershaw meets or exceeds expectations during the first 5 years (a la A-Rod circa 2001-2007) and opts out (best case scenario) or he melts down or breaks down like Zito or Sanatana and the Dodgers are left holding the bag. The odds of a goldilocks scenario where he pitches well enough to deserve the $30m/year but not so well that his agent advises him to opt out seem vanishingly small. Is this just another case of a GM trying to win now and figuring that in 5 years it will be someone else's problem?

Jan 16, 2014 09:35 AM
rating: 2
 
Shkspr

Keep in mind you do have five years to anticipate and plan for mitigating that risk. Basically, if the player gets injured, you have insurance in place to recoup your cost. If you're looking at ineffectiveness, bear in mind that in 2018, the cost of a win will probably be around $8-10 million, so if Kershaw retains even half his effectiveness by then, or if he retains his current effectiveness for just the next three years, then the Dodgers will have gotten enough of their money's worth to be able to eat the remainder to ship him out - remember, he doesn't have a no-trade clause, and any scenario where he's traded for ineffectiveness probably means the receiving team is not too concerned about him opting out of the rest of his deal. Plus, in a pinch, as long as they don't go crazy dealing out these type of contracts, the Dodgers are one of the few teams that can shrug and go "$60 million? Oh, well." It's not as if they never gave Darren Dreifort a contract.

So, the risk for the Dodgers is actually concentrated at the front of the deal, because the only way they really get screwed is if Kershaw does indeed go Zito on the league, and as the article posits, that risk is probably less than for any other similar pitcher in memory.

Jan 16, 2014 11:32 AM
rating: 0
 
bline24

Ah. I think you caught the bit that I missed: insurance.

Jan 16, 2014 12:02 PM
rating: 0
 
quackman

An additional reason for a player option like this is to make it a more appealing contract to the player. Just like additional money or a no-trade clause it's a perk to get the player's autograph on the contract.

Jan 17, 2014 11:03 AM
rating: 0
 
dREaDS Fan

You start down the right path in looking at cumulative stats thru Age 25 ... but then say "the only argument against doing a long-term deal with Kershaw" is one in which you cherry pick pitchers who at age 25 have SINGLE YEAR stellar performances.

Why lower the sample bar that way?

Why not look at what the Johnson / Seaver / Clemens crowd did over their collective 7 seasons post age-25? Isn't that we should be looking at?

If the Johnson / Seaver / Clemens sample set falls apart after age 25, well then there's a cautionary note.

Jan 16, 2014 14:40 PM
rating: 2
 
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