The Under-Represented Middle Class of FA Pitchers

On Tuesday, Paul Maholm signed with the rival Cubs for $4.25M in 2012 with a $6.5M club option in 2013 ($500K buyout).  On the same day, Wei-Yin Chen signed with the Orioles for 3 years at a total cost of around $12M.  These two signings continued an interesting trend this offseason — the division of pitchers into only two categories.

The first category is the upper salary range pitchers and is very small:  CC Sabathia opted out and then re-upped with the Yankees for 5 years at $122M ($24.4M/yr), C.J. Wilson took a slight discount to play near his home and signed with the Angels for 5 years and $77.5M ($15.5M/yr), and Mark Buehrle signed with the Marlins for 4 years and $58M ($14.5M/yr).

The vast majority of the remaining starting pitchers have signed for between $4M and $6M/year, with most of the contracts only being 1 year and aside from Wei-Yin Chen no contracts longer than 2 years.  This trend was set early in the year, with Bruce Chen re-signing with the Royals for 2 yr/$9M, Chris Capuano to the Dodgers for 2 r/$10M, and Erik Bedard to the Pirates for 1 yr/$4.5M.  All signed at or before the Winter Meetings.

This has led to a depression in the price of starting pitchers and essentially locking in most of the remaining starting pitcher options.  Pitchers such as Jon Garland, Bartolo Colon, Jeff Francis, Rich Harden, Brad Penny, Joe Saunders, and Joel Piniero all figure to be in this zone of salary for 2012.

The only two remaining starting pitchers who will slot somewhere above $8M, but below $14M, are Hiroki Kuroda and Edwin Jackson.  Jackson’s agent, Scott Boras, has floated demands of a 5 year deal worth $85M, but with the market dynamics as they are it is unrealistic to expect him to get either the years or the average per year amount.  Kuroda is said to still be interested in staying in MLB, but there is always the lure to return to the Nippon Baseball League.  Kuroda hoped to stay with the Dodgers, but with their early free agency additions and a payroll figure depressed by the transitional nature of their ownership, they simply could not meet his salary.   There were talks of Kuroda to the Diamondbacks, but their rotation appears to be full, with young prospects clamoring at the gates to enter the rotation.

What are some of the potential reasons for this depression in salaries for starting pitchers this year?

1.  The crop is not that good — CC Sabathia was the cream of the crop and he was scooped (back) up by the Yankees early in the proceedings.  After that it was waiting to see where C.J. Wilson selected and then sift through the options of the mostly mid to back-of-the-rotation starters.

2.  The Yankees and Red Sox were not active in FA this year — The Yankees had one target and got Sabathia.  After that, even with a suspect rotation, they have stood pat.  The Yankees and Red Sox are not “out of money”, but it seems as if we have reached an inflection point in their respective payrolls.   The same is generally true of the Red Sox.  The Red Sox also seem to be re-trenching a bit after last year’s colossal meltdown.  With a new GM and new manager, it appears as if 2012 will be an evaluation year for Boston.  Both Cashman of the Yankees and Cherrington of the Red Sox appear to be willing to use their minor league system to fill holes at the major league level, rather than trade them for established veterans.

3.  Teams are thinking unconventionally to fill rotation spots —  The Red Sox are going to convert Daniel Bard back to a starter and bolster the relief corps with low cost alternatives (Mark Melancon and Andrew Bailey).  The Rangers are doing the same experiment with Neftali Feliz, as are the White Sox with Chris Sale.

4.  Tentpole franchises are in financial trouble — Both the Dodgers and the Mets have been on the sidelines this offseason while they each get their financial houses in order.  The Dodgers are searching for a new owner and the Mets are trying desperately to avoid bankruptcy.  This has taken 2 large players out of the game.  Coupled with the Red Sox and Yankees aforementioned pullbacks, it has not been a good market for free agents to procure multiple offers.

5.  Teams are waiting for the 2013 free agent class — Some of the potential starting pitchers options are much more appealing in next year’s class, such as Zack Greinke, Matt Cain,  and Cole Hamels.  There are also pitchers with options that may not get picked up such as Gavin Floyd, Ervin Santana, Dan Haren, and James Shields.  Of course some of these guys will not get to the free agent market, but the options are a little more appealing next year.  Don’t rule out Tim Lincecum being on the trade block, either, as he may price himself out of the Giants’ plans this offseason.

Also factor in that certain teams that typically are in the top third of spending, such as the Mariners, Cubs, and White Sox are all in the midst of re-building and you see the maelstrom of factors that have contributed to this downward pressure on starting pitcher salaries this offseason.  For the players and their agents, they can only hope that some of these factors change by the time November 2012 rolls around.

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Seems like a perfect time for a small market team like Pittsburgh to go out and get some value in regards to a starting pitchers for 1yr at 5mil or 2yr at 10mil…

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