Friday, February 8, 2013

How High Will Verlander's Contract Go?

By now, you've almost certainly heard that it's been reported Felix Hernandez is going to sign a seven year deal with the Mariners worth roughly $175 million. Any Tiger fan who hears that and knows Justin Verlander's contract situation is quickly going to wonder if that means the Tigers will soon sign Verlander to a similar extension.

After all, Felix Hernandez's contract situation was nearly identical to Verlander's before the extension. Both were two years from free agency. Both were owed nearly the same amount of money. The reason their contract situations are nearly identical is because they both came into the league at about the same time and back in 2010, they signed very similar five year extensions.

I think those deals back in 2010 were significant to viewing Verlander's current situation. When Felix and Justin signed deals within two weeks of each other, Verlander's contract was worth $2 million more. This despite the fact that Hernandez was three years younger and had by every measure other than wins and losses, outperformed Verlander to that point.

Don't believe me?

Verlander, 2005-9, 3.92 ERA, 840 IP, 80 HR, 282 BB, 746 K, 115 ERA+, 14.2 bWAR, 19.0 fWAR
Hernandez, 20059, 3.45 ERA, 905 IP, 80 HR, 287 BB, 810 K, 125 ERA+, 16.7 bWAR, 21.0 fWAR

I think there are a couple explanations for the Tigers giving Verlander more than what Hernandez had just received. I think they likely thought Verlander had not yet shown them his best work and I also think they wanted him to know nobody valued a pitcher more than the Tigers valued him.

Whatever the reasoning, the fact that they gave Verlander more when Hernandez had been better is not going to play well for them in this round of negotiations. Why? Look at their numbers since they signed their respective deals in 2010.

Verlander, 2010-12, 2.79 ERA, 713 IP, 57 HR, 188 BB, 708 K, 150 ERA+, 20.0 bWAR, 20.2 fWAR
Hernandez, 2010-12, 2.92 ERA, 715 IP, 50 HR, 193 BB, 677 K, 131 ERA+, 14.8 bWAR, 17.3 fWAR

I think it's just as clear Verlander has pitched better since the 2010 deals as it was Hernandez was better before them. So, if the Tigers gave Verlander a little more after Hernandez had been a little better, how much more are they going to give him after Verlander has been quite a bit better?

I've seen guesses like seven years, $210 million or even higher. Overall, there seems to be an over/under argument settling in at $200 million for a seven year deal. My personal feeling is that Verlander's deal is going to be a lot closer to Hernandez's than many people think. Verlander has pretty clearly been the better pitcher recently, but I don't see such a huge difference in performance that he can claim he's worth $5 million per year more.

I also think the three year's difference in age is more significant this time around. Think of this. Verlander is going into this season at 30 years old. Hernandez is basically going into this season at 27 years old (he turns 27 on April 8th). That means if both players sign seven year deals, each player's contract will include his age 30-33 seasons. The difference between the two is Hernandez's deal will also cover his age 27-29 seasons while Verlander's deal would cover his age 34-36 seasons. Which chunk would you rather have? I think the answer is clear for most and the difference in Hernandez's favor might eat up a lot of the perceived difference in their current values.

Look, I'm not pretending to have some privileged insight into this situation. Verlander might tell Dombrowski "I'd get $30 million per year in free agency and if you don't sign me for that now, I'll prove it in two years." The Tigers might flinch. I have no idea. But people seem to be looking at Verlander as this vastly superior pitcher to Hernandez who's going to blow Felix's deal out of the water. I'm just saying don't be so sure, and I think I've shown a decent argument for why.

I'll close with two guesses. My first guess is Verlander will have an extension done before he throws the season's first pitch. My second guess is his contract will be something like seven years, $190 million.

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