Just weeks after the Marlins signed their power-hitting star Giancarlo Stanton to a 13-year, $325 million contract, they offered a six-year, $40 million deal to pitcher Jose Fernandez.
Fernandez is in a unique situation. He is one year removed from possibly the greatest season ever pitched by a 20 year old, and was lights out in his 51 innings this past season. However, he was injured for the majority of last season, and is scheduled to miss the first two months of this season recovering from Tommy John surgery.
Young players these days tend to sign team friendly contracts to have guaranteed money. For instance, Madison Bumgarner and Chris Sale, two of the top pitchers in baseball, are currently signed to six-year, $35 million, and five-year, $32.5 million contracts, respectively. They are also likely the two best pitching assets in baseball, since they each could probably earn $30 million a year if they were free agents. Still, both players secured their futures, locking up over $30 million of guaranteed money early in their careers. Players can only hit the free agent market after six years of service in the Major Leagues, so a young player has an incentive to accept a team-friendly deal, rather than having to wait through six full seasons before becoming a free agent.
Fernandez is extremely good. He may be the best pitcher in baseball this coming season, even though he will miss at least the first third of the season and may give more value to the Marlins than either Bumgarner or Sale provides to their teams. However, there is too much risk involved to lose out on a guaranteed $40 million. He can learn from the lesson provided by pitcher Brett Anderson. Anderson was once considered to be a shining young star on the cusp of greatness, but after spending time on the disabled list five different times before the age of 25, he has made just $20 million in his career. On Tuesday, two formerly hyped young pitchers, Kris Medlen and Brandon Beachy, were non-tendered by the Braves after missing all of last season due to injury. Both have made under $10 million in their dwindling careers.
Cherry picking a few examples is always easy to do to support an argument, but Jose Fernandez is susceptible to future injuries too. In 2013, Russell Carleton of Baseball Prospectus found that pitchers who have been injured before are eight times more likely than other pitchers to be injured again. Additionally, contracts within players’ first six seasons rely heavily on playing time. An injury is therefore detrimental to both short-term contracts and long-term potential to sign a large contract. Fernandez will have missed a full season by the time he comes back and by then he may not be the same pitcher he was before. He could miss out on many millions of dollars by signing a contract now, but if he never lasts a full season again, he will wish he had a safety net like Bumgarner and Sale do.
Think of it a different way: If Fernandez signs a $40 million contract with the Marlins, in the best case scenario, he would pitch excellently through his next six seasons and sign an exorbitant contract a few years after he would have had he not agreed to the extension. In the worst case, he flames out and makes $40 million guaranteed during a short career. If Fernandez does not sign the contract, in the best case, he will still earn an exorbitant amount of money. In the worst case, however, he will have virtually no life savings.
Ultimately the question is how big Fernandez’s next contract might be. Projecting Fernandez’s future production based on similar player performance (and thereafter estimating arbitration results), we should expect Fernandez to make roughly $25 million throughout his remaining four years under team control in the best case scenarios. Thereafter, it would not be especially surprising if he signs a contract on the free agent market worth $30 million per season. Therefore, in the best case scenarios, he would be missing out on roughly $45 million ($25 million + $30 million *2 – $40 million) over the next six seasons by signing the deal, and even then, he would likely be able to sign a contract worth more than $100 million directly after. This may seem like a small enough price sacrifice to have guaranteed money upfront. However, as Scott Boras, one of the toughest agents in baseball, represents Fernandez, it is very unlikely that Fernandez will agree to the lowball offer.
In the end, Fernandez may be a genius. Bumgarner and Sale would have looked like geniuses if they waited as well. However, for every Bumgarner or Sale, there’s a Brett Anderson or Brandon Beachy, and being financially set for life should be the first priority for a 22 year old like Fernandez.