A year ago in these pages, I wondered if the Tigers should extend Max Scherzer. When it came down to it, I thought they should let him walk unless he was willing to take a significant discount. He didn’t, they let him walk, and Max got a boatload of dough from the Nationals. My basic case against an extension for Max was pretty simple. He was going to get at least 6/$150M (and had a good chance at more) and pitchers in their 30s are rarely worth that kind of money. Now, I probably underestimated the salary inflation we saw over the last year so if I had known a little more about the future, I’d have been cool at $150M, but not cool at the price he wound up getting. Same basic premise.
Max was unlikely to live up to the cost he was likely to command. We now know his cost, and we’ll have to see if he earns it or not. But a year later, the Tigers find themselves in a very similar situation. David Price will be a Tiger for one more year and then he’ll be a free agent entering his age 30 season. Should they look to extend him?
Price is making $20 million in 2015 and is coming off a 6 WAR year. Prior to that, he had four straight seasons of around 4 WAR, so there’s a clear sense that he and Scherzer will be hitting the market with pretty similar resumes. Price has a slightly longer history of great performance, but that comes with more innings (and more wear and tear). If we assume Price has another 5 WAR kind of year, and I think we should, then he will arrive at free agency under very similar conditions. Although he’s a lefty, so maybe we’ll see a slight premium.
So let’s figure out what we think Price will cost on the open market and see if it makes sense for the Tigers to pay that. Let’s say he’s going to get 7 years. Scherzer just got $30 million per season, but some of that was deferred money, so it’s more like $26 million if you care about the value over 7 years. Lester got right around there per year for six years. Basic inflation probably bumps that up to $27 million or so starting next year.
That’s 7 years, $189 million. If he doesn’t do the Scherzer deferment thing, we can probably say 7 years, $180-$200 million is the contract he’ll sign with another Price-like season. There are some quality names on the market next year, but Scherzer had Shields and Lester as well.
If you think Price is better than Lester and Scherzer, use 7/$200M. If he’s on par, it’s 7/$185M. Let’s call it 7/$190M just for the sake of only using one number. That’s what Price will make if things go according to plan. While Price seems open to an extension, there’s no indication he’s in love with Detroit and would give a major discount to stay. However, let’s assume he would be willing to offset the risk of the 2015 season by giving the Tigers a chance to start this extension in 2015. In other words, Price will sign with the Tigers for 7/$190M starting this year while every other team would sign him for 7/$190M starting next year. That’s the “hometown” discount we’ll apply.
Alright, let’s see what we think.
The cost of a win on the free agent market is somewhere in the $7 million range right now, but it might easily be $7.5 million by the time 2016 rolls around. This value is an estimate, but it’s a pretty good one, and the reason we use it is because if the Tigers chose not to sign Price they would have a pile of money they could then use on the free agent market, and they could buy wins at that price, more or less. In general, it’s a good guide, but don’t take it as gospel.
So the Tigers are already on the hook for 1/$20M, meaning we care about Price’s age 30-35 seasons and a 6 year, $170 million contract.
To earn that deal at the market rate ($7.5M/WAR), Price needs to provide the Tigers with 23 WAR over the life of those 6 years. That comes out to 3.8 WAR per season, which doesn’t seem like a lot. After all, Price has five straight seasons at that mark. But we have to assume that Price is going to get worse into his 30s because almost every pitcher does. It probably won’t be a cliff, but he will not continue to be an ace indefinitely.
Let’s try this a few ways. Let’s assume Price is a 6 WAR pitcher for 2015. That’s his starting point. A typical aging curve for a 30+ pitcher subtracts half a win per year. So that means over 2016-2021, Price would be worth 25.5 WAR! So if you believe in him as a 6 WAR starter right now and you believe in normal aging, this is a deal that can totally work for the Tigers.
But now let’s say he’s a 5 WAR starter in 2015. Then Price comes out at 19.5 WAR. If he’s a 4 WAR starter in 2015, he comes out at 13.5 WAR. Now we’re getting dicey. If he’s a 6 WAR starter now, he’s worth $180 million during this $170 million deal. Awesome. If he’s a 5 WAR starter, he’s worth $146 million. If he’s a 4 WAR starter he’s worth $101 million.
So one important factor here is determining how good you think Price is right now. That’s a projection question and an open question. There is evidence that supports a range of outcomes between 4-6 WAR and I can’t fault a team for taking either end of the spectrum. Evaluating pitchers is tough.
But now let’s say the Tigers are very motivated to keep Price because he can keep them contending at a higher level that they can without him. Let’s say they are very committed to going for it every year and can afford to pay more than average for Price because they think he’s truly the best available pitcher whom they could sign for those 6 years. That’s not an approach I would take when deciding to sign Price, but it’s a valid approach. So let’s say the Tigers are willing to pay $9 million per win. They are all in and their owner is old. Anything above $9 million starts to get a little silly because they’re actively ignoring a cheaper version of the same wins, but $1.5 million above market price seems like a good enough margin of error.
Let’s walk through those values again (cost of $170 million, assume $9M/WAR)
- 6 WAR pitcher, Tigers value at $230 million
- 5 WAR pitcher, Tigers value at $175 million
- 4 WAR pitcher, Tigers value at $120 million
At the market rate, you have to buy Price as a 6 WAR pitcher to want to sign him. If the Tigers really don’t care about efficiency, you can sign him at 5 WAR. There’s plenty of margin for error on these estimates, but not enough to like any of the other options.
So should the Tigers do it?
I cautiously recommend that they should. It’s not going to be a good value, but there’s a pretty decent chance it winds up working out fine. It’s not unreasonable to think he might currently be a 6 WAR pitcher and if he is, this contract can work out just fine. If you think he’s a 5 WAR pitcher, it doesn’t take much to smear the numbers into looking just fine. The Tigers aren’t afraid to spend a little extra money for sexy names (something I often chastise), but for a small premium, it’s not a big deal.
But if you think he’s a 4 WAR pitcher, this isn’t going to work out well. There’s no scenario in which the Tigers aren’t wasting a huge sum of money.
So what’s the difference between Scherzer and Price? Why did I recommend no on Max and yes on David? Three really important things happened between last December and today.
First, the Tigers extended Miguel Cabrera. The deal was way too much to pay for Cabrera, not because he isn’t good, but because no one was going to pay more when he hit FA. But that deal signaled the Tigers have no real interest in being a cost effective team and they also care way more about the short term future than they do about the long term future.
The Victor Martinez contract said the same thing. The Tigers want 2015-2016 wins really badly and damn the 2019-2020 team.
But we kind of knew this about the Tigers already. The kicker was when they traded Rick Porcello, because my entire Scherzer philosophy was predicated on the team extending Porcello. If the Tigers had Verlander-Sanchez-Porcello locked up, I wouldn’t be so keen on investing in a Price (or a Scherzer). But without Porcello, the Tigers have a serious long term hole in the rotation. Sanchez is good and cost effective, but he’s not a model of health. Verlander could still be great, but the signs are starting to point toward just being solid. Shane Greene has potential, but with no top end pitching talent on the farm, there’s a vacancy or two.
If the Tigers want to really contend for the next few seasons, they need another top level starting pitcher. It can be someone from outside the organization or it can be Price. Either is fine, I’m not partial to “guys we know,” but I don’t see an obvious way to acquire an elite pitcher via trade given the club’s circumstances. Never count out Dave on that front, but acquiring a great arm under team control is hard.
So it’s Price or a free agent, and there’s no reason to adore a particular free agent over Price…except maybe for Strasburg, who would be around a year too late. Greinke, Cueto, and Zimmermann are all very good, but none of them are a tier above Price.
Which is why I’d support a Price extension. I don’t think it’s a necessity. I don’t think he’s too good to let walk. But the Tigers need a pitcher of his caliber into the future and he’s going to come at a discount, however small.
The Tigers have a way of doing things. Sometimes it drives me crazy and sometimes it’s great. They eschew depth and cost controlled talent and it bites them pretty often. But they’re not afraid to spend money and don’t let a few million get in the way of a player they like. I can’t really see a justification for not seriously pursuing a Porcello extension over the last two years, but I also know they aren’t going to get down to the final hour of a negotiation and walk away from the table because of pennies.
The Tigers and I don’t always like the same kind of players, but when they like a player, I love the way they pursue them.
I don’t need “David Price” in a rotation, but the Tigers need his level of production. If they like him, they should go ahead and keep him.