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Last-minute gift idea: a Gerrit Cole extension

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SOUTH HILLS – Now that spending caps exist in the June draft and international market, eliminating the one area where the Pirates out spent their competition, the club must find new areas to responsibly and smartly spend its relatively limited treasure.

I don’t think you should be too critical regarding the Pirates’ lack of activity in free agency. After all, it’s often a fool’s errand to spend tremendous resources on players’ post-prime years.

 

What you want to buy are players’ primes which are typically their final years of arbitration and those early years of free agency. The new ideal roadmap is to spend the game’s new television wealth on clubs’ own players.

 

Yesterday at Grantland, the estimable Jonah Keri suggested the Pirates should attempt to extend Gerrit Cole.

 

“Extending the idea beyond the occasional Cano-level free agent, the next logical step is for teams to use their stacks of cash to lock up their best young players to long-term deals. Mike Trout and Bryce Harper won’t be easy to sign, given how much they stand to make if they wait. Still, everyone has a price. And whether it’s those two young stars, or even less-experienced players like Jose Fernandez, Gerrit Cole, and Wil Myers, the logical way to balance profits with wins might be to make the kids some offers they can’t refuse.”

 

A number of players have agreed to club-friendly extensions in recent years – more than 50 current players – though I wonder if more players  will see contracts like Andrew McCutchen’s and see the millions they are potentially leaving on the table. In McCutchen’s case it could be $90 million over the course of his contract. Of course, he also guaranteed himself financial security and eliminated risk at a young age. Each side has to give in this situation.

 

But making any Gerrit Cole extension  unlikely is his representation, Scott Boras, who has called such contracts reprehensible on the part of agents.

 

Still, it’s worth a try. Everyone has a price. And Boras clients Carlos Gonzalez, Carlos Gomez and Elvis Andrus have signed extensions.

 

So what would the price be for Cole?

 

brando-godfather-306-505098

Having to negotiate with Boras? Send in this guy to make a non-refuseable offer.

 

So where does the framework begin? Two young pitchers signed extensions last offseason but you can be sure that even with less service time than Madison Bumgarner and Chris Sale, Boras and Cole would see more dollars.

 

THE IDEAL SCENARIOS …

Madison Bumgarner, LHP, Giants:

Singed with 2.127 service time a 5-year, $35 million extension,  ’13-17, with options for 2018, 2019

2013: $950,000, 2014: $3.95, 2015: $ 6.96, 2016: $9.95, 2017: $11.7 (2018 option: $12 million, 2019 option: $12 million)

Up to to a 7-year, $59 million deal. *Options can escalate to $14 or $16 million.

Buys out all arbitration years and up to three years of free agency

Chris Sale, LHP, White Sox:

Signed with 2.061 service time a 5-year, $32.5 million extension . ’13-17, with options for 2018, 2019

2013: $850,000, 2014: $3.5, 2015: $6, 2016: $9.15, 2017: $12

Up to a 7-year, $58.6 million deal.

Buys out all arbitration years and up to three years of free agency

 

BUT WHAT MIGHT COLE COST?

To buy out Cole’s arbitration and up to three years of free agency this offseason this might be more within the ballpark:

7-years, $56 million, ’14-20, plus option years at $20 million at 2021 and 2022 ($2 million buyout). (Similar to the McCutchen deal only there’s much more risk on the Pirates side as Cole is a pitcher and he’s further form free agency compared to when McCutchen signed).

Something like: 2014: $500,000, 2015: $500,000, 2016: $1 million, 2017: $6 million, 2018: $12 million, 2019: $16 million, 2020: $18 million.

Up to a 9-year, $94 million deal.

Maybe that’s enough dollars – with enough unknown remaining on the Cole side –  to entice Boras not to hang up the phone.

Also, the Pirates should have more cash available after their TV deal comes up in 2019, which makes a back-loaded deal more plausible.

The benefit is you buy out his arbitration and two years of free agency at today’s market value for a top-of-the rotation arm and who knows what the going rate for a No. 1 arm will be once Cole reaches his  arbitration/free agency years.

But the longer the Pirates wait the more leverage they will lose.

 

IF THE PIRATES WAIT/CAN’T COME TO AN AGREEMENT  ….

*Tim Lincecum did not sign an extension. He went year-to-year through arbitration. He earned $64.1  million over his first six-plus years of team control including $18 million in 2012 and $22 million in 2013. If Cole is as good as we think he can be, he’ll be much more expensive.

 

*The Rays are compelled to move David Price because they don’t want to play the estimated $26 million over his final two years of arbitration. If the Pirates do not reach a long-term deal with Cole, if they are not willing to commit 18-20 percent of payroll to one player, they could find themselves in a Price-like situation having to try to deal Cole after the 2017 season.

 

Unfortunately for the Pirates’ faithful this could be the most likely scenario, though Keri thinks it doesn’t have to be

 

 

*The Giants waited until the final season of team control to extend Matt Cain and it was expensive: five-years $112 million and that was at 2012 prices.

 

Everyone has a price. Can the Pirates match that of Cole-Boras?

 

-TS

 

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Comments

  1. Nate83 says:

    I’m not a big fan of assuming the TV deal in 2019 will bring that much more money. The boom teams are experiencing right now will eventually have it’s bubble burst. Just like internet and Netflix have allowed for live sporting events to benefit on their TV contracts I’m sure some other shifts in the market will cause it to level back off and come back down a little. I’m sure it will be an increase but I’m not sure we will see a 20 million dollar figure for any one year on any Pirate contract signed this decade.

    I’m a big fan of Cole but I’m not sure committing 90 million based on 3-4 months of work at the major league level is a bet the Pirates would place. I don’t see the Pirates being able to extend all pitchers on their team coming up through the system. If they sign Cole to an extension that’s probably it. Taillon would not get one as well. They would not commit some 35-40 million of their payroll to two pitchers in 2020-2021. Not to mention Glasnow, Kingham and Heredia depending on what they become.

    In my opinion it seems to early to make that leap of faith. There is plenty of time to allow things to play out and sign Cole to an extension a year before he heads into arbitration if indeed that is the right move.

  2. Nate83 says:

    Also thanks for all your blog entries. It’s provided great conversation topics. Your hard work is very appreciated.

  3. NMR says:

    Not a bad thought experiment. I’ll give it a shot.

    -Boras has said, specifically, that he doesn’t understand below market value extensions. Thus, it seems to me the first place to start is determing what Gerrit Cole, Free Agent, would command per year. Ace-caliber pitchers who have already signed contracts through those years are earning between $20m (Wainwright) and $28m (Verlander), so lets split the difference and value Gerrit Cole at $24m per year, as a free agent.

    Working back through arbitration starting at that number would give him $9.5m, $14.5m, and $19m respectively. Tack on one free agent year at $24m and three minimum salary years for a 7 yr $68.5m extension.

    Boras doesn’t do team options, so the best the Pirates could do at getting bonus years on top of that would be vesting options.

  4. NMR says:

    “I don’t see the Pirates being able to extend all pitchers on their team coming up through the system.”

    I’d take it one further. I don’t see the Pirates extending more than one player, period, if their high salary years overlap.

    Cutch, for instance, will make between $13-15m per year from ’16-’18. Can’t imagine much else of significance getting done via extensions or free agency if Cutch is to stay a Pirate.

  5. 1/ During the 2000 season Pittsburgh media almost universally insisted that Jason Kendall, the face of the Pirates, should be extended. They spoke loud and long.
    2/ Kendall was extended after 2000 season for 6 years/$60 million. After the 2001 season, in which Pirates finished last, Pittsburgh media now spent the next 3 seasons deriding Pirate management for extending Kendall for such a large amount . . . . . . . at least there was one season of quiet there.
    3/ Mike Dunn, who came over in the Tony Pena trade with van Slyke, finished 1987 with a 13 – 8 record and was named Sporting News pitcher of the year. I hope to be visiting his plaque in Cooperstown this summer.
    4/ Gerrit Cole has exactly 1/2 season of stellar performance in pro baseball. 1/2 season!! Fortunately, that 1/2 was in the Major Leagues.
    5/ Let’s not have media [or bloggers] start clambering for outlandish extensions when Cole is still 3 YEARS AWAY FROM ARBITRATION———especially when the agent is Scott Boras. All your doing is whizzing up hill in the woods. (get the picture?)

  6. Steelkings says:

    Cole is not a big Scap loader and many think, as do I that this bodes well for his long term health. I agree that he should be resigned. Unless you cant get past this game video of Cole

    http://www.youtube.com/watch?v=Hh74kFDCR_M

    Your welcome!

  7. Steelkings says:

    Oh sorry – I thought Grote said “Or Boogers”…I also meant extend Cole.

  8. Nate83 says:

    Agree, nothing has indicated they are willing to give even more then 10% of their payroll to one player except on a the rare occasion. If Alvarez hits another 30+ home runs next year and hits near .250 or better he will be too expensive to sign which I’m OK with because I don’t think his value will be equal to the amount of money he will get. He will need to be traded and used to either add prospects or major league ready cost controlled players.

  9. Nate83 says:

    I actually agree with this Groat. The problem is if he has 1 1/2 years of steller performance his cost suddenly goes way up. He becomes a little more of a certain thing and it becomes less of a gamble for him to just wait it out until his arbitration years and free agency.

    I however would rather see that happen and have it cost the Pirates maybe another 15-20 million spread out over a six year contract then to sign him tomorrow to an extension and have him never live up to that first half a season promise. I like him a lot and want to believe he is a sure thing but I’m personally not there yet. It’s not like he dominated minor league hitters.

  10. Travis Sawchik says:

    There is risk in the Pirates extending Cole with so little experience, yes. But the greater risk of doing nothing might be greater.

    Cole’s pedigree and talent suggests he could very much be on the David Price trajectory and that would mean he could become too expensive for Pirates’ ownership after his first arbitration year. If the Pirates want to keep him for more than four seasons – they’ll have to get some cost control, imo. If you’re going to bet on someone, it might as well be a No. 1 overall pick, who is 6-4, 250 with dominant stuff and draws praise for his mechanics.

    Also, I’d much rather pay for a pitcher’s early to mid 20s … fewer innings logged, less wear-and-tear.

    Remember the Warren Buffet Rule: Be greedy when people are fearful, be fearful when people are greedy. The Pirates benefit from negotiating the further Cole is away from his peak earning years.

  11. Steelkings says:

    I live in Indy and was able to watch Garret closely. AAA numbers are very deceiving. AAA is spring training on steroids. Cole worked hard on developing breaking pitches he struggled to throw for strikes. He fell behind a lot of hitters who found themselves in fastball predictable counts. Hence the Struggles in Indy. Once in Pittsburgh he was able to bring more heat.

  12. Jim S. says:

    I believe Cutch will be traded after ’16 or by the trade deadline of ’17. Hopefully, Austin Meadows will be ready to take over by then. If we trade him in the winter after the ’16 season, hopefully the return will be large.

    With Boras as the agent, and Cole already having pretty good financial security from his first contract, I think he is going to be tough to sign to an extension. He will most likely need to at least threaten to fire his agent in order to do that. But, there has to be a number, as Travis says, that will entice him. It is a big number. I’d like to see a little more continued improvement this year from the final 8 or 10 starts last year before I would commit huge money. It’s a tough call. That’s a lot of risk on the Bucs’ side, and they don’t normally like that sort of risk.

    Did Cutch sign his extension right after the season in which he hit sub-.260? His value was not quite so high at that point.

  13. Nate83 says:

    I appreciate the inside info Steelkings but won’t he eventually have to develop those other pitches and be able to throw them for strikes. I would hate to see him go through a major league batting order a third time using a fastball 65-80 percent of the time. Not many staff aces get pulled after 6 innings.

  14. BostonsCommon says:

    If Travis’ scenario played out, Cole would make the following: ’16: $1M, ’17: $6M, ’18: $12M… Those numbers are all manageable.

    2018 Could be difficult, but I could see them moving Cutch before that season for prospects. And if he isn’t traded before the season, and the Pirates aren’t contenders, he’s definitely going to be shipped out before the trade deadline. I don’t think his contract is going to be an issue at all really.

  15. Nate83 says:

    To counter argue won’t Tailllon be even younger and haven’s many said he has the higher upside. They both can’t be signed through 1 or 2 years of free agency unless Mark Cubin buys the team.

  16. Nate83 says:

    How steep is the hill? I’m just trying to figure out how bad the result would be.

  17. Jim S. says:

    Thanks for providing the forum for making Pirates’ baseball discussion a 12-month thing, Travis!

    Merry Christmas, Happy Holidays and Happy New Year!

  18. BostonsCommon says:

    What a ballsy move that would be. But AAV<$10M for an ace, for 7 Years? I would willingly spend Nutting's money for that and sleep with a clean conscience.

  19. Nate83 says:

    I usually agree with you Jim but in this case I don’t see that happening. His contract number is so low compared to his value they would have a tough time making up that many games in value on the dollar. He will be playing at a level twice his pay at that point. They should have other options to trade at that point if they wanted to restock the farm system with prospects.

  20. Nate83 says:

    I’m not sure. Maybe if you, me and a few other bloggers round out the rest of the roster they may have a chance to afford that much for Cole and enough other good players to remain competitive.

  21. NMR says:

    Bingo.

    The guy they should trade after 2016 is Starling Marte, not Andrew McCutchen.

    That winter, Marte will head to arbitration for the second time, which should pay him at least half of what Cutch will make. Starling will have two years of control left, which is also the same as Cutch, and should pull a quality prospect of his own.

  22. I endorse this. However, I’d prefer it be structured differently. Pirates have money in the budget for this year and they are running out of worthy players to spend it on. (unless Burnett decides to not retire). So if this year’s budget has the room they should front load some of that money. I get that a new TV deal will allow bigger payrolls in 2019 and beyond. But still, why have a $12 million dollar bill come due in 2018 when you can take a bite out of that payroll now. Not to mention if Cole gets hurt, the more money left on the contract the greater the burden it will be.

  23. BostonsCommon says:

    I was speaking specifically to that three year period (’19 and ’20 when he’s making a hypothetical $34M is another story).

    The Pirates can afford a $12M player, especially if Cutch isn’t on the roster. Even if he’s still on the roster thats $26.75M on two players.

    ’18 is 5 seasons away. Is it too much to expect for the payroll to reach $100M over the next 5 seasons?

    If it did, neither player would be breaking the “18-20% rule”, and there would be approximately $75M left to build out the roster.

  24. Nate83 says:

    I like the outside the box thinking but this is rarely done in baseball. Although I have seen a few teams do this recently. Another option is just take the total amount of the first 5 years and evenly spread that amount over each year. In this case it would be 4 million a year. This of course assumes the guy stays on your team that entire time. You can’t get money back that you already spent but on the other hand you can get more in return on a trade if he is owed less money.

  25. NMR says:

    If only the team would’ve slashed payroll while rebuilding. They could’ve used that money for the exact situation you describe.

    Oh well, at least it is nice knowing Nutting puts every dime he makes back into the team.

  26. cmat0829 says:

    Good discussion as always.. that’s why prudent GMs (and I think NH has become one) have various time-focused scenarios — immediate, intermediate, and long term — to guide their decisions. It does make sense for the Pirates to explore what type of extension Boras would consider for Cole….and the sooner the better. Reason being the only leverage the Pirates have is the uncertainty effect…i.e. how Cole will progress and develop over the next few years.

    That said, not sure I understand what Boras means by ‘no reason to do extensions that are ‘team-friendly’ ‘ .. for the Pirates to sign a guaranteed contract for multiple years there has to be consideration of that…either paying today’s prices for future FA seasons or some sort of ‘discount’ that factors in the risk the Pirates are taking.

    All of that said, the Pirates need to be setting up a Tampa -type of organization and practices — prepare for continued turnover of established talent as it gets expensive for high-end prospects to build from. That’s why it is very prudent to talk about how much payroll can be devoted to any one player… there is a model to how to exist in such a marketplace and Tampa is it. Its similar to the NBA, which has a salary cap and luxury tax…team budgets can accommodate 2 max players, a few midlevels, and the rest has to be cheap…and if you pick the wrong max players you are screwed. The Pirates, Tampa and others are operating under a salary cap while other teams (Yankees, Dodgers, etc.) are not. Which makes MLB a tough league to compete in, but at least possible now.

  27. NMR says:

    Good post, cmat.

    I’m pretty sure the answer Boras would give is that the team benefits by getting Cole(or whatever player he’s representing) for one or two additional years in his prime with no committment into his declining years. And that is absolutely true.

    Not enough for teams like the Pirates to justify that salary, but still a clear benefit.

  28. Jeff King says:

    This is why being in a smaller market puts you at a major disadvantage. You can’t make mistakes because it can take years to recover and by that time your window of opportunity may have closed.
    That’s why it’s a Catch-22. You want to hold onto as much pitching as you can because you know your next pitch could be your last, so if you trade one of your stud pitchers and another gets injured, then all of sudden your area of strength becomes a heck of a lot weaker.
    By the same token, when that window is open as it is now for the Pirates, you don’t want let it close without making a move that could put you over the top.
    A lot of people wanted to fire NH before last season, then he’s made to be hero the way we finished. Now, we’re starting to question him again because we’ve not done a whole lot in the off-season.
    There’s a fine line between genius and idiot I guess.

  29. cmat0829 says:

    All contracts need to be ‘win -win’ or they won’t get signed. Cole wins because early in his career he locks in a ton of guaranteed money. If he falters, gets injured, etc. he gets all the $$. The Pirates need to win by getting cost-certainty and a FA year or two at today’s prices. If they can bridge that gap, then it’s definitely worth signing the deal asap. If Boras insists on ‘winning’ the deal, then tell him to stuff it.

  30. cmat0829 says:

    I guess you have to consider all moves and non-moves in context. I tend to be in the camp of ‘making a move just to say you made a move’ is really the worst thing you can do. Any GM needs to start with absolute knowledge of what the available budget is from the owner. It is what it is and right now seems to be reasonably set as a function of gate receipts (Pirates ticket prices are very low compared to other teams) and local media revenue (again, Pirates are in low end of the scale).

    The next step is how you allocate those $$s. Seems to me the Bucs are/have been holding out $s for AJ Burnett to re-sign for one year. That would prohibit a big splash type of signing (even for Pirates’ standards). So you are left with decent upgrades that are no guarantee to ‘put them over the top’ and I think it prudent to consider the price for each one of those and determine go or no go. Someone like James Loney, in my opinion, is not worth $9M per year. I’m not entirely clear he would be a major upgrade over giving Lambo a shot and take your chances at the trade deadline. As to Smoak or Davis, I would welcome a reasonable trade for either but I won’t be printing WS tickets at the announcement of such a deal.

    This is the Tampa model folks… expecting somethiing different will only result in you being very frustrated. Tampa builds from within, takes a few fliers on reclamation projects, and trades their stars while they still have value. No major FA signings nor major prospect trades for proven talent. To deem NH a failure because he is executing within the salary constraints and basically following the only model that has proven successful for small markets is a bit harsh, but c’est la vie.

  31. NMR says:

    I agree that there seems to be a bit of overreaction regarding Huntington and the Pirates off season thus far.

    We can’t forget that Huntington reportedly had a better offer in to Josh Johnson before he took less to pitch on the West Coast. That move would’ve been made with or without AJ. Sometimes it just doesn’t work out.

    People seem to be getting upset that the Pirates haven’t acquired a 1B, but what they don’t do is mention the 1B they’ve missed out on. Logan Morrison? Corey Hart? James Loney? All these guys were looked down upon when they were first discussed, let alone at the prices they’ve went for. Fact is the team is no worse off at 1B then they were last year, and I seem to remember them doing alright.

    Sure, I envisioned a much more active offseason. But nothing I’ve seen thus far has changed my opinion of Huntington what so ever. Teams like the Pirates are never going to be able to just throw money at multiple targets until something sticks.

  32. Travis Sawchik says:

    Thanks, Nate. I’ve been pleased to see the uptick in audience participation here this season. Makes blogging worthwhile when you know there will be quality interaction

  33. Nate83 says:

    I agree it’s not as if the guys they are missing out on are huge improvements over what they will eventually end up with. Really Napoli it the only player that would have been an obvious improvement and even he comes with the disclaimer that he was playing for a contract last year and batting in a line up with a lot of protection. Too bad Byrd wasn’t a first baseman instead of a right fielder. He would have filled all the Pirates needs.

  34. Leo Walter says:

    A great topic Travis and an excellent discussion. Have a Merry Christmas

  35. Patrick(RI) says:

    Nice chat. I have to say that it is both interesting and alarming to see baseball reduced to financial speculation in such detail. It has always been a business, of course, but most fandom was blissfully unaware that Mudville would have to non-tender Mighty Casey. As a romantic, I do resent that talking baseball has become like reading a Business School case study, but that is the way it is. I agree with Cmat that the Tampa example is the most likely road to “succcess,” but that is tough to take for a fan who thinks of his team in terms of players and not its revenue share. I wish the Yankee business plan were more available to Pittsburgh, wherein you “refresh” at will, but ride your studs to the grave. Cutch should retire a Pirate. Alas . . .

  36. Patrick(RI) says:

    I see that my backward thinking has gotten way ahead of it’s 9:20am time!

  37. Steelkings says:

    In indy he threw breaking stuff early in counts. Fell behind a lot. But he got better at it. He actually developed the breaking stuff in Indy. When he started 2013 in Indy he was walking tons and getting ripped. But over his last two starts his line score was something like 14 innings 2 walks and 3 hits. He was dominant when he left and he only got better from there. Locking him up is a risk, sure. But also its a no brainer.

  38. Steelkings says:

    Pirates improved today! Shin Soo Choo to the Rangers and out of the National League

  39. Steelkings says:

    ***Fact is the team is no worse off at 1B then they were last year, and I seem to remember them doing alright.***

    No comparison. Completely unfair statement. Morneau and Jones are no longer here. Dont be fooled. Right now as it sits, Gaby Sanchez is the EVERYDAY first baseman. He’ll hit from both sides. Adam Lambo playing first base is something fans made up in their heads. Management has given no indication of anything otherwise. Lambo is playing at first in winter ball sparingly and is splitting time with a non Major leaguer who is hitting 185 and also splitting with the Short stop. Lambo will likely start 2014 in Indianapolis.

  40. LeeFoo says:

    Travis…you call this ‘quality’ interaction? Are we talking me, NMR, Groat, et al?

    Quality? (in my best Jim Mora voice). You talking Quality???

    Btw, I echo Nate (Succop) 83′s comments. :) :) :) :)

  41. LeeFoo says:

    agree!

  42. LeeFoo says:

    In case I don’t make it back (or Travis doesn’t post again, by then), I want to wish EVERYONE a Merry Christmas! Btw, I learned something in church….
    Merry originally meant Mighty – as In God Rest, Ye MIGHTY Gentleman and Robin and his MIGHTY Men.
    ‘Mas’ means ‘encounter’ (as in Roberto Duran NOT wanting to ‘encounter’ Sugar Ray any more. So Merry Christmas literally means, have a “Mighty Encounter with Christ”

    It was good to interact again with a lot of you guys who I knew from before in various places.

    Merry Christmas and Happy Foo Year.

  43. LeeFoo says:

    Here is my gift to everyone who has watched Athletes getting interviewed. Stay with it until the end.

  44. LeeFoo says:

    Btw, I know that Duran was saying “No More”…..but he meant “No More encounter”…he just didn’t say the word encounter.

  45. NMR says:

    And Gaby Sanchez, as the everyday first baseman, is an improvement over Garrett Jones of last year.

  46. Jim S. says:

    I believe the Pirates should operate in a Tampa-like model, knowing they should also have that little bit extra $$ for the occasional flexibility Tampa cannot afford. It would be similar to St. Louis vs. the Pirates from a payroll standpoint – similar philosophy in developing and basing everything off building from within, but with the ability to patch a few more cracks than the Bucs due to higher revenue.

  47. Jim S. says:

    Actually, I don’t think so Nate. They need a partner for Gaby. Byrd and Gaby both bath RH.

  48. Jim S. says:

    Fortunately for us these days, the Yankees have been run so poorly of late that they are up against the luxury tax threshhold that they desperately want to avoid and they are developing very few players of impact to add to their roster.

 
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