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Why doesn’t anyone go year to year anymore?

Feb 7, 2012, 6:22 PM EDT

kershaw getty wide Getty Images

Baseball owners got a good thing going on.

Sporting a pretty impeccable record after three seasons, Clayton Kershaw was eligible for arbitration for the first time this winter. Coming off a season that saw him take the NL Cy Young Award and the pitcher’s triple crown, he had a chance to set a new salary record for pitchers with his service time.

And yet he passed. Kershaw agreed to a two-year, $19 million contract on Tuesday. He didn’t even insist on receiving as much as Tim Lincecum got from the Giants two years ago. As a super-two player, Lincecum received $23 million for two years from the Giants after 2009.

I get why Kershaw would want to play it safe and take the payday. That first $20 million certainly sets one up for life in a way a $6.5 million salary for 2012 (that’s what the Dodgers offered him in arbitration) wouldn’t have.

Still, young players are giving up too much earnings potential in multiyear deals lately. And that everyone is doing it makes arbitration that much more of a risk for each new class of players.

That’s because arbitration is all about comparables. The players and teams both look at players with similiar performance and service time in judging their requests and offers. It’s weighed heavily in the event that the case eventually goes before an arbitrator.

But these days so many of the comparables are already locked up to long-term deals paying them less than what they could be earning. Who does Kershaw compare to? Cole Hamels? As part of a three-year deal, he made $4.35 million in what would have been his first year of arbitration. Jon Lester? $3.75 million in the second year of a five-year deal. Lincecum is the closest match. He made $8 million as a super-two player and $13 million with three-plus years of service time last year. 

Kershaw asked for $10 million in arbitration this winter, a price that seemed pretty reasonable given his performance. But rather than hold out for it, he’ll get a $500,000 signing bonus, $7.5 million this year and $11 million next year.

And so the cycle will continue. That so few of the game’s great young players have been willing to test arbitration holds down the salaries of the group as a whole. That’s not necessarily a bad thing for baseball. In fact, it’s probably a good thing; where would the Rays be right now if they had to pay Evan Longoria, James Shields and Ben Zobrist arbitration salaries? Still, I’d rather see the Kershaws of the game claim a bigger piece of the pie.

  1. dondada10 - Feb 7, 2012 at 6:51 PM

    It’s risky not to take the guaranteed money. Yeah, you could make more year to year, but that’s contingent on health–something that is by no means guaranteed.

    • quintjs - Feb 8, 2012 at 12:40 AM

      A couple of days ago we had a Brandon Webb story here on HBT.

      In 4 years he went from Cy Young, 2nd, 2nd, Never heard from again.

      That is basically the first page in “if you are pitcher and are offered a long term deal when under team control, sign the damn thing”

      What is surprising, is that Lester’s deal is used by many players and teams as a point of comparison, and Lester said after signing it that he did so because his circumstances were different than his peers.

    • skids003 - Feb 8, 2012 at 8:06 AM

      And everybody is not about how filthy rich they can get.

  2. brewcrewfan54 - Feb 7, 2012 at 6:53 PM

    Longterm financial stability vs. a year to year chance to get a huge payday eventually? I think I’d take the former over the latter also. Especially if I was a pitcher because the chance of catastrophic injury is always on the table for them.

  3. ultimatecardinalwarrior - Feb 7, 2012 at 7:27 PM

    What makes this particularly interesting to me is that these guys aren’t really signing long-term deals. They’ve just signing 2 year, maybe 3 year deals that lead them out of their arbitration years. In that sense, they aren’t really taking long-term financial security: they’re only taking $20 million before they can get their big payday in free agency. I know that’s not the case in some, Longoria being a prime example, but I really think that these guys should be pushing for arbitration more than they have been. Instead of making $20 million while they wait for their payday, they could make $26 or even $30 million. That $10 million could make a big difference.

    • hank10 - Feb 8, 2012 at 8:44 AM

      “Only taking $20 million” and “That $10 million could make a big difference.” Really. I wasn’t aware that someone cannot live comfortably on $20M but needs $30M to do so? I guess I should get a new financial adviser then.

      • CJ - Feb 8, 2012 at 10:09 AM

        that 10 million does make a huge difference….the difference between having your grandchildren set for life or your great grandchildren set for life.

  4. APBA Guy - Feb 7, 2012 at 7:39 PM

    It’s almost impossible for us desk-bound wage-slaves to put ourselves in the shoes (or cleats) of a premier athlete. But we can and do have opinions about what we’d do if given a shot at the potential earnings available to the best in the world ball players.

    Think about Landon Powell for a minute, the back-up catcher for the A’s who was DFA’d after 3 years with the club, all at MLB minimum. He still made $ 1.3 M by the time he was 30, plus his $1M signing bonus (first round pick by the A’s in 2004) and 4 years minor league salary. Let’s call it $ 2.5 M by the time he was 30 and probably through with MLB.

    The median annual US wage in 2011 was $26,000. So 50% of the workers in the US would have to work about 100 years to make what Landon Powell made by the time he was 30.

    Now before everyone thinks I’m going all Occupy on baseball or whatever, what I’m trying to do is to provide a bit of perspective on why guys take the guaranteed money. Most of these guys come from backgrounds clustered around the median, or even the higher arithmetic average income of $ 63,000 (see what happens when you add in the top 1%?) They’ve seen guys like Landon Powell get DFA’d, and now they have a chance to make a ton more than almost everyone they ever knew ever made in their entire lifetime 10 times over.

    What would you do?

    Take the guaranteed money.

    But then, I’m a wage slave chained to a desk.

    • Jonny 5 - Feb 8, 2012 at 8:27 AM

      As well as their agents more than likely prodding them to take the guarantee as it will benefit themselves much more.

  5. goforthanddie - Feb 7, 2012 at 7:39 PM

    It’s called common sense, something lacking in anyone questioning the acceptance of a 19mil contract.

  6. randygnyc - Feb 7, 2012 at 7:53 PM

    Injury.

  7. icanspeel - Feb 7, 2012 at 8:15 PM

    All it takes is 1 injury and the question will turn to “Why didn’t he take the 2 year deal?”

    Besides if he pitches well in those 2 years he has a fat payday waiting for him as he inches towards free agency.

    • CJ - Feb 8, 2012 at 10:39 AM

      all it takes is one injury THIS year for that to be the question.

      If he gets hurt next year, he’s much more screwed as he’ll be in a contract year and lose out on a huge deal, and people would be wondering why he didn’t sign the one year deal this year and a much longer term contract next year to buy up the last arb year and his first, say, 3-4 years of free agency.

      It’s a two way street, it just so happens he’ll have a little more dough in the short term doing what he did. But anyone calling a two year deal the best choice in the “long term” is merely 365 days less short sighted than the rest.

      He could just as easily take the one year deal and injury risk while he’s a year younger with 200+ innings fewer mileage and go for the long term deal next offseason, as opposed to taking the 2 year deal and taking 2 years’ of injury risk that would affect any long term contract he signs. There’s no easy choice here.

  8. clarenceoveur - Feb 7, 2012 at 8:17 PM

    Its a valid point, but not sure Kershaw the best example, he’s basically splitting the difference in this year’s arbitration and getting a raise on next year’s. Seems like pretty cheap injury insurance on his part and gives up nothing on his FA years.

  9. anjichpa - Feb 7, 2012 at 9:00 PM

    It seems to me that there’s enough of a discrepancy between what a player could get in arbitration and what they’re settling for that the player’s agent should be contacting insurances companies. The insurance company has an actuary assess the risk such player is taking (e.g. Kershaw), and they come up with an offer. While the player would still be lessening their overall earning potential, they can probably increase their guaranteed money over what the clubs are offering.

    Maybe the premiums would prevent it from being worthwhile, but it still seems to me like the players are leaving a lot of money on the table.

  10. brewcitybummer - Feb 8, 2012 at 12:04 AM

    A little more than a year ago I lost concentration for just a moment while lifting weights and hurt my shoulder. I still can’t throw a ball without enormous pain. I may never be able to. I hope for Kershaw’s sake he is more durable than I, but this still seems like an unusually dumb question for HBT. Hes a pitcher. His career could end tommorow slipping on a hardwood floor that got hit with some furniture polish.

    • brewcitybummer - Feb 8, 2012 at 12:19 AM

      Sometimes longtime baseball fans (and writers) forget the basic fact that the human body is an incredibly poor design for propelling a baseball through the air at 90mph. All pitchers are statistical outliers because their shoulders and elbows haven’t exploded…yet. Weird question Craig.

      • brewcrewfan54 - Feb 8, 2012 at 12:50 AM

        This wasn’t Craig brah!

      • brewcitybummer - Feb 8, 2012 at 10:47 AM

        It was late. My apologies Craig.

  11. stex52 - Feb 8, 2012 at 8:44 AM

    I’m sort of piling on an obvious point here. Kershaw is now set for life. One pop in his elbow in ST and his career could be over. How hard is that choice?

    There was an article in the Houston Chronicle last night about an Astros high draft choice from 1987. (Name escapes me). He pitched 9 scoreless innings at the end of 1990 and was set for the ’91 rotation. He popped his arm and never pitched successfully again. He is selling cars in Florida.

    Kershaw made a wise choice. I hope he cleans up in two years. For now, he knows he is in good shape no matter what happens.

  12. Old Gator - Feb 8, 2012 at 12:56 PM

    I think probably the reason we don’t go year to year anymore has to do with the expiration of Frank Herbert’s patent on the spice, and its availability in much larger, cheaper quantities as a generic stimulant for our navigators.

    • stex52 - Feb 8, 2012 at 4:53 PM

      Damn, I haven’t read “Dune” in nearly 40 years. You made me think, there.

      Ever read “Lord of Light” by Zelazny? It shared the Hugo in 1968. (I think it was ’68)

  13. nillasark - Feb 9, 2012 at 1:00 PM

    I think Kershaw has shown that he loves being a Dodger so I think maybe he was content with getting $19million and not causing a hassle. Before the two years are up the Dodgers offer a very nice contract extension after their ownership issues are settled…at least I hope so.

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