Market Correction: Garza Signs




With the Tanaka signing yesterday, the first of the top-tier free agent starting pitchers has reportedly signed.



Matt Garza, it has been reported by Ken Rosenthal, has come to an agreement on a four-year, $52 million contract with the Milwaukee Brewers, pending a physical.


What this means is that there might be a slight market correction for pitchers like Garza, Ubaldo Jimenez and Ervin Santana downwards and that teams may actually sign them without overpaying for a good but not great pitcher.


Before any further discussion, we have to acknowledge that every player is in a different situation and it’s very difficult to compare the three on an even playing field. Garza, the only one of the three who can be signed without surrendering a draft pick, has a long list of injuries on his resume which likely drove down his price. Garza had four consecutive seasons in which he made at least 30 starts between 2008 and 2011 but missed time in each of the past two seasons. His 2011 season was excellent but the other three in that four-year window were around average depending on which metric you want to use. Still, a four-year contract for a 30-year-old pitcher with four solid, above average (cumulatively) seasons for $52 million is a pretty good buy if Garza stays healthy.


Garza is different from Jimenez and Santana in that neither has the same injury questions marks and both come with draft pick compensation. This compensation, in which the signing team will have to give up their first draft pick (as long as it isn’t protected), is going to drive the prices on both pitchers down as we saw last year with players like Michael Bourn and Kyle Lohse. The Blue Jays, however, are in an excellent position with two protected picks in this year’s draft (at number 9 and 11 overall) and so, if the Jays sign either Jimenez or Santana, they would only lose their second round pick rather than either of their two first rounders.



I’ve already said that I would prefer to sign Jimenez. He’s had six straight seasons of 30 or more starts and, as we’ve seen in the past, that kind of durability has value on its own. He’s also had some excellent seasons, particularly his 2009 and 2010 season with the Rockies, which shows that he can succeed in an environment that favours hitters. His 2011, according to Baseball Reference’s WAR stat was pretty bad (although Fangraphs thought it was pretty good) but his 2012 in Cleveland was very bad by any measure. He rebounded nicely in 2013 but is that due to the contract year effect?


With Santana, you’re getting a 31 year old who has only failed to make 30 starts in a season twice since his second year in the majors, in 2006. You also have a guy who, outside of two excellent seasons along the way, is about as likely to give you below league average pitching as he is to give you above-average pitching. As recently as 2012, he posted a sub-zero WAR (both on Fangraphs and BR). While Santana’s ground ball percentage has been on the upswing (it was at a career high 46.2% in 2013), he’s been pitching in some pretty good pitcher’s parks in L.A. and K.C. and when that’s taken into consideration, he’s only got three above average seasons in the majors.


What all of this is saying is that all of these pitchers have warts. For Garza it’s his durability. For Santana and Jimenez it’s the fact that teams must surrender a draft pick if they sign either one as well as history of mediocrity. Steve Adams at MLB Trade Rumors profiled Garza and said that he expected him to sign a four-year, $64 million contract as a free agent. That number has proven to be very high with the $52 million deal coming to light.


The market is already correcting itself with Jeff Todd at MLB Trade Rumors reporting that Ervin Santana’s asking price has dropped to $60 million over four years which, to me, seems entirely reasonable. Personally, I wouldn’t want to drop $15 million per year on another durable, decent arm, especially since the Blue Jays picked one of those guys up last year in Mark Buehrle, who has already proven that he can survive in the AL East at home in the Homer Dome Rogers Centre. It also means that he’s willing to try for a four-year contract instead of five.


What this means in the big picture is that team’s haven’t gone completely crazy following the Tanaka signing and Clayton Kershaw‘s extension. With the general inflation over the past few years, contracts in the $15 million per season range aren’t completely out of whack with the general baseball economy and average-to-slightly-above-average pitchers who can log 200-inning seasons are still a valuable commodity in major league baseball.