When the Los Angeles Dodgers signed two-time Cy Young winner Clayton Kershaw to a seven-year, $215 million contract extension on Wednesday, agents for all of the game's top players took notice. Kershaw's average annual salary of $30.7 million is the highest of any contract ever given to a major league baseball player.
The previous high was given to Roger Clemens by the Yankees, although on only a one-year deal, for $28 million. The highest over a multi-year contract was given to Alex Rodriguez, again by the Yankees in his current ten-year, $275 million contract.
Among those taking notice of Kershaw's contract are Scott Boras, who is the agent for Tigers' Cy Young winner Max Scherzer. Like Kershaw, Scherzer has one year of arbitration eligibility left, where he is projected to earn about $13.6 million in his final season before he can declare free agency. Kershaw will receive a $4 million salary and a signing bonus worth $18 million for 2014.
We knew that the price of extending Scherzer was going to be high. The Kershaw contract didn't do anything to improve the Tigers' chances of signing him to an extension. Boras is known for driving his clients to the free agent market where he can play multiple teams against each other to obtain the highest possible salary. Kershaw's salary will be $30 million to $33 million per year for the final six years of his contract. And if that's not good enough, Kershaw also has the right to opt out of the contract after five seasons, which is likely if he is as healthy and effective as he has been to this point.
By comparison, the Tigers' other recent Cy Young winner, Justin Verlander, has a current contract that pays him $180 million over seven years, including $140 million in new money, through the 2020 season. That is now the fourth-highest average annual value ever paid to any player, and the second-highest multi-year average for a pitcher, at $25.7 million.
One might think that Scherzer would not get a bigger contract than Verlander. After all, JV has had more successful seasons atop the league, winning the Cy Young and the MVP in 2011, and finishing one vote shy of a second Cy Young award in 2012. But Scherzer expects to have one thing going for him that Verlander didn't: free agency, and that means multiple bidders. There won't be a team in the game that wouldn't like to have Scherzer in their rotation.
Would the Tigers be willing to pay $215 million? They paid $214 million for Prince Fielder for nine years, and look how that turned out! Fielder's contract now ranks seventh all-time just behind Kershaw, who is sixth in total dollars. The influx of new television deals, including a major-league deal that will pay each club an extra $25 million for the 2014 season, is sure to push salaries higher across the board.
Chances are that Scherzer won't get the kind of money that the Dodgers gave Kershaw. For one thing, the Dodgers are starting to pull away in the spending race, with the highest payroll in the game, and they figure to be all set in the pitching department for several years to come.
There are also some differences between Scherzer and others at the top of the pay scale. Max will be 30 in April 2014. Kershaw will be 32 when his current seven-year contract is up. Max will need to win another Cy Young award or an MVP to match the accomplishments of Verlander or Kershaw.
Dave Cameron at Fangraphs.com makes a good case for Kershaw's new deal, comparing him to some of baseball's greatest pitchers at a similar age. Steve Goldman of SB Nation calls Kershaw's contract "the safest of $215 million bets".
James Shields is said to be looking for a contract similar to what the Dodgers paid Zack Greinke. The former Royals Cy Young winner signed a six-year, $147 million contract. The Royals gave up a lot, including Wil Myers, the game's top prospect, to get two seasons of Shields.
Twelve pitchers have gotten contracts worth over $ 20 million per season, but only Kershaw, Verlander, and Felix Hernandez have topped the $ 25 million mark. Eight pitchers earn at least $ 23 million per season on their present deals. One thing you can count on is that Boras is going to try to get Scherzer a long-term deal in the $24 million-plus range, and he'll play the game until he gets it.
Also of interest to the Tigers is the impact that Kershaw's contract might have on their efforts to sign Miguel Cabrera to an extension. Miggy's current $153 million contract expires after the 2015 season, and he was already expected to get in the $30 million range. That bar has just been raised with Kershaw's deal.
I would still expect the Tigers to sign Cabrera to a mega-deal that will make him the highest paid player in the game. How many years they have to pay him is more likely to be the sticking point. But for Scherzer, Tiger fans might have to settle for one more good season and a supplemental first-round draft pick when he leaves as a free agent.