A look at why Justin Verlander is being paid the "same" as Anibal Sanchez, and why that's a misleading statement.
Anibal Sanchez just signed the same contract as Justin Verlander.
(That's what's wrong with baseball is the implied, if not specifically made, statement.)
Sanchez is set to receive $80 million over five years, USA Today's Bob Nightengale reported Friday morning.
If those numbers sound familiar, it's because Verlander signed a five-year deal worth $80 million in February 2010. If the Sanchez figures are correct, both players have an average contract of $16 million per year.
That's some mighty big baseball inflation, isn't it?
Well, for one, actually, baseball has seen a lot of inflation over the past couple of years. Of the 15 highest contracts (by total compensation), eight have been signed since 2011. (Most of the rest seem to have been signed by Yankees.) Thursday, Josh Hamilton signed a contract worth $25 million a year. Zack Greinke's contract is reported to be worth $158 million over six seasons. That's about $26.33 million a year. Sanchez was considered by many to be the second-best free-agent starting pitcher.
The inflation has been driven by a couple of things: Big-spending teams and big TV deals. The Marlins went crazy spending money ahead of opening their new ballpark in Miami. The Dodgers (with new ownership) and Angels both inked large television contracts recently. The Angels' deal is said to be worth $3 billion over 20 years, or about $150 million a year. Fox Sports and the Dodgers were reported to be in talks for a TV deal worth $6 billion. Though each team negotiates its own deal, the teams who play on Fox Sports all seem to be seeing a lot more money. You can find outrageous figures thrown about for any number of teams. In addition to that, the MLB recently signed a national TV contract that will give each team about $51 million a year -- more than doubling the prior take. So, contracts have risen because a few teams suddenly have a whole lot of money to spend.
The Tigers have a rabid following. They surpass 3 million fans a year. They were the most-searched MLB team on the Internet this year. They had TV ratings and viewership near the top of the MLBB in 2012. That should all bode well for their financial future. Details of the Tigers' contract with Fox Sports have not been divulged, though a recent article by Lynn Henning in the News refutes the idea that the Tigers are able to opt out of their deal and get their own large contract. However, a Tigers spokesman did hint to Henning that the Tigers are being compensated at a satisfactory level that is quite likely above the $40 million per year figure that many have assumed. So, without even mentioning the net worth of the Tigers' owner, the team seems to be on fine financial footing.
Although the $80 million figure for Sanchez sounds like a lot -- especially for a player many envision near the middle of the Tigers' rotation -- it's quite likely baseball inflation will continue to the point where Sanchez's salary looks like a bargain within a few years.
However factual, it would be inaccurate to say Sanchez is paid the same amount as Verlander. The total value of Verlander's contract was kept in check because of the way baseball compensation works. That is, the team has negotiating rights to a player for the first six years of his major league career. During the final three of those years, a player gains some negotiating power, though he cannot choose to become a free agent. That's arbitration. Whether the indentured servitude of players is fair or not is not the question. It's just the way it is in the sport, so contracts have to be compared via the way things are, not the way you might feel they should be.
When Verlander signed his deal in 2010, he had two years of arbitration eligibility remaining. In other words, he was not going to receive free-agent dollars for those years. The Tigers were going to receive a team-friendly contract for those years, and the overall value of the contract would be team-friendly as well (so long as Verlander continued along his career path.)
Verlander's actual 2010-2014 contract breakdown, per Cot's Contracts:
2010: $6.75 million
2011: $12.75 million
2012: $20.1 million
2013: $20.1 million
2014: $20.1 million
The value of Verlander's contract was also kept in check by Verlander himself. He signed the deal. He was guaranteed $80 million for his services even if he was injured and never pitched a game again in his life. He knew waiting two seasons might have netted him a higher value contract when he was eligible to become a free agent. But he also knew any number of bad things could occur to diminish his worth, from injury to ineffectiveness. So the $80 million over five years felt like an acceptable middle ground for Verlander. In all likelihood at the time (and even more likelihood now) Verlander would still be due to receive a huge contract that makes the $16 million per year average pale in comparison. But he hedged his bets a bit to become very rich a bit earlier.
Sanchez, meanwhile, was not arbitration eligible and was a free agent, able to listen to deals from any team in the league. He had no compensation picks tied to his name that could pull his value down. He came off a successful shift to the American League and a great showing in the playoffs. (Even if his team didn't score enough runs to earn him more wins.) He was the best free-agent pitcher remaining in a year with wild money being thrown around. And he still only matched the total value of Verlander's three-year-old contract.
The dollar figures for Sanchez and Verlander might have a familiar sound, but there remains many large differences between the deals they received. To try to make direct comparisons is inaccurate and unfair.