Max Scherzer was the most dominant pitcher in the American League during the 2013 season, with 21 wins, 3 losses, an ERA of 2.90, and a league-leading WAR of 6.4, according to Fangraphs.com.
Scherzer is eligible for arbitration this offseason for the third and final time. He earned a salary of $ 6.725 million in 2013, and that number figures to double in 2014. Matt Swartz, who projects arbitration salaries for MLB Trade Rumors, has estimated Scherzer's 2014 salary at $13.6 million. After the 2014 season, he will become a free agent, unless he signs a contract extending him into his free agent years.
Scherzer's agent is Scott Boras, who is known for driving his clients to the free agent market where he can play clubs against each other to extract the maximum possible salary for them, and for himself. For the Detroit Tigers, having Boras for an agent makes it much more likely that Scherzer will test the waters of free agency.
The Tigers know Scott Boras. He is also the agent for Prince Fielder and Austin Jackson. He was the agent for Magglio Ordonez, Johnny Damon, and Jacob Turner. He was also the agent for Kenny Rogers, before Rogers fired Boras and decided to represent himself. It turns out that Rogers wanted Boras to just negotiate an extension with Detroit, but the agent began playing agent games, inviting other teams to the party. Teams that Rogers didn't want to dance with, so he fired Boras and took what he thought was a fair offer from the Tigers.
Boras was also the agent for Alex Rodriguez. A Rod also fired Boras for much the same reason. He wanted to sign an extension with the Yankees, while Boras had cut off negotiations with the Yankees to see how high he could drive the bidding. With Boras, it's all about getting to free agency, and he isn't bluffing when he says he'll take his chances on the open market.
The advantage for Scherzer in signing an extension is that his value is at its peak. It will only increase if he has another season like he has had in 2013. That, and he currently runs the risk of injury blowing the whole deal if he were to get injured during the 2014 season. An extension shifts that risk to the club.
The advantage for the Tigers in signing an extension is that they would expect some reduction in what they will have to pay Scherzer in exchange for eating the risk of injury. That, and they get to keep their prized ace, and he was their ace this past season, for several more seasons.
So, how much could Scherzer get as a free agent? Well, the comps are going to be the very best pitchers in baseball. They will be Justin Verlander, Felix Hernandez, and Zach Greinke. One more name to watch is the Dodgers' Clayton Kershaw. While Scherzer is likely to win the Cy Young award in the American League, Kershaw will be his counter part in the National league. Reports are that Kershaw left a $ 300 million contract offer on the table, preferring not to focus on contract talks during the season. He figures to get the highest contract ever given to a pitcher. But Kershaw is also a multiple Cy Young winner, so he will top any salary list.
In terms of salary, Cot's Contracts lists the highest paid pitchers, according to average annual salary:
The highest-paid starting pitchers, by average annual value:
1. Justin Verlander, $25,714,286 (2013-19)
2. Felix Hernandez, $25,000,000 (2013-19)
3. Zack Greinke, $24,500,000 (2013-18)
4. CC Sabathia, $24,400,000 (2012-16)
5. Cole Hamels, $24,000,000 (2013-18)
. . . Cliff Lee, $24,000,000 (2011-15)
7. CC Sabathia, $23,000,000 (2009-15)
8. Johan Santana, $22,916,667 (2008-13)
9. Matt Cain, $21,250,000 (2012-17)
10. Tim Lincecum, $20,250,000 (2012-13)
Justin Verlander tops this list at just over $ 25.7 million for seven years. Two of those years were part of his initial extension that were wrapped into his latest contract, signed earlier this year. Notice that most of the players on the above list have actually remained fairly healthy, with a couple of exceptions. But if we were to extend this list to 20 players, we'd see names like Zito, Halladay, Lackey, Zambrano, and Wainwright. Good pitchers all, when they're healthy, but some have been injured and others have seen a sudden drop in performance.
At number 20 on the list, there is a tie between Justin Verlander's first extension and Anibal Sanchez, with an average salary of $16 million. Had Sanchez been healthy for a full season, he would arguably be in the Cy Young conversation along with Scherzer. The Tigers can try using Sanchez as a comp for Scherzer, but that argument won't get very far. Consider Sanchez a relative bargain at that salary. Scherzer could score a deal in the $20-25 million range for five plus years if he were a free agent today.
Boras has signed extensions prior to free agency in the past, but they are the exception. He got Jered Weaver signed to a team-friendly five-year, $85 million contract with the Angels when Weaver said he didn't want to play anywhere else. Those years included both arbitration and potential free agency seasons.
If Scherzer were to sign an extension with the Tigers, he would want to get himself an annual salary that puts him as close to the top of this list as possible, after factoring in his $13 million plus for 2014. Lincecum is an exception on the above list, as he had yet to reach his free agent years. He won the Cy Young award twice in his first two seasons, and started his arbitration years in the $10 million range as a super two player. Scherzer's imminent Cy Young award comes in his fifth season.
Verlander got his current extension after one Cy Young award and one near-miss, a second-place finish. Verlander's first extension was signed in 2010, when he received $6.75 million for 2011, $12.75 million for 2012, and $20 million per year for his first three seasons of potential free agency. In that deal, the Tigers ate the risk of injury for two seasons. What they got was two Cy Young level performances.
It's already too late for Scherzer to follow the path of Verlander's contract history. Although the numbers for their fifth seasons are comparable, and the numbers for their sixth years will be comparable, Scherzer is just one year from the ultimate Boras goal of a bidding war. Just one year of risk, with one Cy Young already in the bag. That likely pushes his value above the $20 million that Verlander will receive for his 6th, 7th, and 8th seasons, and closer to Verlander's most recent extension.
Suffice it to say that we are firmly in the $20-25 million salary range, if Scherzer is to sign an extension prior to the 2014 season. When he becomes a free agent, his price tag depends on what he does during the 2014 season. At most, he is a two-time Cy Young winner. If he drops back to his 2012 performance level, he's still a top ten pitcher, and would stay in the $20-25 million range. Worst case, he is injured and the big deal is off.
A sticking point with signing an extension could be the number of years. Scherzer would want as many years as possible, while the club would want to minimize that risk. Boras may think that, as a free agent, he could get a seven- or eight-year deal. One way to compromise that would be with vesting options in the latter years of the contract, based upon innings. Verlander has an option for 2020 based on finishing in the top five in the Cy Young voting. In that case the team would be happy to extend him another season.
WHAT IF THERE IS NO EXTENSION:
If the Tigers are unable to come to terms with Scherzer and Boras on an extension, they are basically left with three options. They could keep Scherzer for the 2013 season, then revisit the contract after the season. If he should leave as a free agent, no doubt they would make a qualifying offer and receive a first-round draft pick as compensation. If the season is not going as planned by the trade deadline, they could trade him at that time.
The third option is the unthinkable for a team that wants to win a World Series immediately. The Tigers could trade their Cy Young winner to the highest bidder. In this scenario, the new team would likely be getting Max for one season, and then get the compensation pick in June 2015. A sign and trade is unlikely, as the team would be faced with the same trouble coming to terms on an extension as the Tigers would be.
Danny Knobler of CBS Sports believes that the Tigers could trade Scherzer If the Tigers do trade Scherzer, it will be because the return brings them closer to winning a World Series in 2014.
What could the Tigers get in a trade for Scherzer? Well, every team wants pitching, almost without exception. The Tigers would want a quality starting pitcher and then some in return. Perhaps a second baseman or an outfielder with a complete skill set. No, the Angels are not going to give up Mike Trout, but they might give up Mark Trumbo and Howie Kendrick, along with a good young pitcher. We could speculate all day on what the return might be.
James Shields wasn't in Scherzer's class, but was better than any free agent pitcher last winter, and he was traded with two seasons left for Wil Myers, the top prospect in the game. David Price, another former Cy Young winner, is said to be available this off season for trade, with two arbitration years remaining. He should logically bring more than Shields or Scherzer. Figure that, if the Tigers were to trade Scherzer, they'd get at least one amazing prospect or a couple of very, very good prospects.
WHAT IS THE LIKELY SCENARIO?
My view is that the Tigers are in "win now, more than ever" mode. I can't see the Tigers trading Max Scherzer. Mr Ilitch has put his money up to win a championship. He's already "all in", and he's not going to pull out now. It is possible that the payroll can't be stretched any further, but it's also possible that the payroll will grow with revenue, and a new television contract could provide the means to keep all of the players on the roster, and then some. Another year of Scherzer, plus a first-round pick might be better than what they can get in a trade. And the price of keeping him won't get much higher.