Wednesday, March 26, 2014

Building a Jon Lester Contract

The Red Sox are in talks with Jon Lester and his agent to try and get an extension done by opening day, which Lester has set as a deadline.  If not done they plan to shelf talks until October.  The talks were made public when Lester himself claimed this spring he would take a "home town discount".  It's beginning to become clear that Lester might not have the same definition of discount that the rest of us do.

In discussing other deals this spring Lester has mentioned Clayton Kershaw and Justin Verlander as players who took a "home town discount".  I don't know about you, but 7 years and $180M for Verlander and 7 years and $215M for Kershaw don't strike anyone as discounts.  Signing at the top of the market with values of $20M per season and $30M per season are not discounts even if it's the home team.

The next comparable appeared to be Max Scherzer who turned down a 6 year deal from the Tigers for $144M.  That for a pitcher at the same age as Lester, but coming off a Cy Young year with better numbers for two straight seasons.  Even in the playoffs the Tigers were not eliminated because of Scherzer.

So while I think Scherzer is worth that contract and is projected by OLIVER to total 26.3 WAR over the next 6 seasons Lester is only projected for 19.1 WAR. (the sixth season is estimated by me).  Verlander is at 32.3 WAR and Kershaw is projected for 36.3 WAR over the next 6 seasons.  Clearly Lester is aiming high, but he is clearly not ready to be paid like this group.

The Red Sox clearly want to see Lester in Boston for a few more years, but don't want to just hand out money.  If the Red Sox would go to five years on a deal with Lester he would be 34 when it ended depending on if you replaced the 2014 current deal or not.  Given 5 seasons of OLIVER projections he would total 16.1 WAR.  Based on current values a WAR is worth at least $5.5M.  This makes a rough estimate of $88.5M for five season.  If you go high to $6M the deal stands at $96M and would somewhat account for price inflation.

Rounding that off the Red Sox probably want to see Lester at 5 years and $100M or maybe 6 years and $118M.  They could even role in a few team options to bring the "total" value closer to Scherzer in the long run, but those would have to be team options with no vesting numbers.  These would be solid value deals and not really any type of discount.

If the team cannot reach an agreement with Lester than it's possible the team looks very different in 2015.  Depending on what happens with John Lackey's option for 2015 it's possible only Buchholz and Felix Doubront are still around on the roster.  That seems like something the Red Sox would like to avoid.  I still expect them to reach some agreement even if it happens to be in April or perhaps May.  The question is does Lester actually believe in the idea of a discount or was that talk more about PR?

photo credit: Keith Allison via photopin cc


  1. I don't quite see it as a PR move (I think he is a pretty sincere person)....I just think his idea of a hometown discount was more "nuanced" than we had initially interpreted it to be. I think he meant "hometown discount" RELATIVE to what pitchers are getting currently on the open market - which is sky-high in recent events!
    In other words, if he thinks he could possibly get 6 years, $24 million per year on the open market right now (I am not just throwing out the numbers, some "experts" have remarked that this is within the realm of possibility for Lester, given the demand for quality, durable pitching), then something like 5 years, $100 million would qualify as a hometown discount indeed.

  2. I agree with you and I think we are seeing a shift in $/WAR values. We'll have to see where it goes, but at this point with the money being spent 5/$100 doesn't sound terrible. It's a bit of an overpay, but one year less as well.

  3. Let's not forget that there is a chance that he will be better in his 30s then the models currently project him to be. I can think of many examples of pitchers who actually improved in their 30s. Yes, for that to take place, would qualify as an outlier. But then again, outliers DO happen (and people never seem to be able to predict outliers until they ACTUALLY happen).

    1. Based on that logic though we could just assume he would be an outlier negatively. What's to say he doesn't get injured and barely pitches in the next 6 years? If you want to lean to the positive side I'm fine with that, but it would be dangerous for the Red Sox to start planning on positive outliers.