Less than a week ago, the Boston Red Sox made one of the biggest splashes of the MLB offseason so far, signing starting pitcher David Price to a seven-year, $217 million deal, the largest for a pitcher in MLB history.
The 30-year-old Price will make roughly $31 million per season, which was the highest annual average value for a pitcher until Zack Greinke signed a six-year, $206 million deal with the Arizona Diamondbacks worth $34.3 million.
When Dave Dombrowski took over as President of Baseball Operations for the Red Sox this offseason, there was a dramatic shift in the organization’s culture. With general manager Ben Cherington out, so too was his philosophy of building and relying on a strong farm system to provide depth for the major league team.
Instead, Dombrowski is unafraid to flip prospects for proven palyers (as seen by trading for All-Star closer Craig Kimbrel), and was adamant about paying top-dollar for an ace that the Red Sox desperately needed.
With Price, Dombrowski got his guy.
There is no doubt that Price is one of the best pitchers in the game, and that he deserves to be paid like one. He is everything Dombrowski and the Red Sox needed. He is an accomplished pitcher who has succeeded in the American League East in his time with the Rays, and has been consistently effective (3.09 career ERA, 3.19 career FIP) and durable, throwing over 200 innings five times in his six big league seasons.
While Price has been knocked for his stats in the playoffs (2-7, 5.12 ERA in just over 63 innings), it isn’t really an issue. The hardest part of the playoffs is getting to them, and having Price take the ball every five days is a huge step toward making that happen.
Price said in his introductory press conference that he was “saving his playoff wins for the Red Sox,” and while baseball obviously doesn’t work like that, he might not necessarily be wrong. Price’s postseason woes are an anomaly when put next to his regular season success. With a small sample size like Price’s postseason, it’s easy to see him “positively regressing” to his average level of performance (which is very good) and turning in performances like he does in the regular season as he gets more playoff appearances.
However, despite Price’s tremendous talent and hefty price tag, the most important part of this deal is what can happen after three years, not seven.
Three years and $90 million into his contract, Price has the option to opt-out of the final four years and $127 million of his contract and hit the open market. Why would he do that? To make more money, of course.
Greinke is a good example of this. After leading the majors with a 1.66 ERA this past season and a 0.84 WHIP, the 32-year-old right-hander opted out of the final three years and $71 million of his contract he signed with the Los Angeles Dodgers in 2012. The result? His six-year, $206 million deal with the Diamondbacks.
Granted, there is an important caveat with this opt-out that needs to be noted: Price has to be healthy and effective. If he is just one or neither of those outcomes, he will not exercise his opt-out and claim the final $127 million of his deal.
That being said, it would be tough to expect Price to decline so rapidly. A path like Greinke is much more likely.
Like Greinke, Price will be 32 when he decides whether to opt-out of his contract or not. Over the next three season, Price is expected to be worth 14.1 wins above replacement (WAR) during his first three seasons with the Sox, per Fangraphs’ projections. Greinke was worth 13.7 WAR during his first three years of his contract with the Dodgers.
Price’s skills will decline as he gets older. It’s a given. But if he ages as gracefully as Greinke had prior to his opt out, both Price and Red Sox will greatly benefit. For one, the Sox have the potential to get three years of a Cy Young-caliber pitcher around their prime for $90 million, which sounds like a lot, but is a relatively fair price due to the increasing costs of contracts and the value of one win above replacement. They are also off the hook for $127 million if they allow Price to walk away and get a bigger contract elsewhere. Price gets to hit the open market coming off three great seasons, and will almost definitely receive a deal equaling or beating Greinke’s contract with the Diamondbacks, letting Price get paid handsomely for a declining skillset by some other team. It would be a win-win for both the Sox and Price.
Most importantly, Dombrowski gets the ace he desperately needed and wanted for a cost that looks gaudy, but one that Price may only see less than half of. Aside from incentivizing Price, Dombrowski is incentivized as well, creating a three-year window for him and the rest of the front office to bring home the fourth World Series title this century. The price is right, and the time is now.