This isn’t exactly breaking news, but Max Scherzer and his agent (Scott Boras) apparently turned down a 6-year, $144 million contract from the Tigers and punted negotiations forward a year to his free agency. Dombrowski was apparently displeased. Boras stated that he didn’t end negotiations, Dombrowski did, and that there was a price point at which Scherzer would have accepted. If I’m reading that correctly, Scherzer/Boras turned down the $144 mil but made a counteroffer that gave Dombrowski indigestion. Likely Dombrowski considers 6 and $144 fair market value for Scherzer (as do I) while Scherzer/Boras consider it a “hometown discount” that they aren’t going to take.
I’m not going to argue the case that the Tigers will be better with the money but without Max Scherzer, I’ll leave that debate to others. What I’m going to argue is that Max Scherzer would be better off with the money and with the Detroit Tigers. There is always some tension between agents and players over the idea of a “hometown discount”: players and their families would often prefer not to move, while agents couldn’t care less. We can probably safely assume that if only for that reason Max Scherzer was probably more tempted by the offer than Boras was, but even THAT is not what I’m arguing.
I would argue that there is an excellent chance that Max Scherzer will not do better than 6 and $144 on the open market in November. If Max Scherzer were on the market today, which he is not, he would certainly be able to find someone else willing to give him the same contract as Detroit offered and very likely a greater AAV AND another year. Unfortunately for Scherzer that is an entirely inappropriate frame of reference to use for negotiating a contract extension. Scherzer is not on the market today, he will be on the market after 6 grueling months of baseball. Right now, he’s a pitcher coming off a career year and a Cy Young award. Next year? Who knows.
Scherzer is coming off a campaign with a 2.90 ERA, but prior to that he finished with 3.74, 4.43, 3.50 and 4.12 in the four full seasons prior. He had never previously won more than 16 games or thrown 200 innings (before 2013, of course). He’s a swing-and-miss pitcher with great stuff, so the fact that his 3-year averages don’t compare favorably to Doug Fister isn’t going to make anyone thing of Fister as a comp (except me). The market does reward the skillset that Scherzer brings to the table. However, in the past the knocks on Scherzer have been concerns over mechanical consistency and that those mechanics could be hard on his arm. In the second half of 2012 and in 2013 Scherzer put those worries – at least temporarily – to rest.
Nonetheless – it’s difficult for any pitcher to repeat extraordinary success partly because they aren’t consistent and partly because there is so much that affects their “production” that is beyond their control. Scherzer should not be expected to be one of those guys who is – on his own – abnormally consistent, and as for the “beyond his control” a lot of the sparkly numbers in 2013 was due to good run support and a BABIP about 50 points below his previous career average. Following his 2012 Cy Young David Price saw his ERA rise by 0.77 and his win total drop from 20 to 10. This is fairly typical… Justin Verlander was almost as good in 2012 as in his Cy Young/MVP 2011, but not quite. Aside from him, Felix Hernandez saw his ERA rise by 1.20 after winning the Cy Young in 2010, Zack Greinke by more than two full runs after winning it in 2009 – and lets not even mention R.A. Dickey. You should never expect a repeat for a Cy Young winner – even if nothing “goes wrong” and even if his peripherals were solid while he was winning the award. Zack Greinke’s FIP in 2009 was right in line with his ERA… and while his 2010 ERA was almost a run higher than his 2010 FIP his 2010 FIP was a run higher than his 2009 FIP. Cy Young winners are a special case (statistically speaking it’s “selection bias”). Just by looking at priors rather than FIPS and xFIPS, I’d say that the baseline scenario should be expecting an ERA of about 3.50 for Scherzer – just as likely to be higher than lower – rather than the approximately 3.30 that projections systems give (which is still not so good as his 2013).
If Scherzer gets another 20 wins and sub-3.00 ERA, he’s going to get the $27 million or so AAV they’re probably looking for. If he hits his projections (which call for a moderate regression), he’ll get that 6 and $144 that DD offered from somewhere. If he has a Greinke or Dickey year, he’ll likely find he’s not the #1 pitcher on the market and isn’t hearing offers of more than 5 years or $100 mil. That’s obviously not the worst case scenario for Scherzer, though. The worst case scenario would be to go the way of Brandon Webb – who won the Cy Young in 2006 and then came runner up in both 2007 and 2008. 2009 was Webb’s 6th full season and would have been his 4th arb year. Would have been because he signed a contract extension after the 2005 season, so he didn’t actually become a free agent following the 2009 season. Probably good for Webb, since the shoulder injury that sidelined him after a single start in 2009 ultimately prevented him from throwing another big league pitch.
Scherzer can’t be sure that the same won’t happen to him – Webb had been healthy, productive and extraordinarily consistent up to that point. That has to be in the back of his mind. If it does? He gets an incentive-laden 1-year deal in 2015. Unlike certain other major sports, money in baseball is largely guaranteed which means the financial risk of injury falls mostly on owners (at least as far as big money free agents are concerned). Max Scherzer may believe he’s very likely to do as well as or better than his projections. He may feel invincible. Still, what he’s doing is going without a net – opting to go without insurance – the potential returns to him above and beyond $144 million aren’t really that large relative to what he stands to lose if things go badly. Unless he’s a born gambler, that is a contract offer that he should have accepted in much the same way he’d prefer a 7th year at the same AAV.
The guy who isn’t necessarily inclined to feel that way is Scott Boras. Scott Boras has Boras’ interests at heart, and while part of that is getting a client named Scherzer the most money (on average, come what may) that’s not all. For one thing, Boras’ has a diversified Portfolio while Scherzer is 100% invested in Scherzer. On a related note, perhaps most important, Boras has many other clients (including arb eligibles) and he must desperately want to set high comps for them and that means making sure that somebody gets top dollar on the free agent market to set the market for everybody else. If Scherzer gets $27.5 million instead of $24, that’s only $3.5 million for Scherzer… but many more millions will trickle down to the guys using Scherzer’s contract as a reference point in negotiating their own – and their agents. I have the feeling that if Max Scherzer was negotiating his own deal, or if he had an agent with a single client (like Jerry Maguire!) that contract would have been signed and considered mutually beneficial and I have the feeling that Scherzer’s relationship with Boras might not be serving him well right now. Cross your fingers and wish him luck, clearly a disastrous Scherzer season would have other serious repercussions for Tigers fans too.