I had a reader ask me about what exactly the rumored six-year $50 million was. Now, I have nothing inside about this rumored offer, everything you are going to read here is an educated guess.
Let’s start with the dollar figure, $50 million. It seems likely that dollar figure includes a signing bonus, something every player drafted gets when they sign with a major league team. I compiled the signing bonuses of the top five selections over the last four MLB First Year Player Drafts (2005-2008).
As you can see, the top bonus out there was a $6.2 million bonus for Giants CA Buster Posey. Let’s just assume Strasburg breaks that record with a $7 million signing bonus (it makes the math easier later on).
That leaves $43 million to be allocated. It seems almost guaranteed that Strasburg will receive a major league contract which immediately places him on the 40-man roster.
I would imagine that Boras is looking at a contract with similar parameters to what David Price or Pedro Alvarez received in the past two drafts. Basically, Strasburg would receive a major league salary if he was on the 25-man roster and a minor league salary, if not.
Here is my back of the envelope guess of how that $43 million could be spread out.
- 2010: $1 million if on the major league roster; $100K if in the minors
- 2011: $2 million if on the major league roster; $200K if in the minors
- 2012: $5 million if on the major league roster; $500K if in the minors
- 2013: $8 million if on the major league roster; $800K if in the minors
- 2014: $12 million if on the major league roster; $1.2 million if in the minors
- 2015: $15 million if on the major league roster; $1.5 million if in the minors
That adds up to a six-year $50 million contract. But that is its maximum value. The contract could be worth less than that if the Nationals were to option Strasburg to the minor leagues for four full seasons, which according to the CBA they could do. If he spent the full 2010-13 seasons in the minor leagues, the Nationals would be on the hook for $1.6 million in minor league salary and $27 million in major league salary. Adding that to the the signing bonus and you have a $35.6 million outlay.
I don’t believe that Strasburg is going to get anywhere close to the $50 million but that is how I could see it working out dollar-wise.
Beyond posturing, what exactly could Boras be trying to do with such an offer?
- He is attempting to get Strasburg paid well beyond what the MLB CBA dictates players with his service time can receive. Players in their first three seasons have no control over their salaries. Teams are allowed to assign the salary according to some minimum guidelines. The major league minimum salary for 2009 is $400K. And teams will provide small raises over each of the next two seasons. Ryan Zimmerman made $1.192 million over his first three seasons of major league service. Given that the major league minimum increases slightly each year, it’s a good bet that Strasburg would make no more than $1.5 million over his first three years under normal rules. Once he hits arbitration and assuming he is performing as expected, Strasburg could expect to see a jump in his salary after his third year of service. Again using Zimmerman as the example, this past off-season was his first in arbitration. He agreed to a $3.325 million contract which was an over 600% increase in his salary. My guess-timate above has Strasburg earning more than double that ($8 million). And the same holds true for years five and six where Boras’ demands would far outpace what arbitration would normally dictate.
- He is attempting to accelerate Strasburg’s progress towards free agency. Boras is doing everything within his power to get Strasburg the six years of service time necessary for his client to hit his big payday at as an early an age as possible. Strasburg will likely sign his first professional contract at 21 years of age. If he spends the next six full seasons on the 25-man roster, he will be entering his free agency at age 27, his prime where if things go well, he could sign a Sabathia-esque deal (seven years $160+ million). While free agency is theoretically possible after 2015, I would imagine that the Nationals would delay his 25-man debut by about 30-45 days in 2010, just to push his free agency out one season (until after the 2016 season). Teams do this all of the time.
These are just a couple of reasons off the top of my head. There are plenty more and the ones I provided have additional nuances that are “inside baseball.”
I may be incorrect in specifics, but the generalities, I believe, are true. The bottom line is that Scott Boras (or his PR folks) are laying the groundwork for maximizing the financial opportunities of their client, Stephen Strasburg
#1 by Steven J. Berke - March 24th, 2009 at 10:53
Then you don’t believe, as some do, that the $50MM leak was aimed at scaring the Nats into drafting someone else, so that Strasburg can stay on the West Coast where his heart is (with the Mariners or Padres)?
#2 by Brian Oliver - March 24th, 2009 at 10:55
Not at all.
#3 by Andrew F. - March 24th, 2009 at 10:58
I’m with you, Brian, that setting the bar so ridiculously high allows Boras to still make out like a bandit when a “more reasonable” offer comes in, one that will still blow any other #1 deal out of the water.
#4 by JMUAlumni - March 24th, 2009 at 11:12
Your analysis seems to be spot on. I eventually imagine the deal will end up in the 20-30$ million range for total package worth (bonus + contract). Any chance Boras is attempting to “take down the draft system” using Strasburg as a catalyst? I find it unlikely, but I have read that hypothesis on other sites.
#5 by Brian Oliver - March 24th, 2009 at 11:15
JMU - I believe if there was going to be any year for Boras to attack the draft system, this is it. Combine the hype of Strasburg with the fact that he “advises” so many other top of the draft guys and I could see Boras doing everything is his power to turn the draft on its ear.
#6 by Dick - March 24th, 2009 at 11:17
Boras’ statement was not ridiculous on its face, as your analysis shows. It speeds up free agency among other things. Where the catch is for the Nats, or whoever drafts Strasburg, is what I’ll undeservedly call the ‘Boswell factor’. What if Boswell’s scenario comes true? Strasburg turns out to be overrated OR he turns out to be the second coming of (you fill in the blank) but gets hurt. The Nats wouldn’t have an easy way out then, would they?
I see a complicating factor entering into the picture for Boras. At this point, I’m not entirely convinced that Strasburg is all that much better than Gibson. That is no knock on Strasburg but shows me that Gibson has REALLY come on. My wife can attest that I am a HUGE Strasburg fan, too.
Right now, if I’m Rizzo and Stan and if the draft were tomorrow, if I thought I could take Gibson and sign him for $6-7 million (traditional first pick money) or fight with Boras until 12:15 am on August 16 over whether to guarantee a major league contract for 6 years, I’d take Gibson and roll the dice as to which one turns out to be a better pro!
The lack of success for pitchers has already made me think the Nats could do worse than taking Ackley and hope that Leake or Volz were around at #10. Our number 1 pick HAS TO HAVE A SUCCESSFUL BIG LEAGUE CAREER! See Mauer, Joe vs. Prior, Mark! Prior looked like the right choice, at least through the year he won 18 games, didn’t he? Even then, I’m not sure the Twins were crying in their beer over their consolation prize.
#7 by Brian Oliver - March 24th, 2009 at 11:23
Dick - I understand what your point but I would still would opt for Strasburg over Gibson … difficult negotiations and everything else that comes with it. Assuming Gibson gets $6-7 million and let’s just put Strasburg at a $20 million total package for argument’s sake. That’s a $13-14 million difference over six years. A MLB team can afford the extra $2 million and change per year to gamble on the guy all the experts consider “the guy”
#8 by Berndaddy - March 24th, 2009 at 11:23
Brian if the system goes down how bad will the difference be between the haves and have nots. NYY/NYM/BRS vs the world of baseball…
Do we really want to live in that world? Do we have a choice? Some how this system has to say intact, but reality sucks and we do live in a free market. Darn!!! Can’t blame Boras in the end though can we…if not him some other devil, eh…
#9 by Brian Oliver - March 24th, 2009 at 11:26
Berndaddy - I honestly believe that the initial response by the draft system could be really ugly with the big market teams grabbing every top guy for big dollars but the draft will begin to self-regulate over time. Every team has its limitations and while a team might consider signing the top 5 guys in the draft, that expenditure begins to add up over time and the uncertain results that come out of every draft will over time bring prices back some.
#10 by Dick - March 24th, 2009 at 11:41
Brian, I’d probably agree with you at $20 vs. $7. Not quite sure I’d go with a much higher differential, personally. My concern with Strasburg is the level of competition vis-a-vis Gibson.
Gibson is .87 WHIP against Strasburg’s .82. Gibson’s K/9 is 12.6 vs. Strasburg’s ‘otherworldly’ 19.2. Those differences don’t command unlimited resources in favor of Strasburg! And, as I have mentioned before, I wonder if Gibson isn’t doing it against superior talent?
Plus, I hate ‘experts’. I’m dying to meet one in real life and view them to be akin to unicorns and mermaids.
Finally, back to Boswell, even if the guy (demonstrably NOT an expert) didn’t particularly care for what he saw in Beijing, Strasburg’s numbers were quite impressive given his age and experience.
#11 by otf - March 24th, 2009 at 12:05
“Signability” has been an issue for years now, and I think we’ve been in the world some see Boras as trying to usher in for years now.
Aside from simply pushing the market price higher and higher, I’m not sure what more Boras and kids hoping to make millions off bonuses could ask for - I guess it’s possible that MLB ditching their “recommended” bonus levels would bring teams like the Astros into the bidding war, but I get the impression it’s only the cheap teams looking for an excuse not to spend money that currently go by recommended slot money. I’m sure somebody will let me know if I’m wrong!
#12 by Ben - March 24th, 2009 at 12:17
Is there not a very real concern with Strasburg that any kid that relies on a +100mph fastball could blow his arm. I’m not saying don’t sign him but, that risk should earn a severe discount from the numbers Boras is throwing out.
If they don’t think they can get a reasonable deal, the Nat’s should absolutely pass on him. Of course people want that talent in their farm system but, they need to balance him against money they need for other picks, the risk of pitcher and damage to the organization of not getting a deal done.
#13 by A DC Wonk - March 24th, 2009 at 12:19
So, here’s my question (from someone who just started following the draft 2 years ago) . . . how many pitchers in the past have experts considered “the guy”?
Which, I guess is another way of asking if Boswell is correct. Is it really true (and is Boswell saying) that in the history of the draft, there have been zero HoF pitchers taken in the top five?
If so, then experts proclaiming he’s “the guy” doesn’t mean a whole lot.
Boswell messed my head up today . . . is he right? Is there “the guy” every couple of years?
#14 by longterm - March 24th, 2009 at 12:24
What if the Nats actually want to blow the current system out of the water?
#15 by Brian Oliver - March 24th, 2009 at 12:25
Any pitcher can blow out their arm at any time, the 100+ thing has little to do with that in the big picture. The Nationals have been watching him for a few years. While people’s opinions of “experts” may vary, it’s a rare occasion where everyone seems to agree and Strasburg is apparently one of those guys. Yes, I have seen the mechanical analysis of his motion and there is history of an injury risk inherent with such mechanics, but this is one of those times where the risk is worth the reward in my opinion.
Strasburg is not going to get $50 million. No one is going to pay that if for no other reason than the precedent it sets for the future. Even the teams that throw huge dollars at the draft are going to be highly unlikely to write such a huge check for an unproven commodity for what it will do to the system going forward.
#16 by Dick - March 24th, 2009 at 12:27
What Ben said. . .!
My concern is one guy throws 100 mph and strikes out 19 per 9 with a .82 WHIP. The other guy throws 92 mph and strikes out 12 per 9 with a .87 WHIP. Which do you take? Particularly if one wants the moon and stars and the other would be pleasantly shocked to get standard first pick money. Rizzo will earn his stripes on this one!
I recall reading years ago that the human body cannot take the strain of throwing 100 mph and that 103 was considered the maximum the body could possibly absorb. It was written by an ‘expert’, of course.
I have always thought the first thing Strasburg has to learn is how to get outs throwing ‘only’ 94-95; or would that be lobbing for him? Whoever drafts him will be accused of screwing him up if he doesn’t immediately make the big club while striking out dozens a game! Particularly if the club does any coaching a all!
#17 by Brian Oliver - March 24th, 2009 at 12:31
DC Fan - The only name I can think of over the past ten years is Mark Prior. And over the last two decades, throw in Ben McDonald and maybe if you stretch it out Brien Taylor.
Both Prior and McDonald were labelled can’t miss out of college but much of their issues came from overuse/misuse in college (McDonald) and professionally (Prior). Taylor got hurt in a bar fight derailing his career before it started.
Yes, starting pitchers are gambles. But the problem for the Nats is as I commented earlier, there is not a 1A Joe Mauer in this draft. Grant Green and Dustin Ackley are good prospects but not that much different than what you typically find in a college class.
#18 by Brian Oliver - March 24th, 2009 at 12:38
I would not put too much stock in the triple digit readings. While he may be able to hit that number, his pitching arsenal is not dependent on a 100+ fastball. He throws in the mid to high 90s.
#19 by estuartj - March 24th, 2009 at 12:53
Could Strassburg be induced to sign in June if the team agreed to activate him on the 25 man before the date at which his arbitration clock would expire to be a FA after 2015 vs 2016?
Seems like a win-win, we get a fast signing and they get to hit the open market a whole year earlier. I think 6 years $20-25 mil does it, but I’m betting it will take a long time to work out those MLB vs MiLB guaranteed salary splits…
#20 by Brian Oliver - March 24th, 2009 at 13:11
estuartj - I thought about that. If Strasburg were to sign on the day of the draft, June 9, or whether he signed on the last possible date, August 15, AND he spent the entire time on the 25-man roster, he would still become a free agent after the 2015 season. It would not even impact his arbitration status (if my math is correct), he would still be arbitration eligible after the 2012 season. I cannot think of a reason to get in too much earlier than 8/15. The only thing I can figure is if Strasburg can get the Nationals to burn an option year on him in 2009 by signing in July, get optioned to the minors and thereby only have two option years remaining entering the 2010 season.
#21 by estuartj - March 24th, 2009 at 13:21
What is the carry over date for being optioned to make 2009 count?
#22 by Brian Oliver - March 24th, 2009 at 13:23
Technically he could have it used even if he signed late.
Strasburg would need to be optioned out for 20 days, so theoretically he could have used if he was signed on August 15, optioned out the same day, and then recalled on September 5.
#23 by Ted Leavengood - March 24th, 2009 at 13:25
Keith Law just posted his scouting report from watching Strasburg over the weekend against BYU. He talks about the stress Strasburg in putting on his arm to go from where he was pitching in 2006 to now and what the odds are that he will hold up–he compares him notably to Joel Zumaya. He discounts Boras as the source of the $50 million rumor and again, I think his reasoning is sound. I like his bottom line about whether the Nationals should pay the piper–he is ready to pitch for the Nats in 2010, better than anyone else in the rotation now, and will be a great draw worth the money. We just have to hope the arm holds up for longer than Zumaya’s.
#24 by Pilchard - March 24th, 2009 at 14:07
Off topic a bit, but Shairon Martis took a big step today to securing a spot in the Nats rotation: 6 IP 3 H 1 BB 4 Ks 0 ER. He now has a 1.42 ERA in 19+ spring innings.
Would think that this takes a little pressure off the Nats on the Zimmerman front as the Nats will not need 5 starters until the mid-to-late April, and Martis would be #4 behind Lannan, Olsen and Cabrera. Also, Roger Bernadina led off and played CF and had a triple.
#25 by Dick - March 24th, 2009 at 15:55
Rob Neyer has comments on Strasburg.
http://sports.espn.go.com/mlb/columns/story?columnist=neyer_rob&id=4012104
#26 by BinM - March 25th, 2009 at 17:18
I’ve said it before & I’ll say it again - Strasburg is a man amongst boys this year. Now, is he worth $50M right out of the gate - absolutely not; see my statement above. He hasn’t proven much of anything against professional hitters yet.
An $8-10M bonus, and a 5-6 year contract maxing at an additional $10-12M would still beat anything offered to a #1 previously. If Boras believes they can get better $$$ from taking him to Japan, then god speed & hope he doesn’t wreck his arm & career.
#27 by Bob Lowry - March 26th, 2009 at 06:57
Why are we spending so much time on a college player who will not contribute to the Nationals this season, if at all. The pitching pipeline is stocked. There are three young pitchers pitching well this spring and competing for the fourth and fifth positions in the rotation. The number one pitcher breezed through the minors after he was selected in the free agent draft.
I think we have greater needs to add every day position players who are more “predictable” as far as making an impact at the major league level.
I like Strasbug as a potential prospect, but not if it means breaking the bank to sign him. Lets keep more focused on building a complete team.
#28 by Brian Oliver - March 26th, 2009 at 07:14
Bob - The pitching pipeline can never be fully stocked. There is too much uncertainty there. The reason Strasburg is drawing so much attention is because he is the best talent available in the draft and the #2 option is not even close. The position players available might be more predictable but their talent ceiling is not close to Strasburg.
The other part is that we cannot think of the MLB draft like the NBA or NFL draft. You will very rarely if ever see immediate contributions from guys selected in the MLB draft. This draft is more forward looking, a year or more down the road. Even if the Nationals were to select a bat, he’s not going to be a contributor this year.
I understand people’s concern with cost versus risk, he’s not going to get $50 million.
#29 by Marc - March 26th, 2009 at 08:34
Bob - the reason we are is that the pipeline is “stocked” with guys who don’t look to be front-end-beasts. Zimmermann has pleasantly surprised, Balester, Mock, Chico, Bergmann have all disappointed, Martis is an incomplete, as is McGeary, Smoker, etc. None of them as yet look to be Cy Young-candidate type guys - so long as Strasburg’s shoulder doesn’t tear up, he’s better than all of them. That’s why we’re focusing on him. Talent-wise, I think you have to take him and pay him and hope that the word “Strasburg” is never in the same sentence with “Dr. James Andrews.”
A complete team isn’t really complete without several real frontline starters. To go WAY out on a limb, potentially, Strasburg-Zimmerman-Lannan could be the Smoltz-Maddux-Glavine of their generation. How’s that for wild optimism on a rainy day?!
That said, it’s nuts to pay that kid $50m.
#30 by Gavin B - March 26th, 2009 at 09:03
Brian,
Late to the party, but this post rocked. Awesome, awesome info.