Transaction Analysis: Oh, Hello David

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Reportedly signed LHP David Price to a seven-year deal worth $217 million. [12/1]

David Price is the most expensive pitcher in the history of baseball, and he’s a Boston Red Sox. The Dave Dombrowski era is real and it is spectacular.

Often times, we look at personnel changing organizations and the way teams are lined up and connect dots that aren’t really there. We’ve been reading about the “ Dombrowski + big payroll + bad rotation = David Price” equation since the moment the former Tigers GM landed at Logan. It was almost too obvious.

And yet, oddly enough, the GM known for handing out mega-deals to starting pitchers gave a mega-deal to a great starting pitcher. A team with money to spend and a gaping hole in their rotation coughed up an eye-popping amount of cash to fill that hole with aplomb. And Dave Dombrowski has now traded for, traded away and signed David Price in the span of about 18 months.

The total terms of the Price deal are reported as $217 million for seven years, with an opt-out for the 30-year-old southpaw after three seasons. Price will get $30 million per year from 2016-2018, $31 million in 2019 and $32 million from 2020-2022. He will head a Red Sox staff that finished 16th in cFIP in 2015, and his signing leaves Zack Greinke and Johnny Cueto as the last two aces remaining in what was a very strong class of free-agent starters.

In the immediate aftermath of Price’s signing, we’ve already seen the usual rhetoric on both sides of the aisle. The Anti Free-Agency Contingency is bravely pointing out that, come 2021, David Price is likely to be overpaid. The Grasping for Straw-ers exclaim that this is John Henry’s money, you see, and so it’s all well spent. We could dive into why fixating on the end of free-agent contracts is lazy and how the “just spend all the cash” crowd ignores opportunity cost. Hell, we could even conjure up false dichotomies involving Jon Lester or talk about the postseason! But let’s not. Those are silly, silly things.

Instead, it’s more interesting to dive into the specifics of the Price contract, which is fascinating in how it impacts the Red Sox now, how it may impact the Red Sox down the line and how it stands up to other recent pitcher mega-deals.

Let’s start with that last and broadest point first. Price’s $31 million AAV is tied for tops in the sport with Miguel Cabrera, and his $217 million is the most money ever handed out to a pitcher, narrowly eclipsing Clayton Kershaw’s $215 million extension in 2014. That probably seems odd, since Price isn’t as good as Kershaw or Cabrera, but welcome to the laws of inflation.

As the talented Tim Britton of The Providence Journal pointed out, here’s what the largest recent contracts for pitchers over the past few years look like once you adjust for inflation:

Adjusting for inflation, where Price's deal ranks with recent ones for SPs in 2016 dollars: pic.twitter.com/JtP58SDd4Z

— Tim Britton (@TimBritton) December 1, 2015

That seems about right, doesn’t it? Price comes after Kershaw, who is better than Price but was not a free agent when he signed, and Sabathia’s first deal, which is actually a pretty good comp for where Price is right now. It makes Max Scherzer’s contract from last year look like a bit of a steal, and makes the Sabathia II and Matt Cain deals look particularly egregious.

Does Price deserve this hefty payday? Yes, in relation to his peers. Here’s how he compares in terms of WARP accumulated and age at signing to the four names around him on Britton’s list:

The answer is also “yes” if we just talk about Price. He’s coming off the second-best season of his career by WARP, is remarkably consistent, has a clean bill of health for a pitcher, is lauded for his clubhouse presence, is athletic and is left-handed. That’s pretty much everything you can look for in a pitcher, and while everyone who hucks spheres for a living is an inherently risky investment, Price would appear to be a relatively safe one among them.

That’s a big part of the reason why Price is arguably the best free agent starter to appear on the market since the Zack Greinke of the 2012-2013 class. He’s younger than the Greinke who is his free-agent contemporary this year, has been more consistent than the crown jewel of the 2014 class, Scherzer, is just flat out better than Lester and is more proven than Masahiro Tanaka was when he signed in 2013. In other words, Price doesn’t just represent the top of the free-agent pitching class right now; he’s near or at the top for the last half-decade.

How long will he remain the game’s highest-paid pitcher? Perhaps only until whenever Greinke signs his next deal this offseason. Perhaps until this time next year, when Stephen Strasburg figures to be a free agent, or this time in 2017 when Jake Arrieta will hit the market. Maybe we’ll see Chris Sale or Jose Fernandez sign an extension and surpass Price. It’s hard to predict exactly when Price will lose the mantle as the game’s top-paid arm, but odds are he won’t hold that crown for as long as you’d think. That’s how these deals work, and you need only look back at Kershaw’s 2014 pact to know that’s true.

Still, $217 million is an incredible sum of money, even if it’s less jaw-dropping once inflation and Price’s peers are considered. Why would the Red Sox, an organization that’s recently proved reluctant to give money to free-agent pitchers, set a record with their past nemesis?

We can look to the obvious first: the Red Sox really, really needed a good starting pitcher. While advanced metrics suggest they were a tad unlucky in 2015, Boston’s rotation last season was still atrocious. Clay Buchholz got hurt (shocker) while Rick Porcello and Joe Kelly were initially abysmal. Eduardo Rodriguez and Henry Owens did what young pitchers do, Wade Miley was average and dear god let’s not even talk about Justin Masterson. Sans Masterson, that’s the same crew they were going to roll out there in 2016.

Thanks to this signing, Boston can now go with a more respectable Price-Buchholz-Rodriguez-Porcello-Miley rotation, with Kelly, Owens and Brian Johnson serving as reserves. Plus, we’ve already heard rumors that the Sox might shop one of their average-ish starters to either obtain more upside in their rotation or restock their still-potent farm system.

Why spend all that money on Price instead of trading from a collection of talent still deep enough to land almost any available starter in the game? Because while John Henry and co. are clearly moving on from one organizational philosophy—a refusal to dole out big bucks to free-agent starters—they’re still committed to the dream of the “player development machine” Theo Epstein promised so many years ago. It might have been painful for Henry to part with $217 million, but it would’ve been more painful to part with Xander Bogaerts, Mookie Betts, Blake Swihart or their remaining upper-tier prospects for an arm. Especially when Price was sitting there on the market, available for nothing but cold hard cash, including the draft pick the Sox didn’t lose by signing Price instead of Greinke.

Everyone in the world knew the Red Sox would add a starter or two this offseason, and despite all of the “no one needs an ace” rhetoric we were subjected to last year, it was pretty clear that Dombrowski was eyeing a top-of-the-line arm. They acquired the top-of-the-line arm in Price, and when you also factor in the additions of Craig Kimbrel and Chris Young, the Red Sox very likely have already added 7+ WARP to their 2016 roster. Those three have also added about $50 million to Boston’s 2016 payroll, and at this point the team lacks much financial flexibility heading into next season.

That being said, the Red Sox figure to have at least $35 million coming off the books in 2017 (David Ortiz, Clay Buchholz, Koji Uehara, Ryan Hanigan). While it’s easy to view the Red Sox as buried under the contracts of Price, Pablo Sandoval and Hanley Ramirez, there’s a decent chance they could be serious spenders around this time next year, too.

None of this mitigates the enormous risk that the Red Sox are taking in devoting $30-plus million annually to a professional baseball thrower, of course. There is substantial downside involved here, as there is with any mega-deal, and while Price seems like a solid bet for a pitcher, he’s still a pitcher.

Plus, while the three-year opt-out is being lauded in many circles as a blessing for the Red Sox, it’s clearly more of an asset to Price. Opt-out clauses are always good for players, as they provide an option to further maximize earnings without introducing any risk into the equation. They can work out for teams—as the first Sabathia contract would’ve for the Yankees had New York been brave enough to cut bait—but everything needs to break just right.

Could Price pitch his butt off for the next three years and re-test the market after 2018? Sure, and if that’s what happens, the Red Sox will have “won” this contract. They will have essentially signed David Price for three years and $90 million, which is a deal all 30 teams should be willing to make today.

But Price will be 33 when his opt-out clause triggers, and he’ll need to still be vintage Price if he wants to do better than the four-year, $127 million deal he’s guaranteed to receive from Boston for his age-34-37 seasons. If Price is good instead of great, if Price is hurt or if Price simply doesn’t believe he’ll get a substantially better offer, the Red Sox are going to be on the hook for a lot of post-prime performance—think the second Sabathia deal as a worst-case scenario. Are the Red Sox better off with this clause in the deal than they would be without it? Probably. But it hardly makes this contract a safe one.

That’s okay, though. The Red Sox have been straight-up awful for three of the past four seasons. That’s why Ben Cherington lost his job, and that’s why Dombrowski was brought in; to build a bridge from the David Ortiz/Dustin Pedroia era to the Xander Bogaerts/Mookie Betts one, and to make sure the team is relevant while that bridge is being perfected.

Locking down Price and Kimbrel for at least the next three years goes a long way toward accomplishing that goal, and it’s only December 2. Say what you want about Dave Dombrowski, but the man is certainly living up to his reputation.

Fantasy Impact

Outside of 32 starts with the Tigers over the past two seasons, Price has spent all of his seven full big-league seasons in the American League East, and he is obviously quite comfortable staying there for the next seven years, too. (Or at least the next three). Price’s overall numbers shouldn’t change too drastically as he changes addresses over the next few seasons (as you would expect from an elite starting pitcher entering his age-30 season). But, while Toronto is often being hailed as a right-handed hitter’s paradise, Fenway Park continues to also be a highly pleasurable place for right-handed hitters to conduct their mashing:

Park Factors by Handedness (RHH) 2010-2015

After Price’s HR/9 number reached it’s highest rate in 2014 (0.91 per game) since his 1.19 mark allowed in 2009, it settled back down to an impressive 0.69 mark in 2015—good for sixth in the American League (min. 100 IP). Price held righties to the lowest HR/9 mark (0.71) of his career and struck them out at the second-best rate (26.9 percent) this season, certainly encouraging signs that he can make the transition to Fenway. Price’s 18 wins in 2015 were the third most of his career and, as unpredictable as those are, he’s averaged a shade under 15 in his seven full seasons; he should finish in that vicinity once again with an improved Red Sox bullpen in 2016. However, expecting him to duplicate his career-best 2.45 ERA (which led the American League in 2015) is probably too much; his DRA of 2.89 this season is in the same neighborhood as the 3.18 ERA he posted as a member of the Rays from 2008-2014.

Dynasty league owners were licking their collective chops in anticipation of Price moving to the National League—particularly at the prospects of calling Dodger Stadium or AT&T Park home–but make no mistake, this is an elite fantasy option who finished sixth overall among starting pitchers in standard mixed leagues according to ESPN’s Player Rater and earned $32 in AL-Only leagues (good for second best), according to Tout Wars beast Mike Gianella. If Price continues his good work against right-handed hitters in 2016, he should be a strong bet to repeat his earnings. —J.J. Jansons