Clay Buchholz just cashed in on his breakout 2010 season, signing a 4 year, $30.5 million extension with the Boston Red Sox. It was announced in a press conference on Sunday, the first such press conference this week with another potentially to follow shortly with Adrian Gonzalez’s extension.
Much like Gonzalez’s rumored extension, this was something Red Sox followers have been speculating on since Buchholz finished 6th in the American League Cy Young vote. We at Boston Sports Then and Now even commented on the potential for an extension for the young right hander in his 2010 Player Preview:
“While 2011 may not be a traditional contact year for Buchholz, if he wants to follow the Jon Lester salary career path it just might be. At this stage in his career Lester signed his 5 year, $30 million contact with a team option for 2014.”
From the looks of it, that is the exact deal that the Red Sox and Buchholz’s camp used as a model for the deal (and one many other rising star pitchers have used as a model as well), buying out all of his arbitration years as well as one free agent year. The difference here is that, in addition to the one free agent year, the Red Sox also included two years of team options. Therefore, the deal breaks down like this according to Peter Abraham of the Boston Globe:
2011 – Current salary of $550, 000 plus a newly added $1 million signing bonus
2012 – $3.5 million
2013 – $5.5 million
2014 – $7.7 million
2015 – $12 million
2016 – $13 million team option or $245,000 buyout
2017 – $13.5 million team option or $500,000 buyout
2015 would have been Buchholz’s first free agent year, and now the Red Sox have the option to retain Buchholz for three additional years, through his age 32 season. Red Sox GM, Theo Epstein, has indicated that buying out one year of free agency was team policy for extensions such as this. Epstein said that buying out FA years was essential to this deal as he told Nick Cafardo of the Boston Globe,
“While it’s a lot of money, compared to what it cost to bring in a free agent pitcher on a long-term contract, it’s not that much money, so it made the risk-reward worth it from our perspective. Without the option years and flexibility, it gets a little less comfortable from the club’s standpoint.’’
The reason Buchholz would do this type of deal is simple to understand. With a young wife a child the guaranteed money meant a good deal of security for his family. The key for the Red Sox was getting cost certainty, and also the ability to have the rights to the player for the prime of his career, years longer than simply going through the arbitration process.
The question remains, how good of a deal was this for the Red Sox? The answer in short is that is it a very good deal for the team, with the two option years really tipping the scales. Salaries are expected to continue to increase for the foreseeable future, and most likely just the three free agency years would have netted Buchholz more on the open market than the total $56.5 million he will earn if all the options are picked up. An average annual salary of $9.4 million is a steal for a pitcher of Buchholz caliber. This also affords the Red Sox the ability to take on other large contracts, such as the ones just given to Crawford, Lackey and Beckett as well as gives them the cost certainty to commit to the eventual $20+ million annually that Gonzalez will require.
Those of you who love to see the glass as half empty must be wondering, “Well, what if Buchholz’s 2010 was an aberration and not a breakout? What if he regresses dramatically?” Expecting another 2.33 ERA from Buchholz is unrealistic, but expecting more than a full run regression might be too aggressive in the other direction. Bill James has Buchholz penciled in for a 3.54 ERA and ZIPS has him projected at 3.79, and I believe somewhere in between those is about right. He did have his highest pitch value of his career on his fastball, changeup, and slider and a regression in any of those pitches could affect his overall performance. However, I should also mention that those results could be due to the highest velocity of his career, and also possibly increased command at the major league level – something that was regarded as one of his strengths in the minors.
Buchholz had a 3.7 WAR (wins above replacement) last year, which – according to Fan Graphs – would make him worth $14.7 million on the free agent market. Even if his conventional stats such as ERA regress a bit there are still other ways Buchholz can add value. He only threw 173 innings in 2010, and it is well within reason to expect Buchholz to increase that by around 30 innings this year. That has tremendous value – one example of why John Lackey’s 2010 was underrated – and would only add to Buchholz strong resume.
He is also still only 26, and therefore there is still hope for further development as well. His strikeout rate in the minor leagues was well over 10 strikeouts per 9 innings, but he did not miss bats with the same regularity in the majors last year. He seemed to trade swing and miss stuff to pitch to contact more. The ability to make that adjustment should mean that he is either able to go deeper into games now, or use his new confidence to attack hitters more and use his knock out changeup to increase his strikeout rate.
Overall, even accounting for a reasonable regression, this deal is an extremely team friendly one and one that should give the Red Sox the freedom to not limit themselves in other deals. Ideally if the young pitcher continues to develop, they could have two young pitchers – along with Lester – contending for the Cy Young every year, while making peanuts compared to other established aces.