On Friday, Masahiro Tanaka chose not to opt out of his deal with the New York Yankees, and will make $67 million over the next three seasons (the final three years of his seven-year, $155 million deal). It’s a fairly surprising move to the baseball industry, though Tanaka called it a “simple decision” in his statement released by the Yankees.
— Yankees PR Dept. (@YankeesPR) November 3, 2017
The assumption was that Tanaka would be able to get a four or five-year deal with a similar average annual value from a team in free agency (or, at least be able to get one more season out of the Yankees). MLB Trade Rumors listed Tanaka as their No. 5 — assumed — free agent on Thursday, and predicted he would get a five-year, $100 deal. That deal would represent a slight decline in AAV, but the years outweigh that with the frequency pitchers suffer injuries and the chance of decline in future performance.
$100 million — and even the three years, $67 million — may seem a bit nuts for a pitcher that had a 4.74 ERA in 2017, ninth-worst among qualified MLB starters. But Tanaka was very good in the second half, with a 3.77 ERA and 3.41 FIP. And he was absolutely outstanding for the Yankees in the postseason, putting together a 0.90 ERA in three starts. This is all just one year removed from Tanaka having a 3.04 ERA and 5.4 WAR for the Yankees, and his velocity was even better in 2017. Under-30-year-old pitchers with this kind of track record and upside are going to get paid serious money in free agency, especially right now when there are few other quality starting arms on the free agent and trade market.
Looking at the trade market for starting pitchers of this level, the names that may be floated out there are Chris Archer, Marcus Stroman, Jacob deGrom, and Jeff Samardzija, but all of those arms may not be truly available. And if they are available, you’ll have to give up top prospects to acquire them (and in Samardzija’s case, pay a large amount of the remaining $54 million on his contract).
So, Tanaka choosing to opt-in is great for starting pitchers on the free agent market, particularly Yu Darvish and Jake Arrieta. With Tanaka no longer available, and Shohei Otani possibly not coming over to the majors this offseason after all, Darvish and Arrieta are set to really cash in. They’re really the only two frontline-level arms on the market, and literally every team is looking for pitchers like this. Free agents like Lance Lynn and Alex Cobb are solid pitchers, but these are second-tier, middle-of-the-rotation guys (and most likely back-of-the-rotation pitchers on championship contenders).
And hey, you may not feel too confident in Darvish right now either, after he just put together an incredibly brutal two starts in the World Series. But most organizations will look past that (and he was actually really good in the postseason starts before the World Series). He’s been an annual 3-to-5-WAR pitcher and is a four-time All-Star in his six major-league seasons. He has electric stuff — despite what the World Series showed— and, like Tanaka, saw a velocity increase in 2017. MLB Trade Rumors has Darvish ranked as the top free agent on the market, and — even before the Tanaka news — predicted he would get a six-year, $160 million contract.
Arrieta probably benefits from the Tanaka decision more than Darvish does. It’s likely every team values Arrieta differently, with the 2015 NL Cy Young winner struggling with command the last two seasons and seeing a velocity drop in 2017. The velocity drop may be particularly concerning to some teams; that’s not something that usually gets better for a pitcher in their 30s, and Arrieta will turn 32 before the season starts. However, Arrieta has an incredible work ethic and keeps himself in fantastic shape, so it’s very possible he’s able to be a really good pitcher for several more years and maybe sees a velocity bump again. And his 3.53 ERA in 2017 is fairly deceiving; he looked like a completely different pitcher in the second half with a 2.28 ERA. Teams will have their concerns with Arrieta, but the ace potential is still very much there and it’s easy to see him getting paid more than anticipated with the lack of quality arms on the market.
Finding top-of-the-rotation arms is always difficult, and it should be especially difficult this offseason. Tanaka being unavailable immediately removes one of the top three pitchers from the free agent market, and figures to drive up the price of the other two.