The Captain's Blog

(The following was originally published at SB*Nation’s Pinstriped Bible)

It’s good to be King. (Photo: AP)

Long-term contracts rarely end well, especially for pitchers. That’s the conventional wisdom at least. Although that position is probably too extreme when you look at the history of long-term deals, there’s obvious truth in it. Any time an organization shells out big bucks to one player, they are taking a sizable risk. However, some risks are better than others.

The trade market for Felix Hernandez officially closed yesterday when the Mariners signed their ace right hander to a seven-year deal fit for a king. At $175 million in total and $25 million per year, the contract makes Hernandez the highest paid pitcher in major league history (excluding Roger Clemens’ pro rated salary of $28 million in 2007). And, you know what? He deserves every penny.

Top-10 Average Annual Salaries for a Pitcher

Source: Cots Contracts

Since breaking into the major leagues in 2005, Felix Hernandez has consistently ranked among the best pitchers in the game. Over that span, the righty has compiled an ERA+ of 127 in 1,620 innings, a mark bettered by only five others with at least 1,200 innings, and fWAR of 38.3. On a performance basis, Hernandez has been money in the bank, so it’s about time the Mariners returned the favor.

Another impressive statistic in Hernandez’ favor is 27, the age at which he starts his new contract. Unlike most free agent deals, which are signed when a player is about to exit his prime, Hernandez is just beginning his golden years. Granted, the Mariners’ righty has logged a lot more innings than most 27-year olds, but it’s equally notable that he has done so without a significant injury. Sure, his velocity has been in decline and his ERA+ has fallen from historic levels in 2009-2010, but his peripherals remain consistent and his durability unquestioned. That doesn’t guarantee Hernandez will continue his dominance for the next seven years, but it should earn him the benefit of the doubt.

Aside from performance and projections, Hernandez’ hefty payday is well deserved for another reason: economics. Baseball is currently experiencing a boom cycle. With revenues exploding, thanks in large part to the voracious appetite of regional sports networks, there is plenty of money to go around. So, why shouldn’t the best players get their share? In that sense, Hernandez’ salary is no more inflated than the exorbitant rights fees being paid to teams. Is $175 million too much for Hernandez? Is $7 billion too much to air Dodgers’ games? You decide.

Here’s one more point from the business side to consider. In 2015, the Mariners have an opt-out clause in their contract with ROOT sports, which only pays the team $45 million per year. Meanwhile, Hernandez’ new deal ensures he’ll still be with the team at that time. Is that a coincidence? When, not if, the Mariners re-negotiate the terms of a new deal, the answer to that question should be abundantly clear.

If performance- and finance-based arguments haven’t convinced you, how about fairness? According to fangraphs.com, Hernandez has already provided $162 million worth of value, but his total earnings to date are only about $43 million. Even if Hernandez wound up being mediocre over the course of his new deal, the Mariners would still wind up coming out ahead. After years of taking advantage of the six-year reserve clause, which prevents players from being paid commensurate with their performance, Seattle can’t complain about finally having to pay market value.

Valuation Gap: Felix Hernandez’ Salary vs. Performance

Note: 2005 is an estimated pro rated figure.
Source: Cots contracts (salary) and fangraphs.com (value)

Although the length and terms of Hernandez’ new contract are not outlandish, all things considered, the timing is questionable. With two more years worth $40 million left on his current deal, the Mariners did not have to offer Hernandez an extension. Considering the inherent risk associated with pitchers, it may have been prudent to wait another year before offering him an extension. Then again, the Mariners may have looked at the six year, $147 million deal the Dodgers gave to Zack Greinke and concluded they wanted no part of a potential bidding process in 2015. After all, if Greinke, who is older and inferior, was able to command such a lofty salary, how much would Hernandez get on the open market? If he remains healthy, the extra five-years and $140 million that the Mariners tacked onto Hernandez’ current deal could look like a bargain.

It’s hard for fans, media, and even owners who write the checks to accept the high salaries paid to elite athletes. Even some of the athletes, like Mark Teixeira for example, can’t fathom the number of zeros listed on their checks. However, the athletes are the ones who play the games, which, in turn, are the team’s greatest asset. The reason the players are worth millions is because franchises are worth billions. In baseball, this relationship is exacerbated by the reserve clause, which, to the teams’ advantage, basically forces players to defer salary until later in their career. So, when elite performers like Hernandez finally get a chance to exert leverage (even if it’s only the threat of using it), they are entitled to every penny they receive. For most of his career, Hernandez has been a “professional hostage”. It’s about time the Mariners finally paid the ransom.