MLB's Kyle Lohse Problem (AKA What to do With Pitching Contracts)

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I’ve let the Kyle Lohse extension sit for a few days; I didn’t like it when the rumors were breaking, and I don’t like it now.

The Cardinals just handed over $40MM and a no-trade clause to a pitcher who’s been average (at best) for his career.

This reminds me of a certain pitcher they acquired last year and signed to an extension after a little bit of success: Joel Pineiro.

The main problem with this deal is what to expect at the end of it. Lohse’s top comp by age on Baseball Reference is Jeff Suppan. Many Cardinals fans think this is a good thing; it was at one point. Suppan this year was 10-10 with a 4.96 ERA and 90 Ks in 177.2 innings. Suppan this year is the age Lohse will be at the end of the deal, where he’ll be making $11.5MM. I don’t think he’ll be worth that if he has a similar pitching line.

(Just for the record, his other comps include Jose Lima, Jason Jennings, Ricky Bones, Pineiro, and Steve Trachsel)

So, who will Lohse be blocking at that point? While they don’t have much ready in the minors now, I think the Cardinals have many options for the last 2 years of the contract. By then, Mitchell Boggs, Clay Mortenson, Jess Todd, Jaime Garcia, Tyler Herron, Adam Ottavino, Lance Lynn, David Kopp, PJ Walters, Scott Gorgen, and Mark McCormick could be better pitchers than Lohse at the MLB level. Some will be blocked by his presence. Those guys will also be cost control, with many making a little over the league minimum; I’m more comfortable with a guy making the minimum pitching those Suppan numbers than a guy almost making $12MM.

Before the end of the deal, the Cardinals will have to decide on what to do with Albert Pujols. His contract is good through 2011 (if they pick up his option). What happens if they don’t have the payroll to re-sign their top hitter? Lohse’s contract could prohibit that (if you figure you’d be paying a guy from the system $500k for similar, if not better, performance). That’s an estimated $11MM that could be used for the slugger.

Why not move Lohse at that point? The full no-trade clause would kill that. He’d have to approve any trade, which isn’t guaranteed. To get someone to eat the remaining money on the contract, you’d have to take nothing in return. I have no problem with that, but it goes back to Lohse approving a deal.

Just for fun, lets look at the playoff teams and see what their rotations have:
Angels – John Lackey, Ervin Santana, Joe Saunders, Jered Weaver
Brewers – Yovani Gallardo, Ben Sheets
Cubs – Carlos Zambrano
Dodgers – Chad Billingsley, Clayton Kershaw
Phillies – Cole Hamels, JA Happ, Brett Myers
Rays – James Sheilds, Andy Sonnstantine
Red Sox – Jon Lester, Justin Masterson
White Sox – Mark Buehrle, Clayton Richard

Notice a trend – these are all pitchers that have been developed by their team. Factor in trades that have brought in young pitchers (Kazmir, Garza, and Jackson for Tampa alone) and you see that successful teams needs to incorporate young pitchers with free agent signings.

On the flip side, look at how Carlos Silva, Barry Zito, Kevin Millwood, and Vicente Padilla have done since signing big, free agent contracts. All have bombed. Also, notice that none of their teams are listed above. Sure, some playoff teams have some dud sigings too (every team does), but they also have developed better pitchers to compensate for it.

Now, I’m not saying that teams shouldn’t sign free agent pitchers. Almost all of the teams above have signed free agent pitchers that have contributed; the Cubs rotation after Zambrano was all free agents.

My point is long deals for pitchers are bad ideas; it handcuffs your team. Look at Zito for example: the Giants couldn’t move him even if they paid his full contract. They also can’t try again with someone like CC Sabathia this winter.

The solution is going no more than 3 years for non-ace pitchers (even ace pitchers in some capacity). Now most pitchers want more than 3 years; the safe alternative is using either club or mutual options. If the pitcher gets to the end of 2 or 3 years and they have played well, the option guarantees that they will return. Many pitchers (and players in general) tend to perform better when they are in the last year of a deal; I’d say this would still happen with a good sized option on the line.

I’d also increase the base salaray for the guaranteed years; shorter deals with a little more money can reduce the amount of bad contracts a few years down the line and entice players who are looking for pay days. The Dodgers were able to lure Rafael Furcal by doing this (I know he’s not a pitcher, but it’s the same thing). The downside is teams will have to pay more attention to their farm systems to off-set some of the salaries (which I don’t see as a bad thing).

In this light, if I were the Cardinals GM and felt that Kyle Lohse was the best pitcher in our price range, I’d give him 2 years guaranteed at $10MM per season; I’d also tack on 2 club options for $15MM per year. If he pitches well enough, he’d get more money than the 4 year deal he did sign ($50MM over 4 vs $41.5MM over 4). If he’s done after 2 years, you’d have a smaller buyout to pay and little damage to the future payroll.