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Thoughts on Gallardo's $30 million/5 year extension?

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Thoughts on Gallardo's $30 million/5 year extension?

Postby Neato Torpedo » Thu Apr 08, 2010 4:48 pm

http://sports.yahoo.com/mlb/news?slug=a ... s-gallardo

MILWAUKEE (AP)—Pitcher Yovani Gallardo(notes) and the Milwaukee Brewers agreed Thursday to a $30.1 million, five-year contract, a deal that could be worth $42.5 million over six seasons.

The agreement covers the right-handers arbitration-eligible years and the first season after he would have become eligible for free agency.

Gallardo receives a $1.25 million signing bonus: $500,000 payable when the contract is approved by Major League Baseball, $500,000 on July 15 and $250,000 on Nov. 15. He gets salaries of $500,000 this year, $3.25 million next season, $5.5 million in 2012, $7.75 million in 2013 and $11.25 million in 2014. Milwaukee holds a $13 million option for 2015 with a $600,000 buyout.


What a fantastic bargain for the Brew Crew. 8-o About $6 million per year (or about $7 million if the option is picked up) for a rising star pitcher is incredible, especially with guys like Zambrano and Zito being paid 3 times as much.
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Re: Thoughts on Gallardo's $30 million/5 year extension?

Postby The Mighty Trow » Thu Apr 08, 2010 9:15 pm

Tough economy these days :-b

My first reaction was shock, too. After reading up on it, I'm a bit more comfortable with it. This deal appears to be very similar to the one Lester signed a year ago, so there is precedent. IMO the ballclub makes out, Gallardo gets security and a very reasonable shot for another big contract before he's considered too old.

What I'm most interested in is to see how the Brewers spend the money they're 'saving' here.
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Re: Thoughts on Gallardo's $30 million/5 year extension?

Postby bigken117 » Thu Apr 08, 2010 9:20 pm

As soon as this year it could look like one of the best deals in baseball.
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Re: Thoughts on Gallardo's $30 million/5 year extension?

Postby Matthias » Thu Apr 08, 2010 11:12 pm

Key sentence here.

The agreement covers the right-handers arbitration-eligible years and the first season after he would have become eligible for free agency.


So if you give him $12MM as his FA year, which is about where his option year is priced, he's getting $18MM for 4 years of arbitration. I don't pay that close of attention to how arbitration awards shake out, but $4.5MM a year sounds about right, maybe $2MM a year low. And in exchange, he gets security if his arm blows up.

Looks like an overall fair deal to both sides.
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Re: Thoughts on Gallardo's $30 million/5 year extension?

Postby Grounded Polo » Fri Apr 09, 2010 1:09 pm

Pretty good deal considering that his real value is probably close to triple that per year.
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Re: Thoughts on Gallardo's $30 million/5 year extension?

Postby Matthias » Fri Apr 09, 2010 11:14 pm

Grounded Polo wrote:Pretty good deal considering that his real value is probably close to triple that per year.

Not considering this is an arbitration year, he isn't.

Billingsley agreed to a $3.85 million contract this year to avoid arbitration. Matt Kemp signed a 2 year deal for an average of $5.5 million per. Lincecum signed a contract for 2 years for $11.5MM after winning his 2nd Cy Young. Wandy Rodriguez lost his arbitration case and had to settle for $5MM.

So again, considering that Gallardo now has financial security, I think the deal is fair to both sides. Not a major steal either way, though.
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Re: Thoughts on Gallardo's $30 million/5 year extension?

Postby Grounded Polo » Sat Apr 10, 2010 10:00 am

I was purely talking about what he could get if he could hit the open market and sign a huge free agency contract.
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Re: Thoughts on Gallardo's $30 million/5 year extension?

Postby Neato Torpedo » Sat Apr 10, 2010 10:16 am

Matthias wrote:
Grounded Polo wrote:Pretty good deal considering that his real value is probably close to triple that per year.

Not considering this is an arbitration year, he isn't.

Billingsley agreed to a $3.85 million contract this year to avoid arbitration. Matt Kemp signed a 2 year deal for an average of $5.5 million per. Lincecum signed a contract for 2 years for $11.5MM after winning his 2nd Cy Young. Wandy Rodriguez lost his arbitration case and had to settle for $5MM.

So again, considering that Gallardo now has financial security, I think the deal is fair to both sides. Not a major steal either way, though.

Yeah but this is slightly over $3 million/year for the next 3 years which is cheaper than any of those guys.
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Re: Thoughts on Gallardo's $30 million/5 year extension?

Postby Matthias » Sat Apr 10, 2010 10:39 am

Neato Torpedo wrote:
Matthias wrote:
Grounded Polo wrote:Pretty good deal considering that his real value is probably close to triple that per year.

Not considering this is an arbitration year, he isn't.

Billingsley agreed to a $3.85 million contract this year to avoid arbitration. Matt Kemp signed a 2 year deal for an average of $5.5 million per. Lincecum signed a contract for 2 years for $11.5MM after winning his 2nd Cy Young. Wandy Rodriguez lost his arbitration case and had to settle for $5MM.

So again, considering that Gallardo now has financial security, I think the deal is fair to both sides. Not a major steal either way, though.

Yeah but this is slightly over $3 million/year for the next 3 years which is cheaper than any of those guys.

Well, depends on how you value the FA year, but I'd say $12MM is a good number, which makes the arbitration years $3.5MM per.

That's slightly less than Billingsley but Gallardo now has financial security. Kemp is better than Gallardo. And Linceum already has two CY's. And this covers Gallardo's first year of being eligible for arbitration when I think players traditionally get less. Something else to consider is: "Gallardo’s agreement replaced a one-year contract that Milwaukee had renewed for $450,000 last month." So really, the contract could be thought of as:

This year: $450,000
2011, Arb Year #1: $3.5MM
2012, Arb Year #2: $5.5MM
2013, Arb Year #3: $8.5MM
2014, FA Year: $12MM

Those are pretty fair numbers. I'm not saying that this isn't a good deal for the Brewers, but I don't think it's a super steal. Sure, when you compare them to CZam or Zito who were FAs it looks criminally cheap. But that's just a reflection of the differences in negotiating power. So the Brewers move forward, knowing that they have their best pitcher locked up for the next 4 years and can avoid the distractions of contract issues. And Gallardo knows that if his elbow was to explode tomorrow, he still has enough money to provide for his family for the rest of his life. It's one of the rare cases that really are a win win.
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Re: Thoughts on Gallardo's $30 million/5 year extension?

Postby kab21 » Sat Apr 10, 2010 12:16 pm

Grounded Polo wrote:I was purely talking about what he could get if he could hit the open market and sign a huge free agency contract.


Waiting a whole extra year for that big contract will be devastatingly long?

Note - there is a club option which could prolong FA an extra year but it can be voided if he obtains cy young votes (6 pts).
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