The C.C. Sabathia Bargain

The New York Yankees had one single priority heading into the offseason: retain the services of the starting pitcher who has thrown more innings for his teams in the last five years than any other hurler in baseball. It’s a credit to the organization’s management that they didn’t waste any time in getting this done.

While technically, C.C. Sabathia didn’t officially opt out of the remaining four years of his contract with the Yankees which would’ve paid him $92 million. He and his management team did negotiate a shiny new deal to stay in New York that ensures the big left hander receives more money annually than any pitcher ever has before. Sabathia and the Yankees agreed to terms on a guaranteed $122 million over the next five years, or $24.4 million per year.

The contract also includes a $25 million option for 2017 that automatically vests unless Sabathia ends the 2016 season on the Disabled List with a shoulder injury, spends more than 45 days on the DL in 2016 due to a shoulder injury or makes at least six relief appearances in 2016 due to shoulder issues. I wonder if the Yankees have ¬†any long term concerns about Sabathia’s shoulder.

According to FanGraphs, over the first three years of his time in New York, Sabathia’s pitching provided the Yankees with more than $100 million in free agent value, all for the bargain basement price of $69 million.

There are two ways of looking at this extension. If you want to consider it combined with his first three years in New York as one deal, then Sabathia need only provide approximately 12 wins above replacement over the next five years for the Yankees to come out ahead in terms of free agent spending. If you want to divide the terms and consider this extension a separate free agent contract, the Yankees would really only expect approximately 20 total wins above replacement from Sabathia over the next five years.

In other words, they’ll pay him to be a 4 WAR pitcher every year from ages 31 – 35. Even anticipating declines and the option vesting (adding a roughly six wins above replacement expectation), the deal looks incredibly good considering that Sabathia hasn’t had a sub four WAR season since 2004 with Cleveland. He can be three quarters the pitcher he has been over the entire length of the contract, and the Yankees will still come out ahead.

The perception exists that New York has found so much success over the last decade and a half by simply throwing money around. Certainly, recent extensions to some of their veteran players combined with annually having the highest payroll in the league hasn’t helped this perception.

However, as the organization continues to deal with the most elite players, deals like Sabathia’s have little in common with the legacy spending of the past off season. We hear that it’s the most money ever given to a pitcher and immediately assume it’s typical Yankee business, but in reality, Sabathia’s contract is smart business. There are few more reliable pitchers in the league, and the terms set out, while, yes, making him the highest paid pitcher annually, more than make up for any expected declines due to age.

What’s truly astounding is that they made this rather brilliant deal with their number one off season priority before November even started. We’ve heard whispers about C.J. Wilson and other free agent possibilities and the Jesus Montero trade watch is almost always on, but no matter what other transactions await this organization over the winter, it’s doubtful any will appear as a bigger win than their extension with C.C. Sabathia.