When the Washington Nationals added right-hander Edwin Jackson to their corps of starters two weeks ago, his $11 million deal made him the highest-paid pitcher on the staff for 2012. But baseball's new Collective Bargaining Agreement could make his contract more advantageous to the Nationals than it originally appeared.
At first blush, $11 million sounds like a lot for a pitcher who projects as the No. 4 starter — especially considering the rest of the staff will make just more than $17.5 million in combined salary.
But when the Nationals signed Jackson to the one-year deal, they did so knowing that the new CBA changes the stipulations for offering a prospective free agent salary arbitration at the conclusion of the season. Gone is the anxiety that an offer could result in an astronomical salary for an aging veteran, often past his prime but coming off a high-paid year.
In its place is a system universally more team-friendly and one that gives the Nationals something akin to an option year with a player such as Jackson. Now, in order to set itself up for potential compensation from a free agent, a team has to offer a salary equal to the average of the 125 highest-paid players at their position from the previous season, a figure estimated at around $12 million.
Even if the Nationals were to average the 20 highest-paid starting pitchers from the 2012 season, they would arrive at a salary in the $15 million range. Averaging the 125 highest-paid would substantially lower that number. More likely, it would be a contract similar to the one Jackson agreed to for 2012 - even if he has a career-best season — and he can take it, giving them a top starter at an affordable rate, or leave it and allow the team to receive a draft pick.
In the past, arbitration offers were risky, especially for small-market teams that often shied away from them for fear that the player would accept. Draft-pick compensation wasn't enough to counteract the possibility that a player could stick them with a hefty, one-year price tag through the traditional arbitration process. The Philadelphia Phillies allowed Roy Oswalt to walk without an arbitration offer this winter, uninterested in giving him a raise on the $16 million salary he earned in 2011. They did the same with Brad Lidge, who made $12 million in 2011 and signed a one-year, $1 million contract with the Nationals this offseason. The Chicago Cubs proceeded similarly with first baseman Carlos Pena, who joined the Tampa Bay Rays after a 28 percent pay cut on his $10 million salary.
Teams were willing to let those veterans leave because going to arbitration would have guaranteed the players at least 80 percent of their salary from the previous year and almost always resulted in a raise. Case in point: In lieu of free agency this offseason, designated hitter David Ortiz and reliever Francisco Rodriguez accepted their teams' arbitration offers — and both will make a substantial amount in 2012. Ortiz settled with the Boston Red Sox on Monday for $14.575 million. Rodriguez, a one-time ace closer, is an $8 million set-up man in Milwaukee. On the open market, it would have been shocking to see either reach those salaries.
But the amount any player in arbitration could potentially earn was unlimited, as San Francisco ace Tim Lincecum showed with his record arbitration filing number of $21.5 million this offseason. Lincecum settled with the Giants for $40.5 million over the final two years of his contract, knowing the CBA changes would impact him in arbitration in 2013.
The Nationals are by no means a small-market team. They have the deep pockets of the Lerner family, and ownership has said stinginess won't hinder its quest to win. But this change puts the Nationals - as well as the Kansas City Royals and the Oakland Athletics and the Rays and every other team that can't outspend the Red Sox, Yankees or Phillies — on more equal footing when it comes to their own free agents. Now, losing a top player will help build the farm system. There's some reward that comes with the loss, guaranteed and fear-free.
All of this won't change some of the cut-and-dried facts about free agency, and it won't make Jackson's deal any longer or less expensive. It's a one-year deal, and it's worth more than double the salary of any other pitcher on the team. But it's a contract that allows any team the ability to keep top free agent talent in its organization without worrying about breaking the bank to do it — and that is a wrinkle that baseball hasn't had before.
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