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The Winners and Losers of Gerrit Cole’s Signing With the Yankees

The former Astros ace signed a nine-year, $324 million deal with New York on Tuesday night, giving him the highest average annual salary in baseball

Getty Images/Ringer illustration

On Tuesday, baseball superagent Scott Boras told reporters, “there’s a probability” that his client Gerrit Cole, the top pitcher available on the 2019-20 free-agent market, would sign during this week’s winter meetings. Cole’s market, he continued, was “room temperature heading toward a hot climate.” Only hours later, the probability of a signing had spiked to 100 percent, and the market was scalding: On Tuesday night, the Yankees inked Cole to a record contract that guarantees him $324 million over nine years, including a full no-trade clause and an opt-out after the fifth year. Fellow Boras Corporation client Stephen Strasburg, who re-signed with the Nationals on Monday, had only one day to savor being the sport’s top-paid pitcher before Cole’s contract surpassed Strasburg’s seven-year, $245 million deal.

Cole’s windfall is the largest ever for a pitcher and the second-largest ever signed by a free agent in terms of total dollars, trailing only Bryce Harper’s $330 million agreement from March. But Harper’s pact was for 13 years, and the only other two contracts to eclipse Cole’s total, Mike Trout’s $430 million extension and Giancarlo Stanton’s $325 million extension, were for 12 and 13 years, respectively. Cole’s yearly rate of $36 million tops Trout’s to give him the highest average annual salary in the sport. Let’s examine the ripple effects from the righty’s historic score and anoint a few winners and losers.

Winners

Cole

Well, obviously. Cole had an incredible contract year: He led all 2019 pitchers in FanGraphs WAR, finished second in AL Cy Young Award voting, threw a record 11 consecutive starts with at least 10 strikeouts, and posted the highest strikeout rate and strikeout minus walk rate ever recorded by a qualified starting pitcher. His 326 regular-season strikeouts—more than one for every million the Yankees just agreed to fork over—were the most by any pitcher since Randy Johnson in 2002. Cole also followed up his league-leading regular-season ERA (2.50) and FIP (2.64) and major-league-leading ERA+ (185) with a 1.72 ERA in 36 2/3 postseason innings. Unsurprisingly, he projects to be baseball’s best pitcher in 2020. He couldn’t have put himself in better position for a payday.

Even so, few went into the offseason expecting Cole to strike it quite this rich. In early November, MLB Trade Rumors predicted an eight-year, $256 million deal. Late last month, ESPN’s Jesse Rogers polled 15 “team executives and baseball insiders” on the offseason’s most pressing questions. When asked whether Cole’s contract would reach $300 million, nine said “close but under,” six said “no chance,” and zero said “definitely.” In the wake of the Zack Wheeler and Strasburg signings, though, it became clear that Cole was destined to be the first pitcher to break the $300 million mark. The 29-year-old is more than two years younger than Strasburg, with a better recent track record and a far less injury-plagued past (he hasn’t hit the IL since 2016).

Cole is a former first pick who finished fourth in NL Cy Young voting in his age-24 season, so he’s always been a promising pitcher, but the data-driven adjustments he embraced in Houston elevated him to an even more elite level after two seasons of heavy sinker use and stagnation in Pittsburgh. Technology-fueled improvements in player development have helped lower the average age of major leaguers and have concentrated more WAR in the roster spots of low-salaried players with scant service time. But they’ve also greatly enriched individual veterans who’ve revitalized their careers, and Cole is a testament to the newfound success smart teams are enjoying when they target and tinker with less progressive teams’ underperforming players. Cole can carry the changes he made in Houston with him to New York, and the sabermetrically sophisticated Yankees are equally capable of helping him implement future tune-ups as he presumably loses some of his stuff with age. For now, though, that stuff is unparalleled: Cole’s 97.4 mph average four-seamer speed ranked third among starters with at least 60 innings pitched this year, and his fastball and breaking ball spin rates are close to the top of the scale.

The Yankees

The Yankees have coveted Cole since they drafted him 28th in 2008; he stayed in school then and signed with the Pirates three years later. The Yankees also tried to trade for Cole after 2017, but the Astros won the sweepstakes and reaped the rewards. He’s much pricier now than he would have been before, but the Yankees can afford to pay a premium for a premium player, particularly in light of the pittances they’ll pay pre-arbitration players like Gleyber Torres, Miguel Andújar, Luke Voit, Mike Tauchman, and Domingo Germán, and first-time arb-eligible players like Aaron Judge, Gary Sánchez, Gio Urshela, Chad Green, and Jordan Montgomery.

It’s not as if the Yankees have been small spenders in recent seasons, but they sat out the Manny Machado/Harper pursuit and hadn’t splurged on a nine-figure free agent since before the 2014 season, when they landed Masahiro Tanaka and Jacoby Ellsbury. New York did trade for Stanton in December 2017, on the heels of his 59-homer MVP season, and they dealt for James Paxton last November, but they haven’t been outspending other teams by Steinbrennerian margins. As a result, they dipped below the competitive balance tax threshold, which means they’ll pay first-time tax rates (20 percent) in 2020, in addition to surrendering a chunk of their international spending budget and incurring a surtax on any spending above $228 million. Cole’s arrival raises their projected 2020 payroll to $239 million, the highest total of any team as of today.

Yankees ownership instructed Brian Cashman to land Cole in spite of the penalties, which once was, and should still be, business as usual for baseball’s most valuable franchise. The Yankees are wealthy enough to assume the risk of Cole flaming out at some point in the course of the nine-year contract, which will run as long as any pitcher contract signed since Wayne Garland’s 10-year deal at the dawn of free agency. They plucked him away from the team that eliminated them from the playoffs in two of the past three years, and they’re obviously envisioning him at the head of a deep October run that would yield the franchise’s first pennant since 2009. But this isn’t only an October-oriented move.

Although the Yankees won 103 games last season, they outperformed their BaseRuns record by nine games, more than any other team. They can count on better health next year, but regardless of the outcome of Boston’s Mookie Betts trade talks, they’ll have to fend off some stiff competition during the regular season. Three of the top five teams in projected 2020 WAR are in the AL East, and even with Cole, the Yankees don’t have a huge lead. But they’ll be bringing back a deep lineup and a shutdown bullpen, and they’ve added the ace of all aces to their rotation, which was their weakness last year (when they were mostly without Luis Severino). If the Yankees can keep churning out cost-controlled talent from their farm system and major league makeovers while also dipping into the top of the free-agent market, their streak of winning seasons—which, like their championship count, now stands at 27—could sustain itself indefinitely.

Other Free Agents, and Fans

Last Friday, I wrote that free-agent activity was off to its fastest start since the winter of 2016-17; after two painfully slow-moving offseasons, spending through the same point in December had roughly returned to its previously established level. There are reasons for concern about the long-term future of free agency as it’s currently constituted, but the signings of Strasburg and Cole provide further reason for short-term optimism. Although the sudden shift from free-agent restraint to more exuberant bidding is puzzling, teams are paying for free agents again. Perhaps we’re leaving a period when an inordinate number of teams were mired in long-term rebuilds or staying below the competitive balance tax threshold to reset their overage rates. Maybe teams are tired of putting efficiency before flags. This winter, at least some of the perennial powerhouses are flexing their financial might again, and less obvious spenders such as the White Sox, Reds, and Rangers are jumping back into the free-agent fray.

Last offseason, Machado signed on February 21, and the Harper saga dragged on until March 2, even though their relative youth should have made them appealing players. Perhaps their youth paradoxically led to longer deliberation, as teams fretted about committing to the two for a dozen years or more. This time, at least two of the top three free agents signed during the winter meetings, and the Wheeler and Yasmani Grandal contracts were completed before that. It also wouldn’t be a surprise to see the market’s sole remaining superstar, Anthony Rendon, sign sometime soon; on Tuesday, Boras, also Rendon’s agent, said every team is valuing his client at an “appropriate level,” which suggests that it might not be too difficult to get a deal done. The faster the first major dominoes fall, the greater the urgency among teams to fight over fallback plans (which means that “best of the rest” moundsmen Madison Bumgarner and Hyun-Jin Ryu now stand to benefit from the attention of teams that were courting Cole).

There’s a finite number of free agents in any given offseason, so a busier November and December means fewer moves made in January, February, and March. There’s always bound to be a lull at some point in the baseball calendar, and one could argue that extending the availability of the market’s top talents gives fans more reasons to read rumors all offseason long.

That suspense comes at a cost, though. As a player’s free agency drags on, stories are rehashed and rumors grow repetitive; every alert starts to sound like a previous report that didn’t pay off. The discourse surrounding the sport turns sour, as media members and fans focus on baseball being broken rather than drumming up excitement for the next season. When the winter meetings are active, they provide an oasis of activity in the offseason desert, and when stars sign early, team marketing departments can construct campaigns around them, plan promotions, and sell season tickets. And a busy early offseason spares us from thinking about things like free-agent spring training camps and the idea of high-profile players like Craig Kimbrel and Dallas Keuchel sitting out half the season. It also defuses some of the tension between MLB and the players’ union, which may foster more productive talks and reduce the risk of a work stoppage before the CBA expires on December 1, 2021 (only two years into Cole’s contract). This all also bodes well for future high-profile free agents who resisted signing extensions last spring; good luck locking up Mookie Betts now that he’s seen what wealth may await.

Boras

Less than eight months ago, The Athletic’s Ken Rosenthal scrutinized Boras’s recent tactics and found plenty of cause for criticism. “Numerous club officials say Boras often is his own worst enemy, setting unrealistic price points that compel teams to pursue other free agents,” Rosenthal wrote. Although some Boras clients did well after long waits last winter, Keuchel languished on the market until midseason, Mike Moustakas settled for another one-year deal, and Gio Gonzalez and Martín Maldonado left Boras for other agents after going unsigned or eventually accepting smaller offers than they had initially rejected. It seemed plausible that Boras wasn’t well-suited to the new realities of free agency.

Now that the old realities have returned, at least temporarily, Boras is back in command, and the surge in spending has restored his reputation. Granted, he held a great hand, representing a trifecta of highly desirable free agents who showcased their skills on the World Series stage. But he seemed to extract every possible cent for Strasburg and Cole, and he pulled off an upset by securing a four-year commitment for Moustakas. He’s well on his way to a $1 billion winter, with Rendon, Ryu, Keuchel, and Nick Castellanos also on his client list.

In the late 1990s, Boras represented Kevin Brown, baseball’s first $100 million man (and the last pitcher as old as Strasburg to land a seven-year deal). He represented Alex Rodriguez in 2001, when A-Rod signed the first $200 million deal. He represented Harper when he became the first free agent to surpass $300 million, and now he’s helped Cole become the first $300 million pitcher. He’s been setting salary highs for decades, as owners have come and gone and the sabermetric movement has revolutionized how front offices function. His analogies are incredibly convoluted, but the size of his commissions is clear.

Starting Pitchers

In mid-October, I wrote about the unexpected postseason resurgence of starting pitchers, who had increasingly ceded ground to relievers in the preceding few postseasons. The charts below, updated to account for the full playoffs, show that starters outpitched relievers on an inning-per-inning basis, pitched deeper into postseason games than they had in years, and accounted for nearly the same percentage of postseason innings as they had during the regular season. Cole and Strasburg were the starters most responsible for that throwback month on the mound.

GMs aren’t immune to paying extra for recent playoff heroes. Nor are they above being copycats. In 2015, Theo Epstein said, “The only thing I know for sure is that whatever team wins the World Series, their particular style of play will be completely en vogue and trumpeted from the rooftops by the media all offseason—and in front offices—as the way to win.” Both 2019 pennant winners acquired an expensive ace via trade or free agency, and their rivals lined up this winter to do the same.

Bullpens pitched poorly during the regular season, too, so starters’ regaining ground wasn’t only an October phenomenon. Of course, the charts above would look a lot different if a couple of games had gone the other way and the Rays and Brewers had advanced instead of the Astros and Nationals. The playoffs would have been much more bullpen-centric, and the memory of a World Series matchup of sterling starters wouldn’t be fresh on front offices’ minds. But baseball’s weighted random number generator produced a different narrative. Relievers got paid even during the down years for free agency, but even amid shrinking workloads and the advent of openers and bullpen games, skilled starters can still turn teams’ heads.

Losers

Cole’s California Suitors

The Angels and Dodgers were the Yankees’ stiffest competition for Cole, and the Giants (along with the Astros) were reportedly one of the two mystery teams that joined the pursuit for his services. Cole is a California native and a UCLA alum, and his West Coast admirers hoped his ties to the area (and a desire to preserve his facial hair) would keep him out of pinstripes. The Yankees’ money must have spoken persuasively.

For the Dodgers, this isn’t disastrous. They’re already really good, and while they’re down two starters (with Ryu and Rich Hill looking for future employers), they have decent rotation depth. They could bring back Ryu, may make a run at Rendon, and have reportedly turned their attention to Bumgarner. The lefty isn’t much more than a year older than Cole, but he’s on the decline and could cost them, because the Giants won’t want to lose him to their natural rival.

One way or another, L.A. will likely win the West again. One can’t say the same for the Angels, who won’t win without rotation help. But on the plus side, they won’t have to face Cole as often as they did when he was with Houston; last season, he held them to two runs in 19 innings over three starts, striking out 30 and walking five. But bypassing that buzz saw won’t shore up the shaky starting staff behind Shohei Ohtani and Dylan Bundy.

The Angels cleared payroll room on Monday, sending their 2019 first-rounder to San Francisco in exchange for the Giants’ absorbing Zack Cozart’s contract, so they’re still poised to spend. They weren’t one ace away, and they could sign a couple of solid starters—say, Keuchel and one of Bumgarner or Ryu—for the same amount it would have taken to ink Cole. They’re reportedly also in on Rendon. The Angels could still salvage this offseason, but the most appealing partners are pairing up, and their new recruiter has struck out so far.

Mike Trout

The superlative eight-plus-season start to Trout’s career has netted him only three postseason games. Cole’s decision to spurn Trout’s team is another blow to the 28-year-old future Hall of Famer’s hopes of returning to October while he’s still in his prime. Trout is clearly comfortable in Anaheim, and he took a large leap of faith in committing to the team through 2030. In the first act of their 12-year bond, he rewarded the Angels with another MVP campaign. But his teammates didn’t hold up their end of the bargain, and the Angels suffered their worst winning percentage since 1999.

In addition to depriving the Angels of another chance to support Trout, Cole’s contract hammers home how underpaid Trout still is relative to his talent. Yes, he’s in line to make hundreds of millions, so our sympathies are perhaps better directed elsewhere. (Trout, for one, doesn’t seem to mind.) But the fact that the Angels got a great deal on Trout (again) makes it more inexcusable that they haven’t built better teams around him.

Parity

In 2019, MLB’s competitive picture was about as unbalanced as it’s ever been. The standard deviation in team winning percentage was at its highest point in the expansion era, and the standard deviation in team WAR reached an all-time peak. That lack of competitive balance was the product of a league that featured several superteams and several terrible teams; eight clubs won or lost more than 100 games, which hadn’t happened before.

Cole is moving from one superteam to another, so this signing doesn’t necessarily exacerbate baseball’s parity problem. But if Cole had chosen, say, the Angels or Giants, his signing would have funneled several wins from one of last year’s titans to one of its also-rans, which would have helped address a noncontender’s deficiencies. This lopsided state of affairs may resolve itself eventually, as some of the superteams falter and some of the bottom-dwellers escape the cellar, but Cole’s destination doesn’t do anything to level the field.

Every Franchise That’s Currently Crying Poor

Although free-agent spending has been strong so far, several teams are still citing the CBT and insisting that they’ve maxed out their budgets.

Watching other teams shell out for free agents must make that messaging even more demoralizing for supporters of the clubs that are sitting on the sidelines. Not only did the Astros let Cole walk, but they’re also reportedly considering a Carlos Correa trade. The Cubs claim they can’t take on payroll and are dangling Kris Bryant. Boston may move Betts or David Price, and Cleveland could ship off Corey Kluber or Francisco Lindor. Sure, the Astros, Cubs, and Red Sox haven’t been penny-pinchers in the past, and Cleveland has perpetual attendance problems. But it’s no fun for some fans to be barred from the diving board when their favorite team’s competitors are splashing around in the deep end of the pool.