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Stephen Strasburg’s Record-Setting Deal Is Surprising, but It Could Make a Lot of Sense

The 31-year-old World Series MVP is the latest beneficiary of the robust MLB free-agency market, but there’s reason to think he could be worth the $245 million he’ll make over the next seven years

Getty Images/Ringer illustration

Ever since Gerrit Cole donned a Boras Corporation cap to talk to reporters in the moments after World Series Game 7, baseball’s hot stove discussion has centered on how big the gap would be between the free-agent righty’s next contract and the previous record pact for a pitcher, David Price’s seven-year, $217 million deal from December 2015. One of these weeks, Cole will blow by that number, but he won’t be breaking Price’s record. Instead, he’ll be breaking the record set on Monday, when fellow free-agent righty and Boras Corp. client Stephen Strasburg agreed to return to the Washington Nationals for a guaranteed total of $245 million over seven years.

Strasburg’s reign as the game’s highest-paid pitcher will last only as long as Cole stays unsigned, but on the first full day of baseball’s winter meetings in Strasburg’s hometown of San Diego, the 31-year-old surpassed Price’s total haul, Zack Greinke’s record $34.4 million average annual value, and pre-offseason expectations of his earning potential. It’s the latest sign of a resurgent free-agent market after consecutive slow offseasons, a flex for the World Series–winning Nationals, a long-term commitment that could keep Strasburg with the team that drafted him for the rest of his career, and a move with major implications for the free-agent market’s top two talents, Cole and yet another Boras Corp. client, Strasburg’s fellow lifetime National Anthony Rendon.

It’s not so surprising that Strasburg chose to return to D.C. He’s clearly comfortable on the Nationals, who selected him first overall in the 2009 amateur draft, promoted him to the majors the following season, and put his health before the team’s short-term interests when it shut him down before the 2012 postseason. Strasburg signed a seven-year, $175 million extension with the Nationals in May 2016 that would have kept him on the team through 2023, but he exercised his right to opt out of the remainder of that deal early last month. Yet he’d already taken the plunge on one long-term deal with Washington, so it probably wasn’t too tough to envision doing so again.

There were at least four other factors in favor of a reunion: For one, Scott Boras has enjoyed a long and fruitful relationship with Nationals ownership. For another, the Nationals haven’t surpassed the competitive balance tax threshold since 2017, so even if their payroll climbs above that next season, they’ll be in line for the lowest tax rate. They also just won the World Series, which means they’re riding high on extra playoff revenue and in line for upticks in attendance and ratings next year.

Finally, World Series–winning teams have a history of bringing back an especially high percentage of their players compared to World Series–losing teams, likely because the good cheer that follows a championship makes it harder to break up the band. That probably goes double for a postseason stud such as Strasburg, whose epic October performance—a 1.98 ERA in 36 1/3 playoff innings this year, including a World Series MVP award, and a 1.46 ERA in 55 1/3 playoff innings lifetime—was instrumental to the Nats’ historically resilient championship run. The Nats had reportedly already re-signed Yan Gomes to a two-year deal and another postseason standout, Howie Kendrick, to a one-year, $6.25 million deal, much like the one 2018 World Series MVP Steve Pearce signed to return to the Red Sox after his heroics.

What is somewhat surprising is the length and largesse of the deal, although Strasburg was clearly in line for much more than the $100 million over four years that his pre-opt-out extension would have paid him. His timing couldn’t have been better: Strasburg led the NL with 209 innings pitched during the regular season, and his postseason work put him more than 25 innings over his previous single-season high. That demonstration of durability was particularly important for a formerly fragile pitcher such as Strasburg, who has made nine career trips to the injured list, including two lengthy stints in 2018, when he threw only 130 innings. Despite that heavier workload, Strasburg was about as effective on an inning-per-inning basis in 2019 as he had been in any season except 2017, when he finished third in NL Cy Young voting and slightly exceeded his 2019 WAR total (about six wins at both Baseball-Reference and FanGraphs, although Baseball Prospectus’s WARP pegged him as baseball’s most valuable pitcher). Strasburg, who finished fifth in NL Cy Young voting in 2019, recorded the second-best park-adjusted ERA and FIP, second-highest ground ball rate, and third-highest strikeout-minus-walk rate of his career.

Even so, estimates of Strasburg’s windfall were conservative compared to the contract he signed: MLB Trade Rumors guessed he’d sign for $180 million over six years, while FanGraphs’ Kiley McDaniel foresaw a five-year, $150 million deal and FanGraphs readers—who have tended to overestimate free agents’ earnings for the past few years, even among the elite—produced a median estimate of five years and $140 million. Not only did Strasburg exceed those projections in years, total dollars, and AAV, but he also received a full no-trade clause, albeit without any opt-outs. Roughly $80 million of Strasburg’s payment is deferred, but the Nationals will reportedly pay interest on the deferrals and complete the payments within three years of the end of the deal, so that payment plan doesn’t decrease the contract’s net present value. The Nats had already extended a qualifying offer to Strasburg, and they didn’t have to surrender a draft pick to sign him, as another suitor would have.

Granted, the market has been busier and more lucrative than anticipated, which accounts for some of the size of Strasburg’s score—after all, the less accomplished Zack Wheeler just landed a $118 million deal—but these are still eyebrow-raising numbers. Pitchers with performance comparable to Strasburg’s have tended to age fairly gracefully, and the Nats may have been emboldened by their successful signing of Boras client Max Scherzer, who has only improved over his first five years in D.C. (although he was slightly younger when he signed than Strasburg is now). But according to the Cot’s Contracts database at Baseball Prospectus, no pitcher as old as Strasburg has signed a contract this long since a then-33-year-old Kevin Brown inked a seven-year, $105 million deal with the Dodgers in December 1998. Although Brown, who was coming off a dominant three-year stretch in which he hurled almost 800 innings, didn’t finish the deal with the Dodgers and suffered a few injury-shortened or ineffective years during the course of the contract, he was well worth the investment, accruing 27.5 FanGraphs WAR in his age-34-through-40 seasons, which made him the 10th-most-valuable pitcher in baseball over that span. (Side note: Brown was a heck of a pitcher, and he didn’t deserve to fall off the BBWAA ballot after his first year of eligibility.)

That’s an encouraging precedent for Strasburg and the Nationals, but the sample size of one signing of this nature goes to show how wary teams typically are of making commitments this long to pitchers this age. Last week, Nats GM Mike Rizzo told reporters, “I’ve been drunk for a month,” and Boras may have taken advantage of the team’s celebratory mood. As it happens, Brown’s WAR total of 27.5 over the life of his seven-year deal is precisely the same as the seven-year total that ZiPS projects for Strasburg, but as is always the case with long-term contracts for veterans, there’s considerable downside risk here. As recently as a year ago, it seemed unlikely that Strasburg would opt out of his contract after 2019. By the end of the season, opting out was an easy call, but Strasburg’s outlook could shift in the other direction just as quickly. The righty’s age and injury history make it easy to contemplate a future in which the Nationals could come to regret the long-term entanglement, although there’s also some potential for Strasburg to finish strong and complete a Cooperstown-caliber résumé in a Nationals uniform.

Strasburg never completely recovered the fastball he flashed briefly before his September 2010 Tommy John surgery, and he’s lost another two ticks in his 30s.

Thus far, he’s compensated for his diminished velocity by throwing fewer four-seamers and dramatically ramping up his sinker and curveball usage.

That formula has paid off: Strasburg’s changeup remains an effective pitch, and it pairs well with his curve, which was among the 10 best in baseball this year among pitchers with at least 100 innings pitched. If Strasburg could learn to tunnel the curve and the sinker, that combo could become even more devastating, although elevating the sinker could come at a cost to the changeup. It’s a good sign that Strasburg has adjusted to his slowing stuff without a drop-off in performance, but that balancing act gets harder as fastball speed continues to tail off.

For now, though, Strasburg is one of the best pitchers in baseball, and by bringing him back, the Nats have gone a long way toward ensuring continued competitiveness in the tightly contested NL East, where their primary opponents have already been busy. The Phillies signed Wheeler; the Braves signed Will Smith, Cole Hamels, and Travis d’Arnaud and re-signed Chris Martin and Darren O’Day; and the Mets traded for Jake Marisnick. Even with Strasburg, the Nats will have their hands full keeping up with that pack; as of now, they’re behind the Mets and neck and neck with Atlanta in projected team WAR.

That task would be more manageable if the Nats could also re-sign Rendon. Last week, Nationals principal owner Mark Lerner said, “We really can only afford to have one of those two guys.” Of course, downplaying the odds of bringing back both could be a basic negotiating tactic. Considering the size of Strasburg’s deal, inking Rendon, who entered the offseason projected to earn even more than the pitcher, would vault the Nats into the upper tier of team payrolls, but that would be nothing new for the Nats, who spent about $200 million on payroll in each of the past two seasons. Strasburg and Rendon combined to make roughly $54 million in 2019, so re-signing the duo at higher rates wouldn’t represent that much more of a spending strain. And as Boras noted in his typically colorful rejoinder to Lerner, the Nats, who ranked only 16th in 2019 attendance, are likely in line for a big boost in revenue. They’re also expecting a big check from the Orioles, who were recently ordered to pay them more than $99 million for shortchanging them on MASN TV rights fees from 2012 to 2016.

In a poll of 15 “team executives and baseball insiders” published by ESPN late last month, 12 said that Rendon was more likely than Strasburg to return to the Nats. The 29-year-old Rendon may be a better bet to be good over a several-season span, but one could argue that it was more important for the team to re-sign Strasburg, because the Nats’ top prospect (and top-20 prospect overall), Carter Kieboom, is capable of playing third. But even after signing Strasburg, the Nats’ estimated tab for 2020 is only $166 million, so there’s no obvious reason why they couldn’t still afford Rendon and even be below the $208 million CBT threshold, pending additional moves.

The main secondary effect of the Strasburg signing could be felt in the price tag for Cole: Not only did Boras secure a sizeable payday from the Strasburg contract, but he probably increased the commission he has coming from his other high-profile free-agent pitcher client. Before the Strasburg signing, buzz was building about the potential for Cole, who’s coveted by the Yankees, Dodgers, and Angels, to sign a $280 million deal. But Cole, who may also sign soon, is both better and more durable than Strasburg—he hasn’t been on the IL since 2016—so even if he settles for eight years, he could argue for at least the same AAV as the older righty, which would raise the floor to $280 million. Cole is more than two years younger than Strasburg, so if Strasburg got seven years, Cole can dream of nine, which could push his payday well beyond $300 million. Buckle up: The winter of Boras has just begun.

Thanks to Lucas Apostoleris of Baseball Prospectus for research assistance.