It seems 2016 will be one of the more financially rewarding off-season’s in recent memory to be a top-tier starting pitcher. Although anytime is a great time to be a top-tier starting pitcher, this offseason, guys like Jordan Zimmermann, David Price, Jeff Samardzija, and a possibility opted-out Zack Greinke will all be on the market—logically vying to be the last player standing as they might get the most money.

However, it’s the Cincinnati Reds’ Johnny Cueto that might have turned some heads late last week.

On Thursday, Cueto jokingly discussed the prospect of reaching the $300 million figure with the Cincinnati Enquirer, saying that:

“If I have to ask for something, I’m going to ask for $300 million. If you’re asking, you can ask for any number.”

Obviously, the 29-year old Cueto was joking about seriously reaching that mark, as no team would seriously consider giving that much money to an almost-30 year old starting pitcher. However, while Cueto joked with the Reds’ media, he did raise a great question:

What might Johnny Cueto’s free agent contract look like?

Before we dive into Cueto’s comparisons, let’s first look at how the free agent market has expanded since the installation of the qualifying offer for the 2012-2013 offseason. In case you are not sure what a qualifying offer is or how it is determined, this is how it works:

Following the new Collective Bargaining Agreement in 2012, a new system for free agent draft pick compensation was set up that supplanted the old Type A/Type B system in which various players were assigned a Type A or B according to a ranking by the Elias Sports Bureau. The new system is run by what are is called a qualifying offer. A qualifying offer is worth the average salary of the top 125 players from the prior season, and must be rejected by the player in order for a team to receive draft pick compensation should that same player sign elsewhere. The qualifying offer has increased every season since its installation—from $13.3 million in the 2012-2013 offseason, to $14.1 million last offseason, to $15.3 million this offseason.

As a result, this increase could represent of how Major League Baseball is financially expanding among top salary, and could represent a market trend for said top talent as a whole. Since the value has gone up every season thus far, it stands to reason that top individual contracts might themselves be increasing at a rate close to or greater than the overall market itself. Essentially, this means that the yearly percent increase of a qualifying offer could stand to represent MLB’s contractual inflation rate among top players—and not necessarily just free agent ones either, as players typically get paid more toward the end of their contracts with back-loaded deals, and can also sign extensions. The offers have progressed each season as such:

Offseason Qualifying Offer (Millions) Yearly increase of QO (%)
2012-13 $13.3
2013-14 $14.1   6.02%
2014-15 $15.3 8.51%
2015-16*  $17.1* 12.04%*
*Projected Numbers

In order to project the qualifying offer for next offseason, I created a formula that works like this. Since the percent change increases from the 2013-14 offseason to the 2014-15 offseason, I simply found what that percent increase would be. Basically, I derived the percent increase of the percent increase. I then assumed a perfect world—which, in reality, was all I could really do based off of the information I found—and reapplied the number I found, 41.49%, back into the 2014-15 percent increase in order to find how much the qualifying offer would increase next offseason compared to this offseason. In English, I simply continued the underlying trend that the qualifying offer increases by in order to project what next off-seasons’ qualifying offer might be.

Now for Cueto’s comparisons.

The best way to begin to find out how much the Luis Tiant style hurler might be worth on the free agent market is to look at possible comparisons. While 2010-12 Justin Verlander and Felix Hernandez, or 2006-08 CC Sabathia might work, they all either signed contracts before the qualifying offer was introduced, or the same year it was first established—making it tougher to relate their contracts to modern-day. However, we will save Verlander for later.

However, there are two players that stick out that might be compared to Cueto. These two players received the largest contracts through free agency this offseason, new-Chicago Cub Jon Lester and new-Washington National Max Scherzer.

It’s even been discussed by Cueto’s agent, Bryce Dixon, in an interview with CBS Sports Jon Heyman that, when using Homer Bailey as a comparison, “Lester is a better comp…Scherzer’s the closest comp.” While this comment was made after Lester’s signing and preceding Scherzer’s, the main point still stands—Cueto will surely be aiming/looking to top Scherzer. For comparative measures, here’s how each pitcher has fared over the last three seasons:

Pitcher Age ERA  FIP  IP  bWAR fWAR
Lester 31 3.65 3.49 638.1 8.3 13.5
Scherzer 30 3.24 2.94 622.1 16.9 16.5
Cueto 29 2.54 3.35 521.1 13.8 9.3

 

One of the more obvious things to stick out is how absurdly better Cueto’s bWAR is compared to his fWAR. In order to avoid an argument about which WAR is better, let me explain why the numbers are so different. The reason is that bWAR—otherwise known as Baseball-References’ WAR—focuses on a pitchers ERA, as opposed to fWAR—otherwise known as FanGraphs’ WAR—which focuses on a pitchers FIP.

While ERA is a good indicator of how many runs were scored off of a single pitcher, it doesn’t take in to account how a pitcher truly cannot control the plays his fielders make behind him that do or don’t prevent a run from scoring. This is where FIP comes into play, as it only takes into account walks, strikeouts, home runs and hit by pitches—the four things a pitcher can control. Essentially, FIP rules out defensive interaction and luck and can show the true worth of a pitcher who might be on a really good or bad defensive team. Additionally, FIP is typically a better indicator of future success than ERA, as it usually stays more consistent and varies less year to year than ERA.

(FanGraphs does a really great job of explaining ERA here, FIP here, as well as their own WAR calculations here. Baseball Reference also explains their WAR and compares it to the others in a detailed breakdown here)

How does all this relate to Cueto?

It relates because his ERA consistently outperforms his FIP. Cueto is almost an anomaly in that he is a rare case who consistently has a lower ERA than his FIP by almost a full run—something that he has done in three of the last four seasons. While this could be attributed to having one of the better defenses in the game from 2012 to 2014 behind him—as the Reds have owned the 2nd best UZR in the National League and the 4th best in all of Major League Baseball over that span—it should not be overlooked that he also has played at Great American Ball Park, a launch-pad for home runs and one of the more hitter friendly parks in all of baseball.

Essentially, in predicting how Cueto is valued it is logical to use his bWAR as opposed to his fWAR because his consistently low-ERA is one of his strong suits and compares better to the top-dollar he will be demanding.

Another thing that stuck out for Cueto is that he has pitched more than 100 less innings over the last three seasons than Lester and Scherzer. This was as a result of an injury plagued 2013 in which Cueto missed 117 games on the Disabled List with a right shoulder strain. In order to compensate for this difference, I weighted Cueto, Scherzer, and Lester’s respective WAR’s to 200 innings—a good, round number that could represent the minimum amount of innings any club would like to get out of their ace who will get paid as much as he might. The formula I used was “(bWAR/IP)*200”.

Pitcher bWAR (per 200 IP) fWAR (per 200 IP)
Lester 2.6 4.2
Scherzer 5.4 5.3
Cueto 5.3 3.6

 

Basically, what I did was give all three a level playing field when it comes to WAR, as it shows how much each player is worth over the course of 200 innings. As a result, it’s not hard to see why Scherzer is a great comparison for Cueto, as they are within 0.1 bWAR per 200 innings of each other.

Now for the fun part, projecting Cueto’s salary.

This offseason, Lester and Scherzer were the two prized jewels of the free agent market eligible to be sold to the highest bidder. Lester ended up with a contract of 6 years/$155 million—an Average Annual Value of $25.83 million. Scherzer, on the other hand, came away with a 7 year/$210 million contract that, from the outside, has an AAV of $30 million. In reality, Scherzer is being paid $15 million for the next 14 years, as the Nationals deferred $105 million to the 7 years after the original life of the contract.

Earlier—and I know, it feels like a while ago—I established that the qualifying offer might increase by 12.04% this offseason. Now, since the qualifying offer is representative of the average salary of the top 125 paid players in the MLB, the increase from season to season might represent how top contracts for like players can increase from season to season. Essentially, the percent increase from season to season of the qualifying offer is also representative of how players—or their agents—attempt to earn more than each other and raise the price for top talent.

Following this assumption, I multiplied Lester and Scherzer’s AAV by the percent increase—meaning I increased their contracts by the same percent I projected the overall top player market to increase, 12.04%. Here’s how it turned out:

Pitcher Cueto’s AAV value (Millions) compared to: Cueto’s Total contract value over 7 years (Millions) compared to:
Lester $28.9 $203
Scherzer $33.6  $235
Mid-Point $31.3  $219

 

What this means is that using Lester’s contract as a floor and Scherzer’s contract as a ceiling, Cueto should earn an AAV somewhere between $28.9 million and $33.6 million. Should the deal be 7 years, Cueto will make between $203 and $235 million.

In reality, Cueto’s value likely lies somewhere around the midpoint of the two figures, somewhere around an AAV of $31.3 million and, again assuming the deal is 7 years, $219 million. And because Cueto’s value lies much closer to that of Scherzer, a 7 year deal worth $219-$235 million dollars and an AAV between $31.3 million and $33.6 million seems to be the most likely. A deal between these two AAV numbers would beat the AAV record $30.7 for a pitcher, set by Clayton Kershaw.

Should the deal be structured like Scherzer’s, it would follow that Cueto could get anywhere from $14.45 mil to $16.8 mil each year for the next 14 years. Of course that is disregarding the midpoint and, in general, an absolutely astounding amount of money.

For a point of reference of how this projection works, let’s take a look at how much Justin Verlander’s extension would’ve been worth this offseason and how much it would be worth next offseason. Verlander signed a 7 year/$180 million extension before the 2013 season—the same season that the qualifying offer would first be used. Should Verlander’s AAV follow the same percent increase the qualifying offer does, it would look like this:

Verlander 2012-13 2013-14 2014-15 2015-16
AAV (Millions) $25.7 $27.3 $29.6 $33.1
Total Millions (7 years) $180 $191 $207 $232

 

We find that Verlander, who owned a 5.7 bWAR per 200 IP and 5.7 fWAR per 200 IP from 2010-12, winds up just $3 million shy of Scherzer’s contract this offseason, as well as $3 million shy of Cueto’s projected ceiling next offseason.

Let’s add in one more point of reference, Zack Greinke. Greinke signed a 6 year/$147 million contract with the Dodgers before the 2014 season—the second year the qualifying offer had been in use. Following the model just like Verlander, here’s how Greinke’s AAV would look:

Greinke 2013-14 2014-15 2015-16
AAV (Millions) $24.5 $26.6 $29.8
Total Millions (7 Years) $172 $186 $209

 

Here, we see that Greinke—who owned a 2.6 bWAR per 200 IP and 4.8 fWAR per 200 IP his three years prior to free agency—is a very comparable comparison to Lester, Cueto’s projected floor. While Greinke’s AAV is $0.76 million above what Lester actually got, it’s still in the same ball-park and only $4.6 million away on a 6 year deal. Also, at 7 years Greinke’s deal is only $6 million above Cueto’s projected floor, which is relatively close when talking hundreds of millions.

There are a lot of things that have to go right for Cueto, however. All of these comparisons take into account the three years prior to the player signing his contract. That means Cueto has a great chance to improve on his standing, as he still has one full season to prove his worth. Should he have a good season, he might easily get to the money he is projected to get. Should he have a bad season, his value might surely lower. Another factor is that Cueto is competing against potentially three—possibly four—other elite pitchers next offseason, which could raise his value or diminish it depending on his 2015 season.

If Cueto were to repeat his Cy Young runner-up campaign from 2014 this upcoming season, it would surely not be a shock to see the then 30-year old receive a deal somewhere in the neighborhood of $219 million and $235 million over 7 years based on the recent market trends. And if his 2015 season is good enough, we might see Cueto’s perspective contract a whole lot closer to the latter of the two numbers.

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