How Jason Vargas' 4-Year, $32 Million Deal Will Impact the Pitching Market

On Thursday afternoon, the Kansas City Royals announced "major" news to the baseball world.

Well, at least they thought it was big enough to use the word "major" to describe their most recent free-agent signing. According to Bob Dutton of The Kansas City Star, left-handed pitcher Jason Vargas is headed to Kansas City on a four-year, $32 million contract.

While the move is far from major in the grand scheme of the American League Central race in 2014, it will have a significant impact on the pitching market. Specifically, it could alter the length of contracts for mid-level arms over the next few months.

If a mediocre pitcher like Vargas is good enough to garner a four-year deal, younger, more durable or prolific arms may be on the path to five-year deals from free-agent bidders.

As Dutton pointed out in The Kansas City Star piece, the Royals pounced on Vargas when their top target, Tim Hudson, signed with the San Francisco Giants. 

"The Royals focused in on Vargas after losing out on Hudson, who signed a two-year deal Monday with the Giants for $23 million. Hudson, 38, indicated all along that he preferred to remain in the National League after nine seasons in Atlanta."

Per Dutton's piece, Royals general manager Dayton Moore admitted that signing Hudson was the first choice of the organization in their quest for innings and depth behind James Shields' durable arm.

“We wanted to sign Tim Hudson,” Moore admitted during the press conference. “We were in it until the end.”

To be clear, Vargas isn't a bad pitcher. On the open market, an $8 million salary for a left-handed arm that can profile as an average, back-end of the rotation arm is market value. The four years, however, make the contract very strange and set up better pitchers to garner long-term deals for even bigger money.

The following chart takes a look at Vargas and three other free-agent starters: Bronson Arroyo, Ricky Nolasco and Phil Hughes. 

Pitcher	IP	K/9	BB/9	xFIP
Jason Vargas	852.2	5.82	2.51	4.47
Ricky Nolasco	939	7.48	2.05	3.59
Bronson Arroyo	1039	5.28	2.06	4.33
Phil Hughes	674	7.68	2.68	4.25

As you can tell by the numbers, Vargas would be the fourth choice among most baseball executives and scouts. Over the last five seasons, his numbers, outside of durability, lag behind all three of his free-agent contemporaries.

Despite pitching in two of the friendliest pitching parks in baseball, Safeco Field in Seattle and Angel Stadium of Anaheim in Los Angeles, Vargas has posted an ERA of 4.07 since the 2009 season. When adjusting for park and league effects, Vargas' adjusted ERA (ERA+) of 95 profiles as below average, per Baseball-Reference. 

Clearly, the Jason Vargas market wasn't going to change the ultimate earning power for power arms like Ubaldo Jimenez, Matt Garza or Masahiro Tanaka, but this signing should strike a chord with agents around the game.

If a pitcher like Vargas can garner a four-year contract from a contending team, what can the agents for Nolasco, Arroyo and Hughes find for their clients? 

All three of the pitchers compared to Vargas are different, but they could represent better return on investments over the length of a long-term contract. 

Nolasco, 30, is the same age as Vargas, but pitched to a strikeout rate (7.5) nearly two K/9 higher than Vargas (5.8) over the last five seasons. His SO/BB ratio, one of the basic tenants of successful pitching, also dwarfed Vargas' over the same period, 3.62 to 2.34.

According to Jeff Passan of Yahoo! Sports, Nolasco has multiple four-year offers on the table. After the Vargas deal, those offers could become five-year pacts.

Arroyo, 36, is six years older than the new Royals lefty, but has been a much more prolific innings-eater over the last five seasons. During that span, Arroyo's 1,039 innings pitched ranks 10th in all of baseball. Meanwhile, Vargas' mark of 852.2 is good, not great.

If a pitcher like Vargas can get four years based on durability, Arroyo, even at an advanced age, should be able to match that while garnering more money per season.

Hughes, 27, is younger than Vargas. He's moving away from a hitter's park in Yankee Stadium and owns the highest strikeout rate of the mid-tier arms listed. If not for a bad contract-year, the former 18-game winner would be in a class ahead of Vargas.

Yet, as of now, little has surfaced about where the right-handed pitcher might land. Due to his age, lack of major arm issues and profile as a power pitcher, Hughes may now earn his own four-year deal.

When Vargas signed on the dotted line in Kansas City, he didn't just make himself $32 million. Along with agreeing to a lucrative contract with a contending team, Vargas made three other pitchers very rich men. 

Comment below, follow me on Twitter or "like" my Facebook page to talk all things baseball.