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Analyzing How High Red Sox's Jon Lester Extension Offer Should Climb

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Analyzing How High Red Sox's Jon Lester Extension Offer Should Climb
Steven Senne/Associated Press
Is this Lester's last year in Boston?


Unless the Boston Red Sox dazzle Jon Lester with a contract offer in the next few days, the best left-handed pitcher in Boston history could be in another uniform come 2015.

In order for Boston to lock up Lester in a Red Sox uniform for years, the club will have to do something that runs counter to its philosophy when it comes to contracts: be aggressive.

The season-long saga of Lester's impending free agency has been a cloud over the club. Moving forward, Boston needs to send a message to Lester, his teammates and the fans: The Red Sox will pony up when necessary in order to keep their stars.

The saga began in spring training when the Red Sox attempted to sign Lester to an extension, putting a four-year, $70 million deal on the table, as ESPN's Buster Olney recollects.

Details of the offer were leaked, and Boston was subject to harsh criticism around baseball for beginning talks with such a low, below-market offer. In Boston's defense, it took a similar tack to extension offers to Dustin Pedroia and Jacoby Ellsbury, viewing these low offers as "conversation starters," and expected that a final contract would be significantly higher, as CBS Sports' Jon Heyman reports.

Regardless, it was a curious way to begin contract extensions with a player who ranks second in the franchise in all-time victories by a left-handed pitcher with 109. Only Mel Parnell, who played from 1947-1956, has more at 123. Lester's 8.16 strikeouts per nine innings is the best ratio any left-handed Red Sox starter has had in history, and his 30.0 WAR is second-best by a left-hander in franchise history behind Lefty Grove (all leaderboard data courtesy of Baseball-Reference).

Considering Lester had said just before spring training that he would take a discount to remain with the team, according to Gordon Edes of ESPN Boston, the lowball offer looked like Boston was negotiating in bad faith and attempting to take advantage of his willingness to take a discount.

The image of Boston being a cheapskate has been hard to shake among the media and players. Teammates around Lester have been incredulous at the low offer, making it clear to executives and the media that Boston needs to do everything it can to bring back the star left-hander, as WEEI's Rob Bradford writes.

Michael Dwyer/Associated Press
Did Boston blow it with Lester?

But is it already too late?

Olney stated on ESPN Radio that he believes that the Red Sox "blew" their chance to sign the 30-year-old by starting talks off on the wrong foot with the four-year, $70 million contract offer. Now, Lester and his agents appear to be more inclined to wait for the winter in the midst of a disappointing Red Sox season and a Cy Young Award-caliber season for the left-hander.

Lester's nine victories are tied for most on the 2014 squad along with John Lackey, and his 2.73 ERA beats out any other Red Sox pitcher. He also has the most innings pitched (122) and the lowest WHIP (1.15) of any starting pitcher. His 2.75 FIP, via Baseball-Reference, shows that he is well deserving of all these rankings. Right now, Lester is in the conversation for the Cy Young Award.

Olney's sources believe that if Boston had attempted to sign the pitcher to a five-year deal for around $100-$110 million, a contract would have been signed. Those are extremely reasonable contract numbers given Lester's willingness at the time to accept a discount.

But according to Heyman, he isn't particularly interested in discussing new terms right now, even though Boston is gearing up for one last attempt to sign him, as Olney claims.

That doesn't mean that Lester doesn't want to return to Boston. Several media sources, including Heyman, say that both sides want a deal to get done:

If Boston's contract offer, which will likely come during the All-Star break (as that is when most offers of contract extensions are revisited in the season), is competitive enough and will lead to brisk negotiations, WEEI's Rob Bradford says that Lester would be open to finalizing terms during the season.

Bradford cites Cole Hamels' contract as a framework for the Red Sox to tender an offer. Hamels signed a six-year, $144 million deal with the Philadelphia Phillies in 2012 with a club option for a seventh year.

Given that the Red Sox need to make a competitive offer during the season to prevent any chance of Lester bolting in free agency (and you bet the New York Yankees are salivating at that opportunity), and he has indicated a willingness to take a discount to remain with the team, how high should Boston's extension offer climb?

Rich Schultz/Getty Images
Could Cole Hamels' contract extension serve as a framework for a Lester contract?

Since Hamels signed his deal, two other pitchers have signed extensions that have bumped the going rate for starters.

First, Seattle Mariners ace Felix Hernandez signed a five-year, $135.5 million deal that was tacked on top of his already existing contract through 2014, which comes out to $27.1 million per season on an annual basis. The Cincinnati Reds also signed Homer Bailey, who is a cut below Lester's talent but still hauled in $105 million over six years, which comes out to $17.5 million per year. 

If Lester still has interest in providing the Red Sox with a discountand that ship may have sailedthe discount will come in the form of one less guaranteed year than he would otherwise get in free agency. If the left-hander hits the free-agent market, there will be no shortage of six- or seven-year deals to choose from. Boston is averse to these types of long-term deals, and it is difficult to imagine the team extending itself beyond five years to sign Lester.

A five-year deal is not impossible given Lester's stated interest in giving Boston a hometown discount. However, the money is going to have to be significant in those five years for him to justify giving up the additional one or two years of guaranteed money.

It also stands to reason that Lester's price tag has done nothing but rise given his sterling start to the season and free agency just three months away. A five-year, $100-$110 million deal ($22 million annually) that Olney believes would have gotten done in spring training will no longer cut it.

If Boston offered Lester a five-year, $120 million pact (which comes out to $24 million annually), it's likely that such an offer would meet his criteria for "short negotiations." The Washington native may not agree to the deal, but it would represent an aggressive enough step forward for Lester to discuss re-upping with the team before the end of July.

What would likely occur following this offer is a counteroffer that would vault Lester's annual salary past $25 million, the value that Hamels makes.

Assuming the counteroffer would be a fairly negligible amount higher than Hamelssay, $25.5 million annuallythat would result in a $127.5 million deal over five years.

Lester may also seek a way to earn a sixth year on the contract in the form of a vesting option or a club option with a buyout that would give him additional insurance in exchange for giving up additional years of guaranteed money he would secure in free agency. Such an arrangement would likely result in around $3-$5 million being added to Lester's pockets via a buyout, lifting the total value north of $130 million of guaranteed money over five years.

Will Jon Lester re-sign with the Red Sox?

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It would be surprising at that point to see talks collapse. Boston would get its discount in the form of locking in less guaranteed years on Lester, which matches up with organizational philosophy.

Lester would receive a contract worthy of his pedigree with a salary that places him among the highest-paid players in the game.

The only question is this: Will Boston step up and do right by Lester, the team and the future of the Sox? Or is he inevitably going to end up playing for the Yankees in 2015?

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