Bloated Contracts?: Blame the Wolf Who Cried $30 Million

Lewie PollisSenior Analyst IIIDecember 17, 2009

LOS ANGELES - JULY 16: Picther Randy Wolf #43 of the Los Angeles Dodgers looks on in the first inning against the Houston Astros on July 16, 2009 at Dodger Stadium in Los Angeles, California. (Photo by Stephen Dunn/Getty Images)
Stephen Dunn/Getty Images

Now that John Lackey is off the table, there are three basic categories under which the high-profile free agent pitchers lie.

The first group consists of pitchers like Randy Johnson, Pedro Martinez, and John Smolt—future Hall of Famers who are past their primes but still have some gas left in the tank.

The second cluster is made up of former aces hoping to rebound from injuries and prove that they didn’t peak too soon. These include Erik Bedard, Justin Duchscherer, and Ben Sheets.

The final, biggest set, is comprised of players who have accumulated solid, yet unremarkable career numbers and are coming off uncharacteristically good seasons—guys like Jason Marquis, Vicente Padilla, and Joel Piniero.

Each group has its appeals, and since at least half the teams in baseball went into the offseason looking to find rotation help, each is expected to draw significant interests. While some clubs have set about bolstering their pitching staffs with big-ticket acquisitions, most will be looking to this second-tier in search of bargain arms.

Unfortunately, thanks to the ridiculous contract the Brewers recently awarded Randy Wolf, bargains might be tough to find.

On the surface, giving Wolf more than $9 million a year makes sense after he went 11-7 with 160 strikeouts and a 3.23 ERA this season for a team that plans to contend next season. But a quick look at some of his past numbers makes the deal look somewhat questionable.

He has a career ERA of just 4.13, and he has never posted a K/BB ratio over 2.98. This season was quite possibly the best of Wolf’s 11-year career, and at 33, it’s safe to say that the three years he’ll spend in Milwaukee won’t be his prime.

For perspective on just how inflated the market is, Wolf is set to earn more money in 2010 than Cliff Lee and Zack Greinke.

Why does this matter? Because this deal established an expensive precedent for mediocrity.

Players like Duchscherer and Sheets had been considered low-risk options for small-market teams. But if Randy Wolf can get close to $30 million, surely these former aces will be able to command eight digits a season.

Derek Lowe is considered a failure after putting up a 4.67 ERA this season; the Braves are known to be regretting the $15 million-a-year contract they give him last winter. One would think that teams would show more restraint this offseason, but perhaps we humans really are slow learners.

Just how much of an impact will this have on the sizes of contracts to come? It remains to be seen. The $82.5 million Lackey got from the Red Sox was significantly less than what some analysts had expected (while the signing itself was excessive, the price was fairly reasonable).

But then again, Lackey was in a class by himself.

At any rate, small-market teams who had anticipated that the large supply of middle-of-the-road pitchers would drive down the price will have some trouble in the coming months.

What do you think? Is the equilibrium price truly higher than we had expected, or will the bubble soon burst?