Felix Hernandez Wins Cy Young: Effects on Seattle Mariners' Financial Future

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Felix Hernandez Wins Cy Young: Effects on Seattle Mariners' Financial Future
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Now that all arguments are over and Felix Hernandez has been named the American League Cy Young Award winner (All hail King Felix!), it’s time to look at what the award could mean for the Seattle Mariners in the long run.

After getting fired, Rick Adair likely lost the opportunity to become the most famous pitching coach this side of Dave Duncan.

Duncan is the St. Louis Cardinals pitching coach who has overseen Chris Carpenter’s Cy Young victory and Adam Wainwright’s 2010 runner-up in the award. Not to mention he watched Carpenter and Wainwright battle it out for second and third place respectively in 2009, likely handing the award to Tim Lincecum.

Duncan has also resurrected the careers of Joel Pineiro, Jake Westbrook, Jason Marquis and Kyle Lohse, among others.

While observed positive results pitching in Safeco Field would make philosophical sense as part of the criteria for future free agent signings, at least in terms of receiving preference or ideally a discount, it hasn’t come to fruition in San Diego, which has both a pitcher-friendly park and was the one-time home of 2007 Cy Young winner Jake Peavy.

The most important and most certain issue would seem to be the financial component of Hernandez’s future. While his price tag is controlled for the next four seasons, according to Cot’s, by winning the 2010 Cy Young Award Hernandez has increased the total value of his contract by $2.5 million—certainly not crippling, but far from insignificant.

But the more important financial concern is when the Mariners are faced with the possibility of losing Hernandez yet again. After the 2014 season Hernandez has the opportunity to become a free agent, so while the five-year contract Felix signed last offseason brought some relief to Mariners fans, it will likely prove to be short-lived. However, this time around the price will be much higher.

Apart from Felix Hernandez, there are only 10 active Cy Young Award winners (excluding Pedro Martinez, because his age and semi-active status make him irrelevant to this discussion). Of those guys, only three have reached free agency and signed a contract: CC Sabathia, Johan Santana and Barry Zito (Cliff Lee and Brandon Webb are both free agents but have yet to sign).

None of those players re-signed with their team, and Zito’s seven-year, $126 million contract comes in as the lowest by far.

Zack Greinke and Peavy both won the award amidst their first signed extension with their original teams. Peavy was traded to the White Sox, and Greinke figures to be the subject of trade rumors this offseason, as the Royals have publicly said they’d listen to offers for their ace.

Both of those teams have more significant budget constraints than the Mariners, but perhaps Peavy’s situation represents something of a best-case scenario for the Mariners.

Following Peavy’s 2007 Cy Young Award victory, the Padres signed Peavy to another extension. This one came two years before his original extension ended and essentially traded two years of injury uncertainty for three more years at a perceived discounted rate.

While Peavy’s performance in 2010, the first active salary year of the extension, was hardly worth the $15 million he was paid, it’s important to ignore results-based analysis when creating a model for Hernandez’s next contract.

During a period of relative economic strength, Peavy signed a contract in 2007 worth more than 300 percent of his 2007 salary in its first year (2010) and about 188 percent of the final year of his extension at the time. For Hernandez, those numbers come out to between about $22.75 million and $37.5 million for the first-year salary of a potential extension.

In the present economic climate, somewhere on the lower half of the middle seems more likely. The truth is that there are simply less free agent dollars out there, and fewer years in which to receive those dollars are available as well.

So while FanGraphs' WAR-based player values have shown Hernandez to be worth upwards of $55.5 million in past seasons, the present and future economic climate may prove that value to be irrelevant.

You see, present free agent dollars and WAR are still being calculated based on contracts signed before the recession, and if things keep up as they have, I’d imagine we could see a 20 percent decrease in the value of wins above replacement level.

With the Yankees and Red Sox presently boasting multiple eight-digit salaries in their rotations, signed through well into Hernandez’s next likely contract, the price tag of Hernandez may be driven down further.

Assuming Hernandez stays healthy and productive, the Mariners may have the opportunity to bring him in at a relative discount compared to his present extension and historical precedent, but either way, having the Cy Young Award likely means he’ll take up at least 20 percent of the team’s payroll.

However, if Felix is as good as many think he will be, and the market continues to adjust as many, including myself, think it will, this may be the least detrimental career accolade, in terms of team payroll, in the history of baseball.


Seattle Mariners top prospects

20-1615-11

To see 20 guys that didn’t make the cut, click here.

For "Fixing the 2011 Seattle Mariners" profiles, check out the following:

Ted LillyRamon HernandezMichael SaundersColby RasmusAdam DunnChone FigginsDustin AckleyFelipe LopezWilly Aybar, Jack/Josh WilsonYu Darvish

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