The Washington Nationals Take a Massive, Market-Value Risk on Stephen Strasburg

Zachary D. Rymer@zachrymerMLB Lead WriterDecember 9, 2019

Washington Nationals starting pitcher Stephen Strasburg heads to the dugout after the third inning of Game 6 of the baseball World Series against the Houston Astros Tuesday, Oct. 29, 2019, in Houston. (AP Photo/Matt Slocum)
Matt Slocum/Associated Press

After beginning 2019 as a guy who would be a fool to opt out of his contract, Stephen Strasburg is now a World Series hero and the richest pitcher in baseball history.

As Jon Heyman of MLB Network was first to report, Strasburg agreed to a new contract with the Washington Nationals during the first day of the winter meetings on Monday. Per ESPN's Jeff Passan, the terms are positively massive:

Jeff Passan @JeffPassan

Stephen Strasburg’s deal with the Washington Nationals is for seven years and $245 million, a source tells ESPN.

Before Monday, the record payout to a pitcher was the seven-year, $217 million contract David Price signed with the Boston Red Sox in 2015. Strasburg's deal tops that by $28 million.

His $35 million average annual value is also a new record for a pitcher, topping the $34.4 million AAV of the six-year, $206.5 million contract Zack Greinke signed with the Arizona Diamondbacks in 2015.

And according to Jared Diamond of the Wall Street Journal, there's no funny business going on with the actual value of Strasburg's record-setting contract:

Jared Diamond @jareddiamond

Was told the deferrals in Stephen Strasburg record $245 million contract are with interest, meaning the net present value of the deal isn't impacted.

In short: Yes, Strasburg's decision to opt out of the final four years and $100 million remaining on his previous contract has paid off.

How Strasburg set himself up for this moment must not be ignored. Whereas he went into this past season as a generally good yet injury-prone and inconsistent starter, he came out of it as one of the best pitchers in baseball.

Somewhat quietly, the 31-year-old put up a 3.32 ERA and set career bests with 18 wins, 209 innings and 251 strikeouts in the regular season. Strasburg was then at the tip of the spear in the postseason as the Nationals defied the odds and won their first-ever World Series championship. He posted a 1.98 ERA over 36.1 innings, culminating in an MVP-winning performance in the Fall Classic.

HOUSTON, TEXAS - OCTOBER 30: Stephen Strasburg #37 of the Washington Nationals celebrates after defeating the Houston Astros 6-2 in Game Seven to win the 2019 World Series in Game Seven of the 2019 World Series at Minute Maid Park on October 30, 2019 in H
Mike Ehrmann/Getty Images

Clearly, the Nationals are hoping that there's plenty more where that came from. And perhaps there will be if Strasburg stays healthy and sticks with what worked for him in 2019.

On the latter front, he got around diminished fastball velocity by adjusting his pitch mix to include fewer four-seam fastballs and more sinkers and curveballs. That proved successful in keeping his strikeout habit alive, and Statcast's xwOBA metric further underscored his excellence relative to his peers:

  • 1. Gerrit Cole, HOU: .238
  • 2. Justin Verlander, HOU: .249
  • 3. Jacob deGrom, NYM: .253
  • 4. Max Scherzer, WAS: .254
  • 5. Stephen Strasburg, WAS: .266

The most positive spin on Strasburg's health, meanwhile, is that he hasn't dealt with any serious injuries since he had Tommy John surgery in 2010. The injuries he's suffered in recent seasons have more so been of the minor and nagging varieties.

Nevertheless, Strasburg's health issues can only be downplayed so much.

Even one Tommy John surgery is one too many, and 2019 was the first time in five years that he was able to top 30 starts and 200 innings. A guy with this kind of track record suddenly becoming a paragon of durability all the way through his age-37 season is...well, unlikely.

There's also the extreme likelihood that Strasburg's velocity loss will go from minor to severe in the coming years. His margin for error will get smaller as a result, perhaps to a point where no pitch mix alterations can save him.

So will Strasburg ultimately be worth $245 million? Never say never, but it's awfully hard to side definitively with "yes" with this particular question.

Then again, the Nationals may not care what Strasburg is worth in the long run if he helps them win another World Series or two in the short run. Because he's rejoining a starting rotation that's still co-anchored by Max Scherzer and Patrick Corbin, that could actually happen.

Further in their defense, the Nats seemingly didn't have much choice but to come around to a history-making payday for Strasburg.

Mike Ehrmann/Associated Press

At the start of the offseason, he was projected to earn $150 million by FanGraphs and $180 million by MLB Trade Rumors. But those same sites also pegged fellow right-hander Zack Wheeler for $68 million and $100 million, respectively, and he easily beat both marks by signing with the Philadelphia Phillies for $118 million over five years.

Wheeler missed two whole seasons after undergoing Tommy John in 2015, and he's been a merely league-average pitcher when he has been healthy.

That he nonetheless signed for $118 million says a lot about how desperate for pitching teams are in an era of disappearing starter innings and extreme home run proliferation. And as far as Strasburg's agent, Scott Boras, must have been concerned, Wheeler's better-than-expected payday was an obvious excuse to push the proverbial envelope.

One of Boras' other clients will soon be thanking him for pushing it as far as he did. Because if Strasburg is worth $245 million on this market, then Gerrit Cole is obviously worth a great deal more. 

As Passan wondered aloud, the 29-year-old righty's guaranteed money could begin with a three:

Jeff Passan @JeffPassan

Stephen Strasburg’s deal with the Nationals is absolutely massive. It sets a new record for average annual value at $35 million a year. While there are deferrals, per source, the $245 million number could have a profound effect on the Gerrit Cole market. Is it $300M or bust now?

Maybe Cole won't actually pull down $300 million, but it's only fair that he should dethrone Strasburg as the most expensive pitcher ever. He is two years younger than Strasburg, and he's fresh off winning 20 games with a 2.50 ERA and 326 strikeouts. He was also just as good (if not better) in October.

Because all of this is happening on the heels of a string of penny-pinching offseasons, it's certainly jarring that free-agent prices are suddenly soaring again. But despite all the obligatory hand-wringing, it does feel like a return to a natural order of things.

After all, what else is free agency for if not for teams to spend what they must to buy what they need?


Stats courtesy of Baseball Reference, FanGraphs and Baseball Savant.