Sunday, December 6, 2009

Hypothetically Speaking: The Felix Hernandez Contract Extension

UPDATE (12/6): I'm re-posting this piece from November because it looks like the Mariners and Felix have started up talks for a contract extension. What do you think? How much should Felix command?

After Felix Hernandez finished second in the CY Young voting to Zack Greinke, Larry Stone writes about what the future holds for King Felix in Seattle:

"At some point between now and opening day 2010 — precisely when this will happen is a state secret, guarded zealously by both sides — general manager Jack Zduriencik and Hernandez's agent, Alan Nero, will engage in serious talks about a contract extension.

To review: Hernandez is eligible for free agency after the 2011 season, giving him two more seasons under Mariners control. Best case.

In absence of an extension, Hernandez's salary during those two seasons will either be negotiated by the two parties, or determined via the arbitration process.

Either way, Hernandez, who made $3.8 million in 2009, is now poised to catapult into the financial stratosphere. Nothing like he stands to get on the open market, mind you (which, absent an injury, will be riches unknown to any player not named Alex Rodriguez), but likely in or near the eight-figure neighborhood."

Obviously, the Felix Hernandez contract talks are going to dominate the Seattle sports scene over the next two years unless something gets done. This contract extension has the potential to break records because of Felix's age and ability.

Let's take a look at the goals of each side:

The Mariners

1. Keep Hernandez in Seattle long term

2. Prevent Hernandez from hitting the open market after 2011

The Felix Hernandez Camp

1. Guaranteed money (lots)

2. More money in 2010

3. Become one of the highest paid pitchers in baseball

So how about this deal for Hernandez and the Mariners?

(7 years/$130 million)
with a $25 million dollar player option for 2017 and a early termination player option after 2014.

Here is the contractual breakdown:

2010: $11 million
2011: $14 million
2012: $18 million
2013: $20 million
2014: $21 million (opt out clause)
2015: $22 million
2016: $24 million
2017: $25 million (player option)

Why it works for the Mariners:

1. Buyout Hernandez's two remaining arbitration years

2.Keep Hernandez is Seattle

3. Prevent him from hitting the open market

Why it works for Hernandez:

1. Long term security

2. Third biggest contract given out to a pitcher ever

3. If Hernandez is not happy in Seattle, he can leave after 2014

4. Makes $25 million during what should have been his final two arbitration seasons

The advantage of this deal for Hernandez is that it gives him plenty of options: if he is happy he can stay in Seattle and remain one of the highest paid players in baseball. If Hernandez is unhappy, then he can always bolt after 2014 and set all kinds of records for a free agent pitcher.

From the Mariners' perspective, this deal only guarantees them another 4 years of King Felix, but at this point, I think that's a risk that they are willing to take. There would be ample pressure on the Mariners to put a competitive product on the field in the next four years to show Felix that this team is devoted to winning. If the Mariners fail to win from now until 2014, that could be a good reason for Felix Hernandez to opt out.

This contract shows how much they value Hernandez, what he means to the organization, and if King Felix likes Seattle and the Mariners organization, then this will be difficult to top on the open market.

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