Reconsidering Greinke

The Brewers announced late last night that they and their ace pitcher, Zack Greinke, had broken off talks of extending Greinke past the 2012 season. In the final year of a four-year contract he signed with the Kansas City Royals back in 2009, Greinke would likely be the best right handed pitcher on the market next off-season, and while Brewers general manager Doug Melvin believes talks may resume at some point in the future recent events have made a free agent bidding war ever more likely.

There was, of course, the Matt Cain contract extension during Spring Training which set the bar for top of the rotation starters to come. Cain signed on for another five years at a total value of $112.5 million. While Greinke has been far less consistent than Cain since re-entering the big leagues in 2007, he is arguably the more talented pitcher, and nothing Cain has ever done measures up with Greinke’s 2009 season. The Joey Votto and Ian Kinsler and Brandon Phillips extensions of the past couple of weeks have further driven inflationary currents in the Major League players market. Greinke himself seems prepared for negotiations – perhaps with the Brewers, perhaps with other teams – as he brought on agent Casey Close earlier this year.

Whether the Brewers could afford to retain Greinke may ultimately be irrelevant. Anyone is more valuable in an open market than under the constraint of one buyer and with the way teams are throwing money around Greinke may very well want to test the free agent market. He was lights out down the stretch last season and into the Spring of 2012 and should he have another season resembling his 2009 campaign he could make upwards of the $112.5 million Cain did. He could pitch practically anywhere he wanted and name his price.

The same may very well be true for Phillies left hander Cole Hamels. Hamels is about the same age as Greinke, a similarly gifted and accomplished young pitcher who reached new heights in 2011, pitching to a career best 3.05 FIP. But what makes Greinke unique in this market, and what makes him more interesting even than Hamels, is that just about any team who would seek to acquire Greinke following the 2012 season had a chance to do so following the 2010 season. And yet 16 months ago, there was surprisingly little interest. The price tag was certainly high, but the Brewers eventually acquired Greinke without surrendering a blue-chip prospect (they traded their last of those to Toronto weeks before).

So with it looking more and more likely that Greinke will hit free agency, the question must be asked: why is it that the baseball media at large seems to have forgotten the hesitancy of teams to spend money and blue-chip prospects in search of a young ace two years ago? And what might have changed that would make a competitive team, for example the Yankees, take a substantial financial risk on a player like Greinke? While I think too little credence has been given to the potential for caution vis-a-vi Greinke’s past, I believe this selective amnesia is the direct result of three major factors which are worth outlining.

The ERA Factor – This is a big one. As much credit as we justly give to Major League talent evaluation, the process is still not completely ridden of irrational bias towards performance. ERA still matters whether it should or shouldn’t. Zack Greinke in 2010 pitched to a 4.17 ERA, two full runs above his 2009 performance. Never mind that Greinke had a track-record of ERA’s in the 3′s, or that Greinke was 26, or that Greinke had actually pitched much better than his ERA indicated. The fact that Greinke had gone from a 2.16 ERA, his first truly great season, to a 4.17 ERA was scary. Especially with the general tone of distrust used when discussing Greinke’s Social Anxiety Disorder and stint away from baseball.

The pragmatist would argue that Greinke has done little to dismiss concerns about his performance as opposed to his skill. His 2010 ERA+ of 100 was little worse than his 2011 ERA+ of 102. His raw ERA of 3.82 was in line with his career average, and still far from his best season of 2009. But it’s a lot easier to pay attention to strikeouts and walks, to pay attention to his Cy Young season and Cy Young stuff, when his ERA starts with a 3 than with a 4. If Greinke has another season like 2011, there will be some questions as to the wisdom of handing a guy with career ERA in the 3.8′s a contract worth upwards of $100 million. But the improvement from 2010 to 2011, however superficial, coupled with an almost assumed improvement over 2011 in 2012, has convinced the baseball viewing public that Greinke’s ERA is less an issue now than in 2010.

The Time Factor - This could easily be called the “social anxiety factor.” The further removed Zack Greinke is from his resurrection as a baseball player the more he will be trusted. It’s pretty simple. Zack Greinke was in a new place, in a more competitive place last season, and he was able to have yet another successful Major League season. There were no disruptions and when the team needed him the most, down the stretch fighting for a division title, Greinke was 9-3 with a 2.59 ERA. Yes, he struggled a bit in the playoffs, but who really remembers that?

In 2010, Greinke had pitched exactly three seasons as a starting pitcher since walking away from the game, all in the low intensity, losing environment of Kansas City. With two more successful seasons under his belt, he’s a different commodity. Now, one could argue that this added security is wiped out by the depreciation of two more years on his right arm. You’d certainly rather have a 26-year-old ace than a 28-year-old ace, all else being equal. The team that passed on Greinke in 2010 and signs him in 2012 will have lost those two productive years. But teams are risk averse and by building a track-record, Greinke has increased his value on the market over what it was in 2010.

The Cost Factor - This is not so much about Greinke becoming more valuable as the cost of acquiring him becoming different. In 2010, it would have cost you a blue-chip prospect and then some, or in the case of the Brewers four future big league players, to acquire the young righty. That’s a lot of talent to give up for one player, especially a player with question marks galore, with a short track-record, and coming off a season in which he pitched to a 4.17 ERA. You can kind of see how all this added up. The cost now is different. Should Greinke really become a free agent, there will be no need to surrender a prospect to acquire him. But on balance, will Greinke cost less?

The answer to this question is that probably yes, he will, but we need to do a lot of speculating to arrive at that answer. We must assume first that whatever team acquired Greinke in 2010, were it not a small-market Brewers team in talks with their star first baseman and short on long term cash, would have had a decent chance to extend Greinke or at least to re-sign him come 2012. What kind of discount would 2010 Greinke have over 2012 Greinke? The answer lies somewhere in the above text. But again, this is not so clear. Assuming the contracts signed in both periods would have been of similar length, say 5-7 years, Greinke would likely make 20-40 million more on the open market. That’s the diffirence between an anual contract of say, 18 million, and one of say, 22 million. Would you buy Alcides Escobar, Lorenzo Cain, Jake Odorizzi and Jeremy Jeffress for $20 million? Maybe. For $40? Less likely.

The other cost consideration is the alternatives available. Greinke was far and away the best option on the market in 2010. But in 2012? There will be Hamels, and several lesser pitchers. It’s all speculative. We just don’t know whether Greinke would have signed in 2010, what kind of discount that would have provided, and what the cost will look like in 2012. It’s safe to say, though, that from a talent perspective the cost will be far less and thus from a financial perspective the cost could be a lot more.

There’s a decent chance that Zack Greinke will be a free agent, and if he is, there is a decent chance he makes upwards of $100 million on the open market after a bidding war involving several competitive teams. The assumption that he will is based on, mainly, the three above factors. While Greinke is very similar to the pitcher he was in 2010, some of the risk associated with 2010 Greinke has lessened, at least superficially. The cost in talent is no longer signficant (basically equal to a roster spot). Be should be aware of the possibility that, if some of the above risk returns, Greinke may not be the commodity we think he should be. If he has another season with an ERA over 4.00 he’s not going to get $100 million. And God forbid the anxiety question is, for whatever reason, brought up to great magnitude. That tanked his value in 2010. It could do the same in 2012. Another Cy Young season? That could be priceless.