Major League Baseball has no salary cap, and that’s not always a good thing.
The New York Yankees, who bought Babe Ruth, have won the World Series 27 times. The Los Angeles Dodgers had a $291 million payroll two years ago; the Miami Marlins’ was about one-fifth of that at $63 million.
Instead of a salary cap — a seismic concession that the world’s most powerful players union would never agree to — MLB imposes a Competitive Balance Tax (aka, a “luxury tax”) on its big spenders. And owners have tried to create the public posture that this is a scarlet dollar sign they don’t want to wear.
The Texas Rangers are not one of the six luxury-taxed teams, and co-owner Ray Davis has said that the goal is to keep it that way.
The math will be challenging, even with the luxury tax threshold going up to $206 million in 2019.
Both pitcher Yu Darvish and catcher Jonathan Lucroy will be free agents after this season, and both will command mega-contracts.
Darvish’s new contract likely will rival that of the other big-name free-agent pitcher — Jake Arrieta. Lucroy, meanwhile, could be the best of the available position players.
There should be no skepticism about either player wanting to remain with the Rangers. Lucroy’s wife is from neighboring Louisiana and he played in college at Louisiana-Lafayette. Darvish, once thought of as a slam-dunk to be a future Yankee, has found Texas to be a comfortable and supportive environment to play in the American majors.
But how much money, exactly, are we talking about here?
The richest contract ever signed by a major league pitcher is David Price’s seven-year, $217 million free agent deal with the Boston Red Sox. The Dodgers’ Clayton Kershaw is right behind at $215 million and seven years.
But Kershaw was 25 when he signed his deal and Price was 30. Darvish will turn 31 in August and underwent Tommy John elbow surgery in 2015.
In his eight full MLB seasons, Price has averaged 31 starts. Kershaw has averaged around 30 starts over his nine seasons.
Darvish, meanwhile, has been with the Rangers since 2012 and has made more than 30 starts only in 2013, when he finished second in the AL Cy Young voting.
Clubs have every reasonable right to worry about a player’s injury history. But it’s not always the best way to do business with a player and his agent, who expect to be paid for performance, not perfect attendance.
Darvish, therefore, is going to want a contract extension with an average annual value in the same range as Price, Kershaw, Max Scherzer and Zack Greinke — around $30 million per year.
But he shouldn’t expect seven years. That’s where his age and injury past have to come in.
For Darvish, five years and $150 million seems about right.
The question is whether the Rangers can take a $30 million payroll hit and still remain under the luxury tax threshold. (Yes, Prince Fielder’s annual $23.78 million remains on the books until 2020).
And if they pay Darvish, can the franchise also extend Lucroy?
The good news for the Rangers is that catchers don’t make as much as power-hitting first basemen or corner outfielders.
Lucroy isn’t Buster Posey, who signed a nine-year, $167 million deal at age 26. Posey was the National League’s MVP in 2012, has been in the top 20 of the MVP voting six times and has won three Silver Slugger awards.
Lucroy, who turns 31 in June, figures to slot, therefore, somewhere behind Posey ($18.56 million) in annual value, but can make a solid case for getting more than Brian McCann ($17 million) and Russell Martin ($16.4 million).
A four-year, $70 million extension offer would be fair. But here’s a little history reminder:
The management of the 2002 Texas Rangers also thought that their 31-year-old catcher was not worthy of a long-term free agent contract, so they let him become a free agent.
Ivan “Pudge” Rodriguez went to play in 1,064 more major league games, almost all for other teams, batted 4,208 times, had 1,121 hits and won a World Series. He will be inducted into the Baseball Hall of Fame in July.
Baseball actuaries are barely batting at the Mendoza line.
Can the Rangers afford their big two free agents? The better question is, can they afford to replace them, because that option is likely to be even more expensive?
It’s the cost of winning. That Babe Ruth thing seemed to work out.