Saturday, February 1, 2014

More on Matt Garza, creative contracts

It took a few days for the Brewers to officially announce their deal with pitcher Matt Garza, but with the news trickling out slowly, so have some interesting details about the contract.

It's basically a four-year, $50 million deal with some twists. In addition to some deferred money ($2 million per year) and a fifth year that vests if Garza is healthy and pitching. There's also a couple interesting team options for 2018.

If Garza doesn't pitch often enough to vest his fifth year at $13 million, the Brewers can bring him back for that fifth year at $5 million. Unless Garza misses 130 days during any roughly 13-month period during the first four years. Then they can bring him back for only $1 million.

Basically, if Garza has an arm injury -- a concern that kept some teams away -- and it costs him a year of this contract on the Brewers' dime, this contract says he'll give that year back at the end of the deal.

This kind of give-back isn't entirely unique. When the Red Sox signed John Lackey to a five-year, $82.5 million contract, it had a clause giving Boston the option to bring him back for one more year at the league minimum salary if Lackey were hurt.

Lackey did hurt his elbow, had Tommy John surgery and missed all of 2012. And unless he gets hurt again, he'll likely be pitching in Boston in 2015 in what might be baseball's best bargain contract.

For the Brewers and Garza, there's just as much flexibility. If Garza pitches as he has and stays relatively healthy, he'll get a fifth year and what seems like less than the going rate for a good pitcher on the free agent market. If he's banged up, but maybe still pitching well when he does take the mound, the Brewers can bring him back on a cheap make-good option that compares favorably to the one-year deals teams gave injury-risk-ridden starters like Ben Sheets and Dan Haren  in recent offseasons.

Of course, Garza could pitch like Jeff Suppan and be designated for assignment before getting a chance at seeing his fifth year vest. In which case, Milwaukee will get to re-live the worst memories of one of the worst free agent contracts the organization has given out. (Though maybe not worse than the Jeffrey Hammonds deal.)

This kind of add-on contract year seems like it was a good way to give everyone what they want. The Brewers hedged against the risk of signing Garza. Garza will be compensated for exceeding expectations the market had for him this winter.

Not a bad way to split the difference to get a deal done.

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