Indians Sign Justin Masterson: A Good Deal For a Great Pitcher

If Justin Masterson were a free agent today, what kind of a contract would he get?

Take a look at Masterson’s resume. He’s 26 years old and is coming off a season in which he went 12-10 with a 3.21 ERA, a 124 ERA+, and a groundball rate of 55 percent in 216 innings. He’s fixed his onetime Achilles heel—he still has an easier time against right-handed hitters than lefties, but he his FIP against southpaw batters in 2011 was just 3.65—and seems to have permanently made the leap from a good pitcher to a great one.

So how much would he get per year as a free agent? Mark Buehrle got four years and $58 million from the Marlins last month. Buehrle is six years older, and while he’s more durable than Masterson, in terms of ERA+ he hasn’t has a season as good as Masterson’s since 2007.

So if Buehrle can get $14.5 million for four years, you could easily pencil Masterson in for something like $17 million on a one-year deal, no? Maybe more like $15 million, just to be safe. I’d have an extremely difficult time imagining that Masterson would have to settle for a penny less than $12 million.

Keep that in mind when you think about the fact that the Indians avoided arbitration with Masterson, who was eligible for the first time, on Tuesday by signing him to a one-year deal worth just $3.825 million.

There’s a difference between arbitration and free agency, and there was no chance Masterson would get anything close to what he’s actually worth. The record for a first-year arbitration-eligible pitcher is the $4.35 million Dontrelle Willis earned in 2006, and that was after he’d gone 22-10 with a 2.63 ERA and finished second in the Cy Young vote. No disrespect to Masterson, but he’s no 2005-model Willis.

A good rule of thumb for first-year arb-eligible players is that they should make about 40 percent of what they’d get on the open market. Thus, the implication of the deal is that Indians and agent Randy Rowley agreed that Masterson would command about $9.6 million a year as a free agent.

Assuming the exchange rate in the current market for players is about $5 million per marginal win, this deal treats Masterson as a two-win pitcher, or essentially a league-average player.

I understand that Masterson’s numbers prior to 2011 weren’t great. He seemed to struggle in his first couple years as an MLB starter, particularly against opposite-handed hitters. What’s more, pitchers are highly susceptible to injuries and can be unpredictable even if they stay healthy. In other words, no, Masterson isn’t a sure thing to be great in 2012.

But would you bet on that? Masterson made some huge steps in the right direction last year. He’s improved his control, he’s still getting ground balls, and he actually gained some velocity on his fastball. Maybe he’s already peaked in terms of talent, though as he enters his age-27 season that’s not a foregone conclusion. But even if he doesn’t get any better—or if he gets a little bit worse—there’s no doubt his production will be worth well over $10 million.

Especially since Masterson’s value was over $9.6 million even before his breakout season. In 2009, when he spent half the season in the bullpen and pitched only 129.1 innings, he earned 2.1 fWAR. In 2010, when thanks to poor run support and bad luck he went 6-13 with a 4.70 ERA, he was worth 2.7 fWAR. A year ago, some writers thought he was a failure as a starting pitcher despite the fact that—according to FanGraphs’ valuations—he had averaged $10.2 million in production over the previous two seasons.

I’m certainly not complaining about getting Masterson for a bargain, just as I wouldn’t want to raise too big a stink about the other great deals the Indians signed this week. But if I were Masterson, I’d be a little miffed about being valued like a middle-of-the-rotation starter even though he’s a true staff ace.

Don’t forget to subscribe to our RSS feed, Like us on Facebook, and follow us on Twitter!