The San Diego Padres’ agreement with veteran starting pitcher Michael Wacha breaks away from many MLB contract norms and could revolutionize certain future deals in the league.
This offseason has been the most expensive in MLB history. Teams around the sport spent over $2 billion on guaranteed contracts dealt out to Aaron Judge, Justin Verlander, Jacob DeGrom, Xander Bogaerts and many other star players. Yet, that doesn’t mean teams and players can’t find mutually beneficial deals beyond record-breaking sums.
On Wednesday, the Padres added a reliable arm to the back end of their starting rotation when they signed Wacha to a multi-year deal. On Thursday, the terms of that deal were revealed and they were different from most contracts baseball fans are used to.
Wacha deal with Padres:— Ken Rosenthal (@Ken_Rosenthal) February 16, 2023
Four years, $26M
Signing bonus $3.5M
Club options, must be picked up simultaneously
If club options declined
2024 player option $6.5M
2025 player option $6M
2026 player option $6M
All exercised one at a time.
The Athletic’s MLB insider Ken Rosenthal reported that the deal is for four seasons at $26 million, and includes a $3.5 million signing bonus. His base salary will be only $4 million in 2023, however, each of the next two seasons have both club and player options. The structure provides the Padres with some financial flexibility while providing Wacha with some stability.
Following the deal becoming official, ESPN MLB insider Jeff Passan explained why the unique deal between the Padres and Wacha has non-guaranteed risks but benefits for both sides as well.
“The Padres get the benefit of another lower-[average annual value] deal. Wacha gets protection: If he’s really good, he’ll make $16M a year for two years. If he’s not, he’s guaranteed $18.5M more. And if it’s in between, both sides can turn down the options and Wacha will hit free agency after ’23.”– Jeff Passan
Obviously, the top-line stars will pass on such a deal, but future free agents below the top tiers could sign similar deals with all sorts of variations that protect both sides. For clubs, such deals offer some financial flexibility. Players can benefit from a combination of flexibility and stability.
Essentially, it would incentivize players to perform at their best every season and guarantee increased pay after good seasons, but also have a safety net in the player option that becomes a team and fan-friendly deal after a down year.
For contending teams that are not among the biggest spenders, it would allow them to add worthwhile pieces and make a strong push for a title in the short-term and reward players who perform well. Just like the Padres are doing with Wacha.