The Surreal Matt Garza Deal

By Nathan Petrashek

MLB: Chicago Cubs at Cincinnati RedsIt seems the Brewers could be paying Matt Garza a mere $1MM to pitch for them in 2018.

Okay, it’s a little more complicated than that.

According to various media outlets (e.g. Cots, Tom Haudricourt, Joel Sherman, and Adam McCalvey), Garza is set to earn a base salary of $12.5MM between 2014 and 2017.  $2MM of salary in each of those years is deferred without interest, payable beginning in 2018.  But 2018 is also the year in which things get kind of … odd.

Garza has a vesting option for 2018.  There is nothing particularly unusual about this contractual device.  It basically means that, under a defined set of circumstances, the Brewers are willing to guarantee Garza a fifth year at a predetermined salary.  That salary is $13.5MM, and it will be due Garza under the following circumstances:

  1. Garza starts 110 games between 2014-17
  2. He does not end the 2017 season on the disabled list
  3. He pitches at least 115 innings in 2017

If Garza meets all of those requirements, he’ll get a fifth year at a nice payday tacked on the end of his deal.

Satisfying those three requirements won’t be easy, though.  Garza essentially can’t miss more than a year’s worth of starts between 2014 and 2017.  Garza has had several maladies over the past few seasons-the most troubling being a stress reaction in his elbow-and his mechanics could lead to future shoulder problems for the 30-year-old.  Between the 2010-13 seasons, Garza only made 105 starts, so if we were to go by his last four years, the first requirement would not have been satisfied.

But that’s not all.  Not only must Garza remain healthy for at least three years, but he basically has to pitch for at least half of the 2017 season.  And even then, any missed starts (i.e. a DL stint) can’t come at the end of 2017.  Pretty brilliant contractual maneuvering by the Brewers to get out from under the option if Garza breaks down at the end of his deal.  Remember, most teams wanted to give Garza only  three guaranteed years.

But what’s really bizarre is what happens if the option doesn’t vest.  Then, according to the previously mentioned media sources, the vesting option becomes a $5MM team option.  In other words, even if Garza does break down, the Brewers can choose to bring him back anyway at a substantially reduced rate.  Even as things stand now, Garza wouldn’t have to do much to be worth $5MM, and who knows how much a win will be worth in 2018.

But if Garza misses a lot of time between 2014 and 2017, the Brewers get him in 2018 at an even bigger discount!  If Garza lands on the disabled list for 130 days in any 183-day span of time, the Brewers’ team option is reduced to a paltry $1MM.   The only scenario in which I could see the Brewers declining that option is if Garza’s arm is completely shredded and he just can’t pitch any more.  I don’t recall ever seeing a provision like this, in which a player essentially agrees to give the team a year of his time for next to nothing if he fails to take the mound due to injury.

The cheap rates on the potential team options have led some to speculate that these are actually buyout amounts for a $13.5MM team option that springs to life if the option doesn’t vest.  That’s now how they’ve been reported, though.  And if you think about it, it makes sense that the Brewers would hedge their bets against future injuries.  If the Brewers would wind up picking up the $1MM option, it would mean that Garza has spent nearly a full season or more on the DL at a $12.5MM salary; why shouldn’t they attempt to recoup some value on the back end of the deal?  Conversely, Garza has the ability to earn substantial additional salary if he remains generally healthy for the duration of the deal.

It’s always interesting to see the final result of extensive negotiation, and the Garza contract looks like the parties did a great job of balancing risk.

About these ads

One thought on “The Surreal Matt Garza Deal

  1. Pingback: Garza as the new Lackey « Cream City Cables

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s