Verlander, Posey get $347 million in new deals
NEW YORK — After leading their teams to last year’s World Series, Justin Verlander and Buster Posey cashed in just hours apart Friday.
The All-Star pitcher and MVP catcher were guaranteed nearly $350 million in contracts by the Tigers and Giants, a sure sign of the baseball times: Teams are awash with revenue from television and high-priced tickets.
Verlander, an AL MVP and Cy Young Award winner for Detroit, agreed to a $180 million, seven-year deal with the Tigers that is the richest for a pitcher and prevents him from becoming a free agent after the 2014 season.
Posey, the batting champion who led San Francisco to a pair of World Series titles in the last three years, received a $167 million, nine-year deal from the Giants. The catcher could not have gone on the market until after the 2016 season.
“Contracts like that that you’re seeing are a product of really strong revenue growth in the industry,” said Rob Manfred, Major League Baseball’s executive vice president of economics and league affairs.
And the spending might not be done yet.
Clayton Kershaw, who can go free after the 2014 season, could get a new deal from the Los Angeles Dodgers. The 2011 NL Cy Young winner said he won’t talk about contracts during the season; the Dodgers would want to hold off announcing any agreement until after opening day so that it would not add to their 2013 luxury tax bill.
Where is all the money coming from?
Baseball Commissioner Bud Selig expects revenue to top $8 billion for the first time this year.
“It’s quite a story when you think back in 1992 it was $1.2 billion,” he said this week. “We’ve come a long way. It’s a manifestation of how popular this sport is in every way.”
MLB last year agreed to eight-year contracts with News Corp’s Fox and with Turner Sports that run from 2014-21 and increase average annual revenue from about $500 million to roughly $800 million. ESPN and MLB reached a deal covering 2014-21 that hikes the average yearly payment from about $360 million to approximately $700 million.
And then there are big-money local deals. The Dodgers are creating a cable network with Time Warner Cable that assures the team more than $7 billion over 25 years. News Corp. is paying the Yankees’ owners $500 million as part of a deal that could allow it up to 80 percent ownership of the YES Network.
Teams are rushing to lock up prized players. For the Giants, the homegrown talent is especially valuable.
“When you have your own player, you’re successful with your own player, he’s test driven you and you’ve test driven him, it takes a lot of the risk out of the business to be able to go forward,” Giants CEO Larry Baer said.
“It also makes forming your team a lot easier because you know the plusses and minuses, in Buster’s case, there aren’t a lot of minuses. You know who these guys are, you know some of the X factors. A lot of times when you get a free agent, you don’t know the X factors, whether it’s work ethic or character. So, I think it’s going to be a continuing trend that teams try to lock up their own players as much as possible,” he said.
Earlier this week, St. Louis gave pitcher Adam Wainwright, a $97.5 million deal covering 2014-18 that raises his guaranteed income to $109.5 million over the next six seasons. At a lower level, Arizona is nearing agreement with Paul Goldschmidt on a $32 million, five-year contract that would run from 2014-18. The first baseman has less than 1½ years in the big leagues.
“It’s good to see these players are getting tied up with their club. It’s the way it used to be,” Giants manager Bruce Bochy said. “I know growing up when you were playing on a team they pretty much had the same core players, and it seems like it’s going that way again with the long-term contracts.”
Verlander’s deal broke the standard for pitchers set just a month earlier when Seattle’s Felix Hernandez agreed to a $175 million, seven-year contract. The 30-year-old right-hander didn’t feel a need to wait two seasons, become a free agent and find out how much baseball’s biggest spenders would offer.
“I wondered what it would be like to test free agency, but the pull of Detroit was too much,” he said. “Once spring training started I knew I wanted to stay.”
Verlander’s deal keeps his $20 million salaries for each of the next two seasons and adds $140 million in guaranteed money: $28 million each season from 2015-19. It includes a $22 million option for 2020 that would become guaranteed if he finishes among the top five in 2019 Cy Young voting. The deal could be worth $202 million over eight seasons.
Posey’s deal includes a club option for 2022 that could raise the value to $186 million over a decade.
He had been due to make $8 million this year. Instead, the 26-year-old gets a $7 million signing bonus, with $5 million payable Oct. 15 and the remainder Jan. 15, and his 2013 salary is reduced to $3 million.
He will make $10.5 million in 2014, $16.5 million in 2015, $20 million in 2016 and $21.4 million in each of the following five seasons. The Giants’ option is for $22 million with a $3 million buyout.
“You have to have the right player to do that,” said CAA Baseball agent Jeff Berry, who handled Posey’s contract and Matt Cain’s $127.5 million, six-year deal last spring. “That’s the key to it.”