Clayton Kershaw’s New Deal is a Bargain
Clayton Kershaw is the best pitcher in baseball and he’s only 25. But is he worth the seven-year deal that will pay him a MLB record annual salary of $30.7 million a year? For any other Major League Baseball team the answer is no, but after the Dodgers’ agreement with Time Warner Cable , he is actually a bargain.
Last year when Kershaw’s annual salary was $11 million he was ranked 63rd for pitchers in the NL in Dollars per Wins Above Replacement. If he were being paid his current salary he would have been 90th. To baseball stat heads this means that there are 89 pitchers who are more valuable than Kershaw. While that maybe a great argument against Kershaw’s deal for almost any MLB team, the Dodgers are not just any other team.
The Dodgers TV contract will give them $6 billion over the next 25 years. That equates to $240 million a year. They will have to share almost $80 million of that with the rest of the teams, but they will get back $51.7 million from MLB’s national TV deal and $33 million in revenue sharing that will even out anything they give back. With Kershaw’s new deal the Dodgers payroll will also be near $240 million a year, which puts the Dodgers in the sweet spot for MLB teams. It means the TV contract can cover the payroll and all of the revenue from tickets, ads, merchandise etc. will go to the owners.
According to “Baseball Prospectus”, starting pitchers represented 39.04 % of salaries last season. If the Dodgers have a payroll of $240 million, they should be paying their starters $93.4 million a year. With Kershaw’s new deal the Dodgers will be paying their starters $89.4 million in 2014.
After 2014 the Dodgers’ contracts will expire for the underperforming Josh Beckett and Chad Billingsly who just underwent Tommy John’s surgery, so they will have $28 million more to work with and still stay under the league’s average. The pitchers that will still be on the books, Kershaw, Zack Grinke, and Hyun-jin Ryu, were top 16 in the National League in Wins Above Replacement in 2013. With 15 teams in the National League, a case could be made that the Dodgers already have three starters who could be a NL team’s number one starter. Adding two pitchers for $14 million a year each would give Los Angeles five of the top fifteen highest paid pitchers in the NL. The Dodgers could be looking at a five man rotation of number one starters in 2015 without breaking the budget.
Kershaw’s salary may seem gaudy but he is well within the Dodgers’ budget. Overpaying for a Lamborghini may sound stupid for the common man but is not a big deal for a billionaire.