Pretty decent 6th starter

"You can't pay too much for a good pair of shoes."

Or a bag full of power pellets.

I hope they far outbid the Red Sox.

Supposedly could be worth up to $24M over the next 4 years. That seems really, really low?

What in the world kind of deal is this--4/24?

--Seems like a low annual salary for someone projected for 1.4 WAR and who was expected to make something like 2/$20 mil.
--The descriptions I read were something like "could reach a value of 4/24," which is even lower.
--Very unusual for a player making such a low salary to get signed for the long.
--Was there any team in baseball who wouldn't have wanted him on this deal?

I'm guessing the four years is to bring down the AAV, but I'm surprised Wacha would want to be committed to this for four years? Maybe there's an opt out.

Similar age pitchers who project similarly:

Perez, 32, 1.8 WAR: 1/20
Anderson, 33, 1.8 WAR: 3/39
Walker, 30, 1.5 WAR: 4/72
Stripling 33, 1.4 WAR, 2/25
Eflin, 29, 1.4 WAR, 3/40

ZiPS projected Wacha for a 95 ERA+ and 0.7 to 1.0 WAR (depending on how you look at it). That's lower than consensus but more consistent with the valuation people are reporting here -- which is still wild to me. I expected 1 year, 8-9m or so.

What in the world kind of deal is this--4/24?

--Seems like a low annual salary for someone projected for 1.4 WAR and who was expected to make something like 2/$20 mil.
--The descriptions I read were something like "could reach a value of 4/24," which is even lower.
--Very unusual for a player making such a low salary to get signed for the long.
--Was there any team in baseball who wouldn't have wanted him on this deal?

My guess is the chances of him earning 24 million over 4 years are virtually nil. I'd bet it's something like 2/20 with a couple of outrageously low mutual options or something like that.

My guess is the chances of him earning 24 million over 4 years are virtually nil. I'd bet it's something like 2/20 with a couple of outrageously low mutual options or something like that.

Would that hold up to scrutiny? Seems like it would be struck down as an obvious attempt to subvert the luxury tax.

ZIPS 110 IP, 4.63 FIP, 0.7 WAR
Steamer 154 IP, 4.40 FIP, 1.5 WAR

Some of the difference is IP, but even adjusting for that only gets ZIPS up to about 1 WAR in 154 IP--a number Wacha hasn't touched in years. So maybe MLB teams are with ZIPS on this one, in which case this deal makes a lot more sense.

I'd bet it's something like 2/20 with a couple of outrageously low mutual options or something like that.

It's player options that are counted for CBT purposes because the assumption is the player will take something over nothing. But, yeah,

Would that hold up to scrutiny? Seems like it would be struck down as an obvious attempt to subvert the luxury tax.

There's got to be some limit to what is permissible. I mean, the league isn't going to let 1/$21M with three $1M player options go through.

Vaguely related: Can anyone remember an instance of a team and player both agreeing to pick up a mutual option?

In 2017, Sam Miller did an ESPN piece where he looked at 100 mutual options and found that four had been jointly exercised (Moehler, Ja.Giambi, Millar, McGwire). Don't know the most recent one...

Would that hold up to scrutiny? Seems like it would be struck down as an obvious attempt to subvert the luxury tax.

I think it would. My (very limited) understanding of the rules on such things is that there are retroactive adjustments when options are exercised. So even if it's rated as a $6 million AAV right now it would be changed to $10 million if/when the options are rejected.

I don't know any specifics here so even if my numbers are off a bit I feel confident in my initial statement that whatever happens it won't be Wacha making $24 million over 4 years. Maybe it's 2/8 with 4 million options or something like that. As NaOH points out there is going to be a point where the league steps in.

In 2017, Sam Miller did an ESPN piece where he looked at 100 mutual options and found that four had been jointly exercised (Moehler, Ja.Giambi, Millar, McGwire). Don't know the most recent one...

Aramis Ramirez and the Brewers both exercised it in 2015. That's the only one I can remember.

Mutual options seem like those pacts people make, saying that if neither of them are married by 40, they'll marry each other. You know those pacts.

Mutual options actually seem worse, though. They're essentially saying that if both sides that the player's value is exactly what the option is, then they will both pick up the option. If that's the case, then they would sign for that amount anyway, so the option accomplishes almost nothing.

So it's a one year, $7.5 million deal.

Wacha deal with Padres:
Four years, $26M

Signing bonus $3.5M

2023 $4M

Club options, must be picked up simultaneously
2024 $16M
2025 $16M

If club options declined
2024 player option $6.5M
2025 player option $6M
2026 player option $6M
All exercised one at a time.

Kinda. I mean, under that arrangement, it seems like a good bet that one side picks up their side, right? If he's good, the Padres get him at 3/$39.5M. If he sucks, he gets 4/$26M.

I suspect Wacha expected to get something in the market more like 2/$26m or 3/$45m or something, and when it didn't materialize, then his agent had to get creative:

"Look, Michael, if your arm falls off in Spring Training, you'll get another $26 million, and your career will be over.

"If you are healthy and effective, you'll get another $39.5m, with a chance at one more contract after 2025."

Good for him - I hope he stays healthy, and I appreciate his contribution to the Red Sox last season.

that's an interesting deal

Kinda. I mean, under that arrangement, it seems like a good bet that one side picks up their side, right? If he's good, the Padres get him at 3/$39.5M. If he sucks, he gets 4/$26M.

I think he has to either bottom out or really sparkle for one side or the other to pick it up. The problem for the Padres is they don't really get him for 3/39.5, they get him for 2/32, given his recent performance and contracts is it likely that he is going to be worth such a contract? I'd say no. Conversely, how bad would he have to be to make his player option worth it? He got 7 million last year after ERAs of 6.62 and 5.50 in 2020 and 2021 (and 4.76 in 2019). I think the likeliest scenario for either option involves the words "Tommy" and "John." Other than that I think it's highly unlikely he pitches poorly enough to pick up his option. Likewise I just don't think he's likely to pitch well enough at his age and track record to be worth 2/32 (though if he does the Pads will win the division with room to spare).

Thanks for the examples up exercised mutual options, Der-K and RoyalsRetro.

Kinda. I mean, under that arrangement, it seems like a good bet that one side picks up their side, right? If he's good, the Padres get him at 3/$39.5M. If he sucks, he gets 4/$26M.

For him to end up a free agent, he has to be worth more than 3/18.5 with two opt-outs, but less valuable than 2/32. That middle area between those two seems like prime Wacha real estate. Seems like his market would be somewhere around the 2/16 to 2/20 that he was predicted to get this offseason. Maybe I'm underestimating the value of those options, I declare this a one-year deal!

I'm assuming the luxury tax hit for this deal will be the $7.5 mil he gets right now. Or will it include the player options? Will the bonus be spread across the 4 years that the deal could last?

Either way, this is an interesting alternative to incentive-laden deals. Instead of a 3-year, $20 mil deal with incentives that could take it up to 3/$42 mil, you do it with options and put off the tax hit.

Between this and the Darvish deal (which seems fairly bogus), San Diego is getting extremely creative with staying under the tax threshold.

I'm assuming the luxury tax hit for this deal will be the $7.5 mil he gets right now. Or will it include the player options? Will the bonus be spread across the 4 years that the deal could last?

I believe player options are included in AAV - so his tax hit is $6.5M each of the next 4 years. There's got to be retroactive accounting that goes on though, just haven't been able to find an example. Paxton's deal last year is still listed as a 1 yr $10M deal, which makes no sense. It should have been 2 yr $5M per.