Masahiro Tanaka opting in is first step towards New York Yankees’ next dynasty
By Sean Dyer
Masahiro Tanaka decided to opt into the final three years of his contract, making him a New York Yankee for the foreseeable future. Tanaka’s decision is the first step towards the next dynasty in the Bronx.
Masahiro Tanaka announced Friday that he would remain a New York Yankee and not test free agency. Tanaka will now stay in the Bronx for three more years and be paid $67 million over that span.
Most expected Tanaka to opt out of his contract and pursue more money in free agency. Tanaka, however, surprised the baseball world by sticking with the Yanks in what he called “a simple decision“.
For Yankee fans, you should be happy that Masa is back. He will solidify the starting rotation in 2018 and could have an even greater impact on the New York Yankees’ next dynasty.
First of all, Masahiro Tanaka opting into the remainder of his contract will likely save the Yankees money. Tanaka will make $67 over the next three years, which is just over $22 million annually. Although that seems like a lot (and it is), it is just a tick below the market value of the top free agent starting pitchers this offseason.
If Tanaka opted out, he would have left a rather glaring hole at the top of New York’s rotation. To fill that hole in free agency, the Yankees’ options for frontline starters would be re-pursuing Tanaka or going after Yu Darvish or Jake Arrieta.
Obviously, if Tanaka opted out of ~$22 million annually to test free agency, he wouldn’t have accepted less than that to come back to the Bronx. As for Darvish and Arrieta, they are both expected to make more than $22 million a year. According to spotrac, Arrieta is likely to make $25 million annually when he signs this offseason and Darvish is likely to make $26 million.
Arrieta and Darvish are both 31 years old and would be looking for contracts to lock them up for five to six years. Tanaka, on the other hand, just turned 29 last week and by opting in is only locked up for three more years. Tanaka is a younger and cheaper option who gives the Yankees more flexibility moving forward.
Meanwhile, aces like Max Scherzer, Clayton Kershaw, and David Price are all making $30+ million annually. Tanaka has been healthier and has pitched better of late than Price and when he’s on, Tanaka can push himself close to that top-tier of starting pitchers that Scherzer and Kershaw are in.
(Disclaimer: I’m not comparing Tanaka to Scherzer or Kershaw. They are better and much more consistent pitchers. However, when Tanaka is at his best, he is closer to those two than an $8 million salary difference would imply.)
Don’t want to chase the top of the pitching market? Want to replace Tanaka with a second-tier free agent starter?
Well, the second-tier of free agent starting pitchers consists of Alex Cobb and Lance Lynn. Both are solid pitchers, but neither has the upside of Tanaka.
Cobb and Lynn are both 30 years old and won’t come cheap on the open market. Spotrac has Cobb’s likely annual value at $16 million and Lynn’s at $18 million.
Making things more complicated, Cobb and Lynn were both extended qualifying offers. MLB.com’s Anthony Castrovince does a nice job explaining qualifying offers here.
Basically, when a free agent’s former team extends that player a qualifying offer, it is essentially a one-year contract worth a certain amount each offseason (this year is $17.4 million). That player can accept the QO and return to his former team on the one-year/$17.4 million deal. If he declines that offer, however, he heads to free agency but still has that QO attached to him.
What is attached is draft pick compensation. When a new team signs that player, they lose a draft pick that instead goes to the free agent’s former team. Castrovince explains specific draft pick compensation in detail.
To give an example, if the New York Yankees signed Cobb, they would forfeit a draft pick to the Tampa Bay Rays. Signing Lynn would mean forfeiting a pick to the St. Louis Cardinals. And signing Arrieta would forfeit a draft pick to the Chicago Cubs as he was extended a qualifying offer as well.
Adding a starting pitcher in free agency is costly, both in dollars and draft picks. That is why having Masahiro Tanaka opt into the final three years of his contract is huge for the New York Yankees. The Yanks stabilize the top of their starting rotation with a younger starter than what’s available in free agency while saving money and draft picks.
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Saving $3-4 million may not seem like much for the Yankees, but with Hal Steinbrenner’s goal of getting under the $197 million luxury tax threshold, every penny counts. New York could also use that saved money to pursue CC Sabathia, Todd Frazier, and/or Shohei Otani.
Masahiro Tanaka coming back also helps the Yankees outside of the financial benefit. Having Tanaka say it was “a simple decision” to come back shows that the Yankees have something special going on in their clubhouse. Most players would want to test free agency and get more money after the postseason that Tanaka had. Instead, he wanted to stay in the Bronx.
Perhaps, Tanaka can talk about that special culture when the Yankees are pursuing Shohei Otani. CBA rules have eliminated New York’s financial advantage in the Otani sweepstakes and getting him to sign will require a college recruiting-like pitch. Otani will have to feel comfortable wherever he goes and having someone who made the Japan to New York transition like Tanaka advocating for the Yankees could be crucial.
Tanaka returning also gives the Yankees their top-three starters for 2018. Young guys like Jordan Montgomery and top pitching prospect Chance Adams now don’t have to feel pressured to step up in Tanaka’s absence. They just need to be back-end starters for New York. This will help Adams break into the major leagues and Montgomery continue his transition and will give both players more confidence.
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Masahiro Tanaka opting into the remainder of his contract sets up the New York Yankees starting rotation for the foreseeable future. It also takes pressure off young guys as they fill in the backend of the rotation, saves the Yankees money and draft picks in free agency, and shows that the Yankees clubhouse has something special.
This just has the feeling of a big-time move for the future of the New York Yankees franchise and it could be the first step towards the next dynasty in the Bronx.