February 8, 2013 at 6:52 AM
An important thing to consider when it comes to Felix Hernandez and the start point of his new deal
Last night, ESPN.com’s Buster Olney reported that the new contract extension for Felix Hernandez is actually a five-year, $135.5 million deal that starts in 2015 — after his current agreement expires two seasons from now. Initially, USA Today reported it as a seven-year, $175 million contract extension that begins right now and replaces the old one.
From a money and years perspective, there’s no difference. Hernandez has two years, $39.5 million in base salary left on his current deal. Add another five years, $135.5 million to that and you get the initial seven years, $175 million reported.
So, both Olney and USA Today are “right” when it comes to the years and dollar amount.
Here’s the difference.
If we’re continuing with the old contract for two years, then nothing changes money-wise with the team’s current payroll when it comes to a Hernandez extension.
For 2013, Hernandez will earn the $19.5 million base, another $700,000 as part of his pro-rated signing bonus and then a $500,000 bonus for winning the Cy Young Award in 2010. A total of $20.7 million, based on how the Mariners calculate their payroll.
Had the new contract started immediately, then there’s a good chance Hernandez would have been earning more this year and next.
After all, the average yearly dollar amount of a seven-year, $175 million deal is $25 million.
So, that’s nearly $5 million more on average than Hernandez is set to earn right now — and that’s not even considering whether there would be a signing bonus involved. Now, it’s possible the Mariners would have tried to backload such a deal in order to keep Hernandez’s 2013 and 2014 figures in line with what he’s currently set to make.
But now, they don’t have to.
If the deal starts in 2015, his salary this year and next should stay the same.
And that’s important for a team that has insisted on a payroll below $100 million.
Had Hernandez’s new contract started this year, you might have to add $5 million more to his salary and you’d be sitting with a payroll well over $90 million.
As it stands right now, assuming a salary of $9 million or so for Joe Saunders, the payroll looks to be about $87 million.
Big difference. The Mariners — even if you factor in a contingency fund of $5 million for performance bonuses — might still have enough money to go get somebody else. Probably not a Michael Bourn unless — big unless — the Mariners are willing to dump some salary in a trade as well. Or, unless they are willing to take payroll up to $100 million or higher.
I wouldn’t bet on that last part.
But there would appear to be enough left over for the Mariners to bring somebody else in if they wanted, be it a starting pitcher, a reliever, or whoever. If there’s a trade in-the-works, maybe it involves taking on a few extra million in what they receieve.
Maybe nothing else happens. Perhaps this is it.
In any event, that’s the big difference between a Hernandez extension starting in two years and running five seasons versus starting right now and going the full seven in replacing his current deal.
No matter what the Mariners were prepared to spend heading into the winter, this latest Hernandez deal — assuming it starts in 2015 — changes absolutely nothing.