Jose Fernandez injury: Marlins contract extension and arbitration impact

It is difficult to say that anything could be beneficial about the Jose Fernandez injury for the Miami Marlins. Both the team and the player were set back a good deal thanks to the injury, and there is always a question of what the pitcher will look like upon return. The injury has opened a lot of hard-to-solve problems for Miami.

One thing it has actually improved is Miami's ability to negotiate with Fernandez in terms of a new contract or during arbitration. The elbow injury and subsequent surgery, despite it coming with Fernandez's otherwise "pristine" arm, will almost certainly leave the 21-year-old starter with the "injury-prone" label. And any time a pitcher suffers an injury like this, it almost certainly affects their future earnings.

The reasons for this go beyond the "injury-prone" question. With Fernandez trying to recover from a major injury, his time and work in the majors is already down a year prior to his impending arbitration in 2016. That is one fewer season with which comparables can be gathered based on similar statistics. Fernandez is more likely to be compared to pitchers who threw a similar amount of innings or had similar circumstances surrounding them, such as other injuries that kept them off the field for extended periods of time. As such, those comparisons are likely to be weaker than they would have been had Fernandez thrown multiple Cy Young-caliber seasons.

The Standard Bearers

It is not difficult to find examples of pitchers who broke the arbitration and contract negotiation banks by throwing ace-level campaigns for multiple pre-arbitration seasons. Tim Lincecum won two straight Cy Young awards in his second and third seasons and earned a two-year, $23 million extension to replace his first arbitration season. Clayton Kershaw ran into a similar situation after the 2011 season and signed a two-year, $19 million contract, which eventually led to his record-breaking seven-year, $215 million extension before this season. The last two big-time ace starters to approach arbitration already set the number: around $20 million for two seasons was the starting negotiating price in the early 2010's for that kind of pitcher.

The Historical Example

Going back before then, we had two examples of elite-caliber starters who had not gotten off to the fantastic starts that these two pitchers had but still earned top-level extensions. Justin Verlander and Felix Hernandez essentially earned twin five-year deals worth near $80 million after working one year at $3.8 million. Essentially, these deals earned almost $14 million a year for six years, buying out three free agent years in the process.

Now keep in mind those numbers when you consider two ace-caliber guys who suffered pre-arbitration playing time loss due to injury or other concerns. Josh Johnson was a stellar rookie in 2006, which is the same year that Verlander began his career and a year after Hernandez pitched 83 innings. Johnson posted a 3.10 ERA and 3.99 FIP and ended fourth in the Rookie of the Year balloting. A year later, he started off terribly before being shut down for Tommy John surgery. He missed all of 2007 and half of 2008 with injury, but returned with decent numbers. Miami signed him in 2009, his first arbitration year, to a $1.4 million deal, 37 percent of what Hernandez and Verlander received. After one Cy Young-worthy campaign, Johnson received a four-year, $39 million contract that bought out two free agent years. This combined contract was worth $8 million a year for five years, or 57 percent of what Hernandez and Verlander received.

Zack Greinke got a similar contract. He had pitched one solid rookie year and one ugly sophomore campaign, then missed an entire season in the minors battling mental health concerns. The Kansas City Royals brought him back up in 2007, and he pitched well enough to earn a one-year arbitration deal at $1.4 million. After a strong 2008 season, he earned a four-year, $38 million extension, essentially the same deal Johnson earned after a similar amount of missed time.

Both injured starters and healthy starters posted similar pre-arbitration numbers.

Johnson is more comparable to Hernandez, and Greinke more to Verlander, but all pitchers had high marks coming out of prospect circles (the lowest ranking prospect was Johnson at 80th rank by Baseball America at his highest), and all did average or better with unspectacular results until after their arbitration season. Then they each signed extensions that reflected their differences more in injury than in skill. Each pitcher threw at least a 4.5-win season worthy of All-Star consideration in their first arbitration year before their eventual contract.

The differences in the contracts in a five-year, $80 million offer and a four-year, $39 million deal are both annual and in guaranteed money; Greinke and Johnson earned 60.8 percent annually compared to the other two starters and lost out on one year of guaranteed funds equal to $16 million.

Bringing it Back

Let's come back to the Fernandez situation. Let's presume he remains an elite starter at the level that Lincecum and Kershaw previously established. If Fernandez returns in 2015 and drops another dominant season like the one he was on track to show off this year, he could be looking at earnings between 57 to 61 percent that of Kershaw and Lincecum. Those two averaged $21 million over two seasons, meaning we could expect a two-year extension to be worth only $12.4 million and an arbitration pricing in 2016 of around $5 million. Given that Lincecum and Kershaw were set to break arbitration records when they headed to arbitartion before settling for deals near $9 million, a $5 million offer for Fernandez seems a mere pittance.

But for Miami, this is a huge boon. Every penny saved in south Florida is critical to building a successful franchise. If the Marlins can get away with cutting Fernandez's costs in half due to the injury comparisons, it may be the only benefit the team gets out of this lost 2014 season for Fernandez. But this is predicated on Fernandez coming back like Johnson did for two seasons and like Greinke has adjusted since his 2006 issues. If Fernandez falters instead, Miami will have a whole new slew of issues on its hands.