Future salary numbers key to when Stephen Strasburg gets called up by the Washington Nationals

By Dave Sheinin
Washington Post Staff Writer
Saturday, March 20, 2010; D01

VIERA, FLA. -- It is the biggest question involving the Washington Nationals right now, and the one on the minds of seemingly everyone around the game: When will Stephen Strasburg be in the majors?

Even if they know the answer definitively (and chances are it's still at least somewhat fluid), the Nationals' brass is keeping it a closely guarded secret.

That remained the case Friday night following Strasburg's latest performance in spring training. He allowed two solo home runs in the first inning of a 13-5 win over a St. Louis Cardinals split squad -- Tyler Greene smoked his first pitch over the left-center field fence -- and struck out eight in four innings. Strasburg surrendered two runs and four hits in all, throwing 53 of his 73 pitches for strikes.

Before the game, the Nationals would not reveal their plan for his next spring start, let alone the first chunk of the regular season. "There's decisions to be made after each start all the pitchers have," General Manager Mike Rizzo said. "We're going to assess it after we see where we're at and look at the pitching rotation and who needs the innings."

However, there are clues within baseball's complex salary structure that may shed some light on how the Strasburg situation may play out.

The bottom line: Beyond just the baseball factors -- even the greatest prospects can benefit from some time in the minors -- the Nationals have a strong financial incentive to hold off on Strasburg's big league debut until at least late May, in order to delay his reaching free agency and arbitration eligibility.

Here's how this works. Take a deep breath, because this is complex:

First, you need a basic knowledge of the breakdown of Strasburg's four-year, $15.1 million contract, which began in 2009: He received a $7.5 million signing bonus, plus salaries of approximately $100,000 in 2009 (a prorated portion of the major league minimum), $2 million in 2010, $2.5 million in 2011 and $3 million in 2012.

For the purposes of determining his future compensation -- or his "tender amount," in industry jargon -- the key number is his total earnings in 2012, which is calculated to be $4.875 million. (That's the $3 million salary plus one-fourth of the signing bonus, or $1.875 million.) This number will be important later.

You also need a basic understanding of baseball's salary structure. A player is typically under team control through his first six seasons -- three "zero-to-three" years (referring to a player's service time), during which the team essentially sets his salary, and three "arbitration" years during which a player's salary rises based on comparable players -- which means the Nationals will retain Strasburg's rights for at least three years beyond the end of his contract, after which he reaches free agency.

However, the Nationals can delay Strasburg's free agency by an extra year, and doing so is fairly simple. All they would have to do is keep him in the minors for at least 20 days, which would prevent him from gaining enough service time to qualify for free agency at the end of his sixth season, thus retaining his rights through 2016, instead of 2015. This isn't being cheap. It's being smart. And every team does it.

'Super Two' scenario

Under the above scenario, Strasburg would be tied to the Nationals for four years beyond the life of his current contract: 2013, 2014, 2015 and 2016. Three of those will be arbitration years, which typically include a player's fourth, fifth and six big-league seasons. But for Strasburg, the nature of that fourth year would depend on whether or not he will have qualified for arbitration as a "Super Two" player at the end of 2012.

Here, in a nutshell, is how Super Two status works: The top 17 percent of players who have fallen short of three full years of service time in a given year become eligible for arbitration as Super Twos. There is no predetermined date when a player gains or loses Super Two status; it depends on the service times of every other player in that service class. But usually, a team can safely block a player from gaining Super Two status by keeping him in the minors until late May of his rookie season.

(The San Francisco Giants famously miscalculated on this in 2007, calling up Tim Lincecum on May 6, which wound up being about a week too soon to prevent his Super Two status in 2010. As a result, Lincecum will make $9 million this year in salary/signing bonus as a Super Two, instead of the $700,000 or so the team could have paid him as a zero-to-three player, had they kept him down an extra week in 2007. We'll return to the Lincecum example in a moment.)

If the Nationals keep Strasburg in the minors long enough to prevent him from reaching Super Two status after 2012, he would be considered a zero-to-three player in 2013, saving the Nationals a lot of money. This, too, happens all the time and is seen as smart management. The Baltimore Orioles did it last year with Matt Wieters, who is to catching what Strasburg is to pitching, and whose call-up came May 29.

But there is an additional catch in Strasburg's case because his contract is a major league contract. By rule, a player under team control cannot receive a pay cut of more than 20 percent from the previous year. Here is where Strasburg's 2012 compensation -- that $4.875 million figure -- comes into play. Because of this rule, the Nationals would have to pay Strasburg at least $3.9 million in 2013 (that's 80 percent of $4.875 million) if he fails to attain Super Two status.

Comparative case

Now, let's take a major hypothetical leap and apply Lincecum's case to Strasburg's. Let's further assume Strasburg turns out to be as good as Lincecum -- a huge assumption, given Lincecum's unprecedented accomplishments (two Cy Youngs before reaching arbitration eligibility). Finally, let's also take a guess and extrapolate Lincecum's third and fourth arbitration years from his first two.

Prorating the signing bonus in the new contract he signed last month, Lincecum will earn $9 million and $14 million in 2010 and 2011, his first two arbitration years. We'll be conservative and say those figures will rise to $18 million and $22 million in 2012 and 2013, his remaining arbitration years. (The actual figures will depend on several factors, including how well he performs.)

So if, for argument's sake, Strasburg is as good as Lincecum (and thus is compensated equally via arbitration), his first three arbitration years will earn him $9 million, $14 million and $18 million. If Strasburg reaches Super Two status, those first three arbitration years would be 2013-15, with a fourth arbitration year in 2016, in which (in our hypothetical universe) he would make the same $22 million as Lincecum.

But if Strasburg fails to attain Super Two status, his three arbitration years would come in 2014-16, with a zero-to-three year on the front end, in 2013.

So, using our made-up numbers for Lincecum and applying them to Strasburg, here is what is at stake for the Nationals:

-- If Strasburg reaches Super Two status, he gets: $9 million in 2013, $14 million in 2014, $18 million in 2015 and $22 million in 2016, for a total of $63 million in those four years.

-- If Strasburg fails to reach Super Two status, he gets: $3.9 million in 2013, $9 million in 2014, $14 million in 2015 and $18 million in 2016, for a total of $44.9 million.

In other words, it could be worth about $18 million to the Nationals -- or a little less than what they are paying for two years of Adam Dunn -- to delay Strasburg's debut until Memorial Day (when the Nats will be on the road).

Two quick thoughts:

One, this franchise has survived for five years without him. What's another two months?

And two, you may want to get your tickets now for the June 4-6 weekend series at Nationals Park against the Cincinnati Reds.

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