The contract is the largest ever for a pitcher in both total and average annual value ($35 million). Former Houston Astros ace Gerrit Cole is expected to surpass both of those numbers this offseason, but Strasburg still projects as the highest-earning pitcher in major league history. His career earnings will come out to just over $361 million when this contract ends. Strasburg opted out of the final four years and $100 million of his previous contract with the Nationals and used a career year, and a standout postseason, to get an additional three years and $145 million.
The Nationals always wanted to move fast with Strasburg, knowing his landing spot would dictate the rest of their winter. They won a title by spending big on their starting rotation. That approach never wavered, even after Strasburg decided to test the open market, and that led General Manager Mike Rizzo to take a significant leap. It also helped that Rizzo could skip some steps in the typical free agent process and that he knows, better than any other GM, what Strasburg provides.
“There is always a risk with seven-year deals. Seven-year deals for a pitcher, even more risk,” Rizzo said Monday. “We thought that the reward greatly outweighed the risk. It was a position of need, it was a player we identified and wanted, and we knew him better than maybe any other player in the league. And we made a commitment to him, and he made a commitment to us.”
The deal includes a full no-trade clause, no opt-outs and no options, according to a person with knowledge of the terms. It also has deferred money, a hallmark of big contracts drawn up by the Nationals under the Lerner family. Heading into negotiations, Strasburg’s agent, Scott Boras, was looking to use Max Scherzer’s seven-year, $210 million contract as a starting point. And while they sprinted past that deal, after Strasburg became the first pitcher to go 5-0 in a postseason, the deferrals are close to those in Scherzer’s deal.
Half of Scherzer’s deal is deferred to the seven years following the end of the contract. That means he will be paid $15 million for seven years, a total of $105 million. A person with knowledge of Strasburg’s deal described the deferrals as “close” to Scherzer’s, adding that about $80 million will be paid out to Strasburg in an even shorter time frame. There is also interest on the deferrals, according to another person with knowledge of them, to lessen the impact on the contract’s total value. Rizzo and Boras indicated Monday that Strasburg’s willingness to accept deferrals could help the Nationals sign, or retain, big-name players in the future.
“Stephen also made sure that he wanted to do something in this contract that allowed the team to sign the best players and to have the best teams, and he did that,” Boras said, nodding to the deferrals. “The mutuality, the intentions were there, so that allowed us to reach a deal rather quickly.”
Deferred money means the Nationals will spend less in the moment — and possibly the future, depending on the interest — but it does not soften the competitive balance tax (CBT) hit. Strasburg’s average annual value of $35 million is what will count against the Nationals’ CBT ledger for 2020. The threshold is set at $208 million, and indications are that the Nationals would prefer to stay under it. That’s how Strasburg’s deal directly affects the Nationals’ chances of retaining all-star third baseman Anthony Rendon.
In a recent television interview, Lerner said the Nationals could not “afford” both stars. They had around $72 million to spend before hitting the CBT threshold coming into this week, according to Cot’s Baseball Contracts, and that amount was essentially cut in half by the Strasburg agreement. The Nationals’ priority has been starting pitching, and Strasburg’s return keeps intact a rotation that features him, Scherzer, Patrick Corbin and Aníbal Sánchez. The total value of the contracts for those four is right around $604 million.
But such a concentrated investment may mean cutting costs elsewhere. Rendon is looking to be the game’s highest-paid third baseman, and that would mean passing an average annual value of $32.5 million. If the Nationals are looking to avoid the CBT and not use the World Series afterglow as an excuse to splurge, their budget just got very tight.
When asked whether the Strasburg deal took the Nationals out of the running for Rendon, Rizzo did not give a definitive answer. He expressed love for Rendon, a player who, like Strasburg, was drafted and developed by the Nationals. He mentioned, repeatedly, that Lerner has always given the front office the resources needed to compete for a title. There is concrete evidence of that now. But when it came to debunking Lerner’s assertion that Strasburg and Rendon can’t fit on the same payroll, Rizzo couldn’t see that through.
“When you look at those comments and then you look at the structure of this particular deal and the structure of deals we’ve had getting up to where we are right now, I think that Mark realizes that there’s ways to fit players in, there’s ways that you can field a championship-caliber roster,” Rizzo said. “And, again, the resources have always been there, so I don’t expect that to change.”
What mattered Monday, before Rendon’s free agency plays out and before the Nationals decide to chase him or look elsewhere, was that Strasburg could be in Washington for the rest of his career. One of Strasburg’s contractual demands was for Nationals Park to stay open for him all offseason, so he could make the short drive from his winter home and pump out his routine in the weight room. A person close to Strasburg said he has been doing that since mid-November, another indication that his heart was always set on returning to the Nationals.
Boras knew how important it was for Strasburg to stay put. Rizzo knew how important it was for ownership, and for him, to make that happen as soon as possible. Rizzo had not talked to Strasburg as of Monday afternoon, but he planned to call him some time in the evening. After six weeks of speculation, and a few more hours of it in Strasburg’s hometown of San Diego, Rizzo wouldn’t have much to say.
“Welcome home; glad to have you back,” Rizzo said of his planned message to Strasburg. “Although you only left for a minute.”