James McDonald has been pitching great this year. After his start tonight, the right hander has a 2.68 ERA in 50.1 innings, with an 8.9 K/9, a 2.9 BB/9, and a 0.4 HR/9 ratio. His numbers aren’t impacted much by luck, with a 3.22 xFIP. He’s currently in his third year of service time, and will be arbitration following the 2012 season. The strong start, and the pending arbitration raise the question as to whether the Pirates should extend him.
In the next few years, the Pirates will have Gerrit Cole and Jameson Taillon breaking in to the rotation. That could happen next year if both prospects keep up this solid pitching in the upper levels. McDonald would be a strong number three starter to add to those two groups. The Pirates have a lot of pitching depth in the upper levels (Rudy Owens, Justin Wilson, Jeff Locke, Kyle McPherson), but none of those guys have the upside of McDonald, who was one of the top prospects in baseball prior to the 2009 season.
What we’re seeing from McDonald this year could just be a small sample size issue. But it also could be a breakout season, with the right-hander finally living up to his potential. Considering some of the extensions paid around the league for similar players, it might make sense for the Pirates to consider extending McDonald.
A month ago, Jonathon Niese signed an extension with the Mets, paying him $25.5 M over five years. Niese was at the same stage as McDonald, entering the 2012 season with two years of service time. His deal bought out a free agent year, and came with two options totaling $20.5 M.
That’s been a very popular frame work for pitchers with two years of service time. Derek Holland signed a five year, $28.5 M deal with two option years in March. The option years, if exercised, make the total value of the deal $49 M over seven years.
Trevor Cahill signed a similar deal last year, going five years and $30.5 M, with options for $13 M and $13.5 M.
The going rate seems to be five years and $25-30 M, which is about $5-6 M a year. That’s not a bad price for McDonald, and is a huge value if this performance is actually legit. The two option years would provide a lot of value if McDonald does continue these numbers. If he regresses or gets injured, the options could provide a buyout.
There’s always hesitation with extending pitchers. They are prone to injury, or they can suddenly regress without warning. Look at Clay Buchholz. He signed a similar deal, only he went four years and close to $30 M with two options, rather than five years and two options. And now he’s been getting hit hard in 2012 with over $25 M left on his contract in the next three years.
Even with the risk, I think McDonald is worth an extension. I’ve always been higher on him than most, wanting him originally in the Jason Bay trade. If he signed a Niese-like deal ($1 M this year, then $3 M, $5 M, $7 M, and $9 M), there would be little risk involved. He’s most likely going to make $3, $5, and $7 M in the next three years, even if he’s a bit inconsistent going forward. He would cost much more than $9 M in 2016 as a free agent. So you’re buying out his arbitration years for about the price you’d pay anyway, and you’re getting control of three free agent years, with one of those years coming at a potentially big value.
There’s risk involved since McDonald is a pitcher, but his upside, and what he’s flashed this year makes him worth the risk.
Links and Notes
**The Pirates beat the Nationals 5-3. James McDonald started off great, taking a no-hitter in to the sixth, before giving up three runs. Kristy Robinson looks at how McDonald is taking a step forward thanks to his slider in tonight’s Pirates notebook.
**Prospect Watch: Gerrit Cole with another strong outing.
**Jonathan Mayo has Deven Marrero going to the Pirates in his mock of the top ten picks.
**The weekend draft prospects preview looks at all of the news in the last week. Also, the slot figures have been released for the top ten rounds. I’ve uploaded the 2012 Draft Pick Signing Tracker with the figures.