Justin Masterson is a year away from free agency, but there are reports both he and the Indians would be open to working out a contract extension this offseason instead. What might a new contract for Masterson look like?
Before we get any further into things, let's take a took at some key numbers for Masterson from the last three seasons:
There aren't any superstar numbers there, but 2011 and 2013 were both very good seasons. Depending on whose math you like, Masterson was worth 4.1 (Baseball-Reference) or 4.3 (FanGraphs) WAR in 2011, and 3.4 (both) in 2013. OF course, 2012 was a different story, as Masterson had a lot of trouble with run prevention and put up just 0.3 (BR) or 1.9 (FG) WAR. I imagine many are willing to largely overlook that season, but it's too recent to be ignored completely.
If you view 2013 as Masterson's 'true talent' and see him as roughly a 3.5-win player, you might expect WAR totals of 3.5, 3.5, 3.0, 2.5, 2.0 over the next five seasons. That path has him maintaining his production through the age of 30, then slowly declining, which is about as 'normal' a path as one could predict for him. That works out to 14.5 WAR, and by the widely used $6M-per-WAR calculations, that would put Masterson at 5 years, $87 million*.
*I think a contract that covers 2014-2018 is the mostly likely outcome, if there is in fact a deal. It takes a really special pitcher for a team like the Indians to justify anything longer than 5 years (I believe only 8 pitchers have signed a deal for 6+ years during the last decade), so I'd be shocked if it was longer than 5, but Masterson is also unlikely to go for anything much short . Perhaps he'd go for 4 years, so feel free to knock a year off the contract figure below, but you'll also need to add $1-2 million per year, because if he settles for a shorter deal, it'll be for more money per annum.
That's very similar to many of the predictions for the contract free agent Matt Garza will receive this offseason. Coincidentally, Garza is the pitcher Masterson has been most similar to through the age of 28, according to Baseball-Reference, making him a fairly reasonable comparison, I think.
It also seems worthwhile to point out that last offseason, Adam Wainwright was in a similar position, one year away from free agency, and agreed to an extension with the Cardinals instead. That deal was for 5 years, $97.5 million. Wainwright's health history was spottier than Masterson's, but Wainwright had also been a quite a bit better pitcher than Masterson, worth at least an extra win a season.
Okay... are there any other factors that might have a large impact on Masterson's value?
One concern might be the injury that kept him out of the rotation for the final month of 2013. He was effective as a reliever in the final week of the season, but only in a small sample, and without having to attempt to pitch more than an inning or two. I don't think that injury will be much of an issue. It was a strained ribcage, not something with his shoulder or elbow, so it shouldn't be a major cause of concern. You could even argue that the salary calculations based on WAR are too low, as his 2013 number would have been higher with an extra five starts.
The biggest factor that ought to impact a potential extension for Masterson this offseason is that he's not a free agent. The Indians would be absorbing added risk in extending a player before he's in a position to leave, while Masterson would be insuring himself against the possibility of an injury in 2014 that severely cuts into his future-earnings potential. Players should always come at a discounted rate in such a situation. Masterson will likely earn $10M in 2014 if no extension is worked out, so on some level, an extension should be viewed as covering 2015-2018, with $10M added in for 2014. Seen that way, the 5/$87M I mentioned above is 4/$77 for seasons that might be expected to total 11 WAR.
I believe that if Masterson has a 2014 similar to his 2013, he'll be able to get something like 5/$85M next offseason, but that if he wants to keep from worrying about an injury that could derail the biggest contract he'll ever be in a position to land, he'd likely be looking at a $10 million or so discount.
The neighborhood of 5 years, $75 million, that's what I think it would take to work out an extension with Masterson this offseason.
Should the Indians sign him to such a deal? That's a whole other question...