The Orioles should be having extension talks with Kevin Gausman

On the eve of his arbitration hearing in Arizona, Kevin Gausman and the Orioles finally agreed to settle at a salary of $5.6MM for 2018. Gausman had filed at $6.225MM, and the team countered at $5.3MM. This one seems like a “win” for the Birds.

However, with another prominent Oriole seemingly set to go year-by-year in the arbitration system, should the team be thinking about long-term deals with their young players while said deals may still be relatively affordable?

Owner Peter Angelos is notoriously wary of handing-out large/ long free agent contracts, especially to pitchers (except when he’s not. See: Jiménez, Ubaldo. See also: Davis, Chris.).

For that reason, it was a tad disappointing that Dan Duquette went on record yesterday that the Orioles have not engaged in extension talks with Gausman, who is set to become a free agent after the 2020 season.

“But wait a minute,” you might be thinking, “didn’t Gausman just turn-in a terrible 2017 season? Why on earth would the O’s be interested in keeping him around longer than 2020?”

While Gausman did inarguably have a putrid first part of 2017, he turned it around to the tune of a 3.39 ERA, 10.09 K/9, and 2.74 BB/9 in his last 19 starts. That’s a relatively promising sample size of ace-quality pitching, and while it wasn’t all smooth sailing for The Goose, there were ample signs that he made real adjustments that led to his improvements being sustainable.

When players sign extensions during (or even before) their arbitration years, the price is understandably lower because the team is taking on a greater risk (some say). But really, if a team is able to identify a special talent (see Gausman, Kevin. See also Schoop, Jonathan—but that’s a different conversation for another day) and buy free agent years for pennies on the dollar, I would argue that the risk-reward ratio is far more favorable for the team than it would be signing aging free agents at rapidly inflating prices.

When you factor in said soaring free agent prices, the present value of a deal must be taken into consideration and compared against its speculative future value. What is a “fair deal” today may look like an absolute bargain in two years, or three years, for example, only by virtue of a quickly changing market. Price per WAR keeps going up; this is like locking-in an interest rate before that rate takes way off.

Anyhow, the Orioles seem content to continue to let their best players go year-to-year in arbitration, for better or for worse (see: Machado, Manny). The last time the O’s bought-out free agent years by extending a player during his arbitration years was in 2012, when they inked Adam Jones to a then-record six year/ $85.5MM deal that expires at the end of 2018. In retrospect, an AAV of $14.25MM for his last year of arbitration + five free agent years of Adam Jones looks like a complete steal.

Notable players that have signed extensions during their arbitration years include:

• Wil Myers;
• Buster Posey;
• Starlin Castro;
• Kevin Kiermaier;
• Gio Gonzalez;
• Freddie Freeman;
• Ryan Braun;
• Kyle Seager;
• Albert Pujols;
• Justin Morneau;
• Johnny Cueto;
• Giancarlo Stanton;
• Joey Votto;
• Troy Tulowitzki;
• Evan Longoria;
• Justin Verlander;
• Felix Hernandez;
• Zack Greinke;
• Craig Kimbrel;
• Huston Street;
• Matt Moore;
• Chris Archer;
• Andrelton Simmons;
• Christian Yelich;
• Carlos Gonzalez;
• Ryan Howard;
• Hanley Ramirez;
• Andrew McCutchen;
• Justin Upton;
• Corey Kluber;
• Jon Lester;
• Chris Sale;
• Madison Bumgarner; and, oh yeah:
• Mike Trout.

Not every player locked-up pre-free agency is going to be Mike Trout. In fact, no player might ever be Mike Trout ever again, period. But not every deal of this nature is going to have the same ending as Ryan Howard’s, either.

On balance, it seems like teams willing to identify and pay for special talent early in a player’s career make out like bandits insofar as excess value generated by that player over the life of the contract.

The question remains: is Kevin Gausman that type of special talent? The answer is probably “it doesn’t matter, because the Orioles don’t seem to participate in this sector of the market.”

Regardless, you can find me over in the corner beating a drum for Gausman. Maybe if I do so loudly enough, somebody in the Oriole’s front office will hear me.