It wasn’t a week ago that Cubs GM Jed Hoyer essentially said the Cubs weren’t looking to extend Jeff Samardzija until he shows another year of success.

Well, so much for that. From Gordon Wittenmyer:

According to multiple sources, the Cubs have reached out to Samardzija about the possibility of exploring a multiyear deal with the big right-hander, who’s arbitration-eligible after making an impressive transition from the bullpen to the rotation.

Just as there’s no reason not to listen when teams want to make an offer for your players, and there’s no reason not to inquire about the demands of a wide variety of free agents, there’s no reason not to reach out to Samardzija to see what he’s thinking about an extension. He’s professed a desire to stay in Chicago, and the Cubs clearly view him as a long-term piece of the puzzle, so maybe there can be a fit?

Well. Maybe.

Samardzija is an interesting extension case, one full of conflicting inputs. He’s coming off a good year as a starter … but it’s just one year. He’s a “young” starter … but he’ll turn 28 in January. He’s just entering his first year of arbitration … but he’s already earned about $13 million in his career.

Even Samardzija’s stats from 2012 include a little conflict. His 3.21 K/BB, 3.55 FIP, and 3.3 WAR were all great. But he was susceptible to the long ball (20 homers in just 174.2 innings), and his 3.81 ERA/103 ERA+ don’t scream “great.”

Taking it all together, how do you really approach an extension for Samardzija? With a relatively limited run of success as a starter, you don’t want to go too long with him. But, since he’s already under control for three more years in arbitration – and has already earned some $13 million in his career – the offer would have to be long enough to provide value both to Samardzija and the Cubs.

… or maybe each side just wants to lock in some cost certainty for these three years of arbitration, rather than hashing it out on a year-to-year basis? Given the Cubs’ financial position (by which I mean their theoretically large-market payroll), they are in a good position to be able to go year-to-year without being crippled by year three if Samardzija should prove that last year wasn’t a fluke. So, even if the extension was just about cost certainty, it would seem they would need to get something in return, like, say, an option year or two tacked onto the end of the deal?

Under that kind of a structure, and employing the theory that players tend to get about 40% of their market value in year one of arbitration, 60% in year two, and 80% in year three, a shorter Samardzija extension could look something like this:

2013 (age 28) – $7 million

2014 (age 29) – $10.5 million

2015 (age 30) – $14 million

2016 (age 31) – team option for $14 million

2017 (age 32) – team option for $14 million

Too much? Too little?

One rub in the calculation is the fact that it is based on the presumption that Samardzija will maintain a 3.3 WAR throughout his arbitration years, with the value of a win at $5.5 million (making his annual market value about $18 million). You could argue that each of those numbers is too high or low, or you could argue that in an extension situation, it’s unreasonable to assume Samardzija will equal his value from 2012 in each year (given that he’s done it just once). Perhaps there should be a discount built in to each year (for one thing, just on a gut basis, it’s hard to see Samardzija getting $7 million in his first year of arbitration). Should we shave 10% off of each? 20%? How much of a discount is Samardzija willing to give for a payment up front?

You can see in those numbers why it might be difficult for the two sides to come to an agreeable extension. Those figures represent one reasonable calculation of what Samardzija could expect to get over the next few years, but also demonstrate why the Cubs might be content to go year-to-year in arbitration, if they aren’t going to get a significant discount.

What are your thoughts on the desirability of a Samardzija extension? The length? The price? Your confidence that 2012 Jeff Samardzija (or better) is the real Jeff Samardzija?

  • MightyBear

    I like the calculation and it seems good. He hasn’t had any arm troubles (knock wood), these are his best years, he is a solid starter now and has the potential to be a dominant starter. That contract isn’t going to mortgage the future and it gives Jeff some security. I think its good for both sides and if I’m the Cubs and/or Jeff, I do it in a heartbeat.

    • justinjabs

      Heh. Wood.

  • Norm

    WAY too much for me!
    He was only at $2,640,000 for 2012.
    I would hope the salaries start MUCH lower than $7M for 2013.

  • CubFan Paul

    $7M seems a bit much for year 1 and it throws off everything else.

  • ETS

    His ERA plus looks much better if you take out a few trouble starts, but so do many other pitchers. We really just need to see him start another season to determine what kind of pitcher he is. The catch 22 here is that if he is great next season that price tag will be high.

    Personally, I just love watching him have success. Seems like a good guy, and it’s nice to see the cubs were justified bribing him away from football.

  • Mike Taylor

    I think we’ll offer him an Arroyo-type extension, 4 years $27M.

    • CubFan Paul

      Arroyo signed a 2 yr $27M deal after his 3 year extension was up…

  • Derrick

    5 yrs for 35- 45 mil sounds about right to me. I say lock up Shark and Garza (If healthy) and we have the beginning of a decent rotation. Hopefully we can continue to draft and develop some pitching.

  • Matty V

    This entire discussion gives me a slight headache just thinking about it. I’m glad I’m not the GM and/or player’s agent having to figure this stuff out. I know Shark’s situation is extremely unique (given his first contract was a major league one, and he’s been bounced around from the pen to the rotation before this past season). Is there another player we can use as a point of reference (similar age, numbers, etc) to gauge what might be a reasonable extension?

    • ETS

      i think it’d be a fallacy to attempt to compare. What it comes down to is the number Hoyer currently thinks Jeff is worth vs what Jeff believes he is worth, and if they don’t come to an agreement then how those numbers change after next season.

  • Spencer

    I’m not really into the idea of giving him an extension since he still has all of his arb years left. I’d wait at least one more season and see how he does as a starter without an innings limit. If 2013 was the last season the Cubs had control over him, then yeah. Extend him. Maybe he bombs in 2013 as a starter, so I don’t think there’s any sense in giving him a huge K with just one year of starting under his belt. Nothing wrong with a “wait and see” approach here.

  • When the Music’s Over

    If the Cubs are so hyper sensitive towards future payroll flexibility (and have so much to spend now), why not heavily front load this type of deal? Same would have applied for Castro’s extension. It would additionally allow for better trade scenarios in the future.

    In the case of the roughly $60M over 5 years contract floated in the post, why not go $16M, $14M, $12M, $10M, $8M?

    Just curious.

    • Drew7

      Because a dollar today is more valuable than a dollar 5 years from now.

      • hansman1982

        Yup, ideally you would pay out a contract like that as such:

        2013: $1M
        2014: $1M
        2015: $1M
        2016: $1M
        2017: $56M

        Thus you could, in theory, invest the $11M saved each year and reduce the overall cost of the contract.

      • myporsche

        The dollar will be useless in the near future. Probably will be replaced by a worldwide currency

      • When the Music’s Over

        Thanks for the intro to finance refresher.

        What I was trying to say was that the team continues to repeatedly state that available cash isn’t the issue in not fielding a competitive team now, but rather is a function of not having their hands tied later with big contracts when ready to compete. If that is true, why not front load a contract? Sure, the team may lose some money in interest, but the player would also gain that same exact amount in interest, which in theory should allow the team to offer the player (if the agent is smart enough to explain the relationship of the time value of money to his client) a slightly lower raw contract value.

      • Pat

        Not necessarily. A dollar in 1926 was worth a lot less than a dollar in 1932.

  • Big Daddy

    I say wait another year. I don’t think Shark will get 7 mil in arbitration this year. I think the money Theo saves from this year going to arbitration (3 or 4 mil) will counteract what raise Shark gets next year if he has a great 2013. Then do the extension if he has that great year.
    Possible contract:
    2014: 8.5 mil
    2015: 11.5 mil
    2016: 14 mil
    2017: option 14 mil
    2018: option 14 mil

  • Mark

    Why not lock him in to a heavily front loaded 5-6 year contract? He should be smart enough to know the value of a dollar now is more than in the final years of his contract, and it would leave the cubs with extra cash for possible signings.

  • Chad

    front load the contract. We already know the cubs won’t be buying expensive FA this year, so put the money in a 5 or 6 year deal at the front end. Then you can use the saved cash for FA in 2 or 3 years. Plus if you decide to trade him later it is easier with the nicer contract. (Not saying they should trade him, but if they need to in year 4 or 5 of the contract, it is easier to trade a 5 million/year pitcher than 12 or 14.

    Also, I say extend him now on potential. If he blows up again next year and has a good to great season he’ll be even more expensive to extend.

  • Cub Fan Dan

    I dont know how reliable is, but they estimated Samardzija’s 2013 salary at $2.9mm. If that were accurate, wouldn’t you think the deal would be more in the 4 years in the $25-30mm range? or are they just way off?

    • Mike Taylor

      traderumors are the best site at nailing arb estimates

    • Brett

      Their projections are as good as anybody, and like I said – I wasn’t so much putting a figure on what Samardzija WILL get in 2013; just using a model that folks have used successfully in the past. That said, I think their projection on Samardzija is way too low.

      • Cub Fan Dan

        I thought it was kind of low when I first saw it too. I expected the $5-7mm range.

        Tim Dierkes over there also proposed a 4 year/$27mm extension to Samardzija based on Johnny Cueto’s extension a year ago.

        I think they’re a little low & you may be a bit high (not high like a Colorado voter). Im thinking like 4 years for $36mm with an option for a 5th. I dont know, Im just going somewhere in between their figures & yours.

  • King Jeff

    I liked what I saw out of Shark this year, but I don’t think it’s enough to sign him long-term yet. I don’t think he’s going to set any arbitration records this year and it’s just as easy (maybe easier) to sign him to an extension during the season.

  • willis

    I side with the hold tight side on this discussion. As much as I grew to like Shark, still it’s one year. Let’s see what he offers next season, and if it is effective, then you start playing with the extending idea, and you can still get him for a reasonable price. But I can’t think of the positives of throwing 5 or so years at someone who has had one good year as a starter. Unleash him this year, see if he can follow things up with another good season.

  • mysterious4th

    I understand they want to lock him up. BUT, he had 1 good year, he is first time eligible. Let him get half way thru next season and if it compares to this year then great we extend him. He hs already made decent money. I know the FO has the $ to throw around. I just don’t want it thrown to easy. I like Shark, I just want his track record proven before the amount is dished out to him.

  • Mike Taylor

    ’12 – 2.4M
    ’13 – 2.88M (20%) arb est
    ’14 – 4.032 (40%) arb est
    ’15 – 6.4512 (60%) arb est
    ’16 – 11.61216 (80%) arb est
    ’17 – free agent ($15M+)
    ’18 – free agent ($15M+)

    4 years of arbitration = $25M

    6 years $40.5M contract =
    ’13 – $3.75M
    ’14 – $3.75M
    ’15 – $6.75M
    ’16 – $6.75M
    ’17 – $9.75M
    ’18 – $9.75M
    which buys out 2 years of potential free agency ($15M per, which saves $10.5M) – [3.75-2.88 = $0.87M] = $9.63M of total savings.

    • Brett

      I think you’ve got one too many arbitration years in there for him. He’s only got three.

  • Rizzo 44

    I say pay him 6M in 2013, 8M in 2014, 12M in 2015, 14M team option in 2016, 16M team option in 2017. Thats a total of 5 years and $56M thats an Avg of a little more than 11M per year. That will be a nice payday plus team friendly. I like the idea of locking him up though. I still think they should trade Garza.

  • JR

    If the Cubs can convince Shark that he is still a pretty risky player to pay, sure extend him. But if he’s going to be unreasonable like Garza seemed to be last offseason I wouldn’t worry about it yet. Also, I didn’t realize he was that old. I know he doesn’t have a ton of mileage on his arm, but how much better is he going to get over the next couple years? Hard to project for sure.

  • http://bleachernation loyal100more

    give us another solid year….and we’ll show you the money shark…not ready to drop the big bucks you may or may not be worth….surely you are familiar with the clubs history of bad contracts. the new era must be a smarter one….i love the shark, but like many am not convinced just one season removed from the pen. im REALLY pulling for the shark this year. i must admitt id be crushed if indeed he was a fluke, and are search for quality starting pitching just got even tougher.

  • Don

    Do arbitration for one year and see how he performs. If repeat of last year, lock him up long term as he is a stud who will be durable and who more than likely will not get injured.

  • Patrick G

    I like a semi-short contract. About 3-4 years maybe an option for about 24-32 mill. If he continues his growth and is a reliable pitcher you can offer another extension for 3-4 more years when he’s in his early 30’s. I say front load the contract while we have enough money now to spare, and if it doesn’t work out at the end of the contract, he’ll be a cheap pitcher.

  • Ben

    I just don’t see what the Cubs gain by doing the extension. A couple of option years would be nice, but at 14 million+, it doesn’t seem like much of a discount. Yes, if he absolutely blows up, then that would be a steal. But the Cubs seem to be taking all the risk here, esp given his age when he becomes a FA.

  • Jade

    Why give a 28 yr old who has 3 yrs of arb left and has only one “full” season a 3 yr contract?

    3 yrs 24-26 mil is about what he’d earn through arb if healthy and productive now if you could get 4 yrs 27 or 5 years 36 or something that might be a good deal and really the only reason to sign him now.

    Sure we’d all like to see him throws 200+ next year but then the price would goes up substantially and there would still be risk, like there is with all pitchers. So its a gamble. And if you have the money now, a front loaded contract would be a great idea. Though I think the way to do it is through a signing bonus. Give Shark 5 yrs 40 million 15 mil is a bonus and goes on this yrs payroll and then 5 mil a year for the remainder.

  • Ed Wiese

    I think its a GREAT MOVE on the part of our CUBS. I wonder if he still lives in Valparaiso where he was born and raised. I was at a CUBS game back in 2008 and saw his ESCALADE. I knew it was his because it had a Porter County plate!

    • fortyonenorth

      Yes, I believe he has a place in Wrigleyville and another in Valpo. Keep thinking I’ll run into him at the Jewel.

  • BluBlud

    CJ Wilson and the Rangers would be a example to go by. If they had locked CJ up 2 years ago, they’d still have him. Lock Shark up.

    2013 5.0 M
    2014 7.5 M
    2015 10 M
    2016 13.75M
    2017 13.75 M

    5 yrs 50 million.
    This should make both sides happy.

  • CubFan Paul

    People are missing the whole point of Theo&Co buying low now on an extension. any deal that covers 5-7yrs and pays Samardzija $6M-$11M annually is a steal and should be explored. kind of like locking up Castro for $8.5M a year.

    • Jade

      Don’t you think there is a lot more inherent risk to signing a guy who doesn’t even have full season of being a starter? A season were he looked great at times and other times there was talk of benching him or putting him back in the pen.
      Castro was 2 1/2 seasons in and made big strides defensively and is the premium position. If Castro ‘fails’ you still probably get a decent contact hitter/defender with speed at a good price barring a catastrophic injury. If Shark fails, which seems far more likely for a pitcher with no real track record and not even a full season under his belt, you might not have anything.
      Shark is way more of a risk and less of a proven commodity than Castro was/is when we signed him long term.

      • CubFan Paul

        all that said, he’s still arbitration eligible now & if his prime years can bought at below market the deal will get done.

        Its the way baseball works now, i didn’t start it.

  • Fastball

    If I’m Shark I ask high like I would in arbitration. Settle like I would before going to arbitration. If they want to extend me it’s for 5 years. My magical number is $45M. I take $20M over the next 5 years and $25M over the next 20. But the Cubs have to put that money in some kind of an Annuity on day 1 (maked it a fixed one so there is no guess work involved) and I get the interest on the investment. I don’t collect until after year 5 or at anytime after that of my choosing. Cubs get their investment in him off the books fast and can move forward with deals in coming years and Shark is set for life. If I’m him I don’t want all that money right now. But if they do a deal like that I sign and I have lots of flexibility on the $45M up or down. By the time he starts drawing on it he’s made another $5M to $10M from the investment (guessing). Then he’s 33 at the end of the contract and maybe barring injury does one last contract before retiring.

    • abe

      I’d do the same.

    • Norm

      Thanks but no thanks Jeff. We’ll give you 4 years $25M, take it or leave it.

  • Fastball

    Valbuena could be my utility infielder but he isn’t starting anywhere on my team.

  • Fastball

    I guess I come down on the player side of these negotiations. I take every nickle I can beat out of Theo and Jedd. If I’m Shark I sure do want to be a Cub for a longtime. But I am getting every last $$ I can get. I look out for me 1st and them somewhere down the line. It’s strictly business.

    • DarthHater

      Hey, Brett! Some robo-program is posting random baseball cliches again.