Two young pitchers signed big deals last year. The Nationals signed highly touted Stephen Strasburg to a deal that will pay $15.1 million between 2009 and 2012. The Reds signed Cuban defector Aroldis Chapman to a six year deal worth at least $30.25 million (if Chapman is arbitration-eligible after the 2012 or 2013 seasons, he can convert subsequent salary amounts into bonus and go through arbitration – a great deal for him).

The Reds are seriously considering bring Chapman to Cincinnati with them to start the season (although it has become increasingly likely that Chappy will also start the season in the minors). The Nationals are sending Strasburg to AA Harrisburg to start the season (not even AAA, but AA!). Does this mean that Chapman is better than Strasburg?

First of all, why is Strasburg being sent to AA instead of AAA? One reason is that Harrisburg’s average April temperatures (average high 61; average low 41) are a bit higher than those of Syracuse (high 56, low 35). Low temperatures can contribute to injuries.

The bigger question you may be asking is this – why send Strasburg to the minor leagues at all? Why not have him start the season with the Nationals?

As with many things in life, the short answer is easy: money.

Baseball players become eligible for free agency when they have accumulated 6.00 or more years of Major League service with a team. This is based on the number of days on the major league roster (or disabled list). You can accumulate six years of service in a six years span, or you can bounce up and down for twenty years and never reach this threshold.

There is one wrinkle to this – if you send a player to the minor for less than 20 days, he still gets credit for the entire season. Send him to the minors for 21 days, and he gets credit only for his actual time served.

If you aren’t grasping the significance yet, it’s this: if you can keep a guy’s service time at 5.9 years instead of 6.0 years, you delay his free agency by a year – saving quite a bit of money on the 7th year.

The point of having Strasburg start the season in the minors, then, is to delay his free agency eligibility until after the 2016 season.

A smaller issue is whether the Nationals can delay Strasburg’s arbitration eligibility. All players are eligible for binding salary arbitration after they have 3.00 or more years of service. Additionally, amongst players with more than 2 but less than 3 years of service, the top 17% (in terms of service time) are also eligible for arbitration. These players are referred to as “Super Twos”. The cutoff for Super Twos has historically been between 2 years, 128 days and 2 years, 140 days (but it’s a moving target, since it’s based on the current year’s group of players). In recent years, many teams attempt to game the system by giving a player slightly less than 128 days of service their rookie year, in an effort to have them fall short of Super Two status. If the Nationals can manage to do this, this would make Strasburg arbitration eligible after the 2013 season instead of after the 2012 season.

So, what does this all mean for Strasburg’s salary?

Note: Strasburg also got a $7.5 million signing bonus.

  • 2010: $2M (per contract)
  • 2011: $2.5M (per contract)
  • 2012: $3M (per contract)
  • 2013: If a Super Two, salary determined by arbitration. If not, the team can impose a salary (must be at least 80% of the previous year’s salary).
  • 2014: Salary determined by arbitration
  • 2015: Salary determined by arbitration
  • 2016: If Strasburg has six years of service, he becomes a free agent following the 2015 season. If he has less than six years of service, his salary is determined by arbitration.

At any point in this path, Strasburg and the Nationals can sign a new contract that would remove him from the arbitration process. This is quite likely, since arbitration can be quite adversarial and tends to hurt some feelings. However, if Strasburg’s arbitration year is pushed back to 2014 and his free agency pushed back until after the 2016 season, these years are worth less money, and this will be reflected in any long term contract offered by the Nationals.

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Kosmo is the founder of The Soap Boxers and writes on a variety of topics. Many of his short stories have been collected into Kindle books.

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