Getting ahead of the market with an Ivan Nova extension

When it comes to building the roster and making moves, the Yankees tend to be very reactionary. That is out of necessity more than anything; it’s tough to implement a plan when your farm system has been as unproductive as the team’s has been these last few years. The Yankees rely on free agency to fill holes and they pay premium prices not because they can, but because they have to.

A few weeks ago I wrote about a potential contract extension for David Robertson, which might have given the team a closer at a setup man price, but that ship seems to have sailed. Robertson avoided arbitration with a one-year contract a few weeks ago and he’ll become a free agent next winter looking for that closer contract. Another The only other player on the roster who would be worth considering an extension for is Ivan Nova, the just turned 27-year-old right-hander who figures to slot in as the number four starter come Opening Day.

There is no real reason for the Yankees to have any urgency when it comes to locking Nova up right now. The two sides avoided arbitration with a one-year contract worth $3.3M a few weeks ago, so he’s signed for this coming season and remains under team control as an arbitration-eligible player for another two years after that. Nova won’t be eligible for free agency until after the 2016 season, and, as everyone learned the hard way with Chien-Ming Wang, a pitcher’s career could go south in an instant no matter how promising he seems. There is risk anytime you sign a player long-term and that is especially true with pitchers.

As MLBTR’s Extensions Tracker shows, most starting pitchers at Nova’s service time level who signed extensions only signed for two years. All those contracts did was give the player a small amount of security and the team cost certainty. Those pitchers were still arbitration-eligible one last time after the extension expired and their free agency was not pushed back. That type of contract would make no sense for the Yankees since Nova is already signed for 2014 and they can afford whatever raise he’ll get for 2015. Signing Nova would be about keeping him beyond his arbitration years and (hopefully) saving some money in the process.

The only four pitchers at Nova’s service time level to sign extensions of at least three guaranteed years in the not too distant past are:

Maholm is the best comparable to Nova, at least in terms of bWAR and fWAR, but the Yankees can forget all about paying him only $14.5M for his three arbitration years. They’re already paying him $3.3M for his first year, meaning Ivan would have to agree to a $5.6M average annual salary for his second and third years. That would be a huge discount. Maholm signed that extension prior to the 2009 season, so it’s pretty outdated. Same goes for the Kazmir deal too.

Santana and Cueto signed away their three arbitration years for $17.8M and $16.2M, respectively, which averages out to $17M even. Nova’s salary would have to jump to roughly $5.7M in 2015 and $8.1M in 2016 ($2.4M raise each year) to match that, which is pretty reasonable. John Danks went from $3.45M to $6M to $8M during his three arbitration years while Matt Garza went from $3.35M to $5.95M to $9.5M during his three arb years, just for comparison. The Santana/Cueto extension framework seems to work for Nova.

Now, would Nova take a four year deal in the $27-30M range (plus an option!)? Who knows. His bonus was only $80k when he signed out of the Dominican Republic, so he doesn’t have that huge seven-figure bonus tucked away somewhere. He might jump at the security. Nova has been pretty erratic these last few years and the Yankees might not like the idea of risking that much money on a pitcher who is still something of an unknown. That said, look at some recent extensions signed by pitchers who were two years away from free agency:

Morrow isn’t a good reference point because he started his career in the bullpen and had only two years as a starter by time he accrued four full years of service time. Harrison’s deal and Johnson’s deal average $10.4M annually while Santana’s and Cueto’s deals average $7.1M annually. If the Yankees wait a year to extend Nova and he goes on to have a pretty good (not even great) 2014 season, locking him up will be substantially more expensive, about $3M per year more expensive. The sooner they get it done, the more they save, and that’s just smart business regardless of whether the team has a $50M payroll or a $200M payroll.

The Yankees have softened on their archaic no extensions policy in recent years, most notably by trying to lock up Russell Martin, Robinson Cano, and Hiroki Kuroda. The problem with those three was that the team waited until they were only one year away from free agency, and when a guy can see the light at the end of the free agent tunnel, it’s tough to talk him out of exploring the open market. I understand why the Yankees would be hesitant to sign Nova long-term, but doing it now could potentially save a ton of money and allow them to get out ahead of the market for once.