Revisiting The Chris Sale Extension

The Red Sox were as busy as any team during last spring’s extension flurry, inking a pair of star players to long-term deals that kept them out of the 2019-2020 free agent market.  One of the extensions was a six-year deal with Xander Bogaerts worth $120MM in guaranteed money, a contract that now looks like a pretty sound investment given how Bogaerts followed up a strong 2018 season with an even better 2019 campaign.

The other extension is already off to a rough start.  Chris Sale signed a five-year, $145MM pact covering the 2020-24 seasons, with a club/vesting option for the 2025 campaign worth at least $20MM.  After vastly outperforming his early-career extension with the White Sox (which ended up as a seven-year, $59MM deal once both option years were exercised), Sale now had a new deal that better reflected his status as one of the better pitchers over the last decade.

Exactly one year after that extension was signed, however, the deal looms as a significant misfire for the Red Sox on a couple of different levels.  The club announced on Thursday that Sale would be undergoing Tommy John surgery, which will keep him out of action for whatever becomes of the 2020 season and, in all likelihood, around half of the 2021 season.  The surgery comes on the heels of Sale being shut down last August due to elbow inflamation, and while a platelet-rich plasma injection and some months of rest looked to have the left-hander back on track earlier this winter, Sale was shut down again earlier this month after suffering a flexor strain.

In the short term, this means Boston loses its best pitcher for 2020.  It is a major blow to a rotation that was only okay in 2019, and already had lost David Price after the Sox traded the veteran southpaw and Mookie Betts to the Dodgers in February.  While Sale could conceivably get back to something close to his old form post-surgery and still pitch well over the rest of his contract, the Betts/Price trade plays a critical role in evaluating the big-picture impact of Sale’s extension.

As much as Red Sox ownership has tried to deny it, the luxury tax was clearly a major reason the team was willing to part ways with Betts and Price.  Between moving Betts’ $27.7MM salary and half of the $96MM remaining on Price’s deal, the Sox have gotten themselves under the $208MM Competitive Balance Tax threshold, with Roster Resource projecting a current tax number just shy of $196MM for the 2020 Red Sox.

After two seasons of tax overages, getting under the CBT limit in 2020 would save the Red Sox millions in future tax payments, and theoretically allow them to spend past the threshold again as early as 2021 with only a minimal “first-timer” penalty attached.  As many Boston fans angrily noted over the winter, of course, trading Betts was a pretty extreme measure to achieve these luxury tax savings, and it’s a measure that could have well been avoided had the Red Sox not spent so much money elsewhere….for instance, on Sale’s extension.

Due to deferred money and the structure of the extension, Sale’s contract has a luxury tax number of $25.6MM per season from 2020-24.  Boston’s overall luxury tax payroll stood at roughly $236.3MM at the start of November, so subtracting Sale’s salary would have dropped their figure to $210.7MM, already within shouting distance of the $208MM threshold.  From that point it would’ve been much easier for chief baseball officer Chaim Bloom to make few more cuts and duck under the $208MM line without having to move Betts or Price.

Sale isn’t the only problematic salary on Boston’s payroll, of course, as the four-year, $68MM free agent deal Nathan Eovaldi signed last offseason is also looking questionable after Eovaldi’s injury-plagued 2019.  That said, the Red Sox were far from the only team who thought Eovaldi turned a corner in his breakout 2018 campaign, and they had to outbid the market to re-sign him.

In Sale’s case, the Sox didn’t necessarily have to pursue that extension, particularly given that a few red flags were already apparent.  Sale lost some effectiveness down the stretch in the 2017 season, and had an even shakier ending to his 2018, as shoulder problems limited him to just 17 regular-season innings after July 27 of that year.  The Red Sox were as judicious as possible in spacing out Sale’s appearances during the postseason, when he posted a 4.11 ERA over 15 1/3 innings en route to Boston’s World Series championship.

While Sale had been a very durable pitcher for the bulk of his career, seemingly running out of steam in consecutive seasons should probably have been enough to give the Red Sox some pause before guaranteeing him $145MM through his age 31-35 seasons.  As The Boston Globe’s Peter Abraham recently noted, the Sox may have been motivated to keep Sale out of a lingering regret over the Jon Lester situation from 2014, when the team was perhaps too rigid in extension talks prior to Lester’s final season under contract, which led to Lester being dealt to the Athletics at midseason and then going on deliver several more fine years after signing with the Cubs.

Abraham argues that waiting until after Sale’s final season could have been the more prudent decision for the Sox, as they would have had the added information of Sale’s 2019 numbers.  While the elbow injury was the biggest concern, Sale’s 36% hard-hit ball rate was the highest of his career, and his average fastball velocity dropped by 1.5 mph (to 93.2) from his 2018 speed.  Sale’s 2019 season was the worst of his ten-year MLB career, though given his high standards, a “bad” Chris Sale season was still very solid — a 4.40 ERA, 5.89 K/BB rate, 13.3 K/9 over 147 1/3 innings, and a wealth of advanced metrics (3.39 FIP, 2.93 xFIP, 3.00 SIERA) hinting that Sale’s 4.40 ERA was the result of some bad luck, such as a 1.47 HR/9 that far surpassed his previous career high.

Would this platform year have been enough to make Sale a big player in free agency?  We saw multiple top arms score larger-than-expected contracts this winter, though none of Gerrit Cole, Stephen Strasburg, Madison Bumgarner and company had a mid-August shutdown hanging over their heads.  It’s probably safe to assume that Sale would have still landed a pretty sizable multi-year contract if he had been a free agent, though that also assumes he would have tested the market at all.  His elbow injury could have led to Sale accepting a one-year, $17.8MM qualifying offer to remain in Boston, in the hopes that he’d return to better health in 2020 and deliver a prime season that would lead to a bigger deal in the 2020-21 offseason.

Adding another wrinkle to the mix, perhaps the Red Sox don’t even issue Sale a QO in this scenario out of a concern that he might accept it.  Boston’s approach to payroll seemed to shift radically from the start of the 2019 season to the end, as president of baseball operations Dave Dombrowski was fired and eventually replaced with Bloom, who was under that rather clumsily-issued edict to trim salaries.  In the wake of Sale’s 2019 season, perhaps the Red Sox would’ve been comfortable just letting Sale walk entirely, thus removing one more contractual concern from their books.

A major-market team like the Sox can weather a big contract not working out, but the franchise’s self-imposed desire to avoid the luxury tax suddenly puts many of the big deals of the Dombrowski era (the Sale extension, plus the signings of Price, Eovaldi, and maybe even J.D. Martinez considering the sheer dollars involved) under the radar.  This being said, blaming Dombrowski for Boston’s financial situation is unfair, as these nine-figure deals aren’t happening without the green light from ownership.

Sale’s extension is a prime example of how no transaction exists in a vacuum, as every signing/extension/trade/release/etc. is itself a response to some other move, and also sets off a chain reaction of other moves.  As Abraham pointed out, who knows if Red Sox ownership makes such a move if they had acted differently with Lester all those years ago, or if maybe Sale (or Price, or Eovaldi, or even Dombrowski) ends up in Boston whatsoever if the Sox had still had Lester in their rotation.  Unfortunately for Sale and the Red Sox, the second-guessing over the extension will continue at least until the southpaw can finally get back on the mound.