Does a Travis Wood extension make sense right now?

Does a Travis Wood extension make sense right now?

The hope of trade season is built largely around the new faces added to a disappointing roster.  The addition of new talent to the organization is the sexiest part of this time of year, but often the over looked aspect of who you don’t trade is just as important.  The Cubs have a bunch of starting pitchers that could net them an attractive haul of prospects.  The question most are asking is whether or not to keep Matt Garza?  Most agree that Jeff Samardzija should be given an extension.  Samardzija has firmly placed himself in that core group of guys the front office has identified in Starlin Castro and Anthony Rizzo, but the problem is that Jeff Samardzija realizes he will make a lot more money by waiting to sign an extension.

Travis Wood has not been talked about much in terms of locking up, but he has been perhaps the most consistent starter on the Cubs with his quality start streak.  The other numbers are stellar with a sub 3 ERA in 98 innings pitched.  Travis Wood is poised to receive a healthy raise in his first year of arbitration.  The Cubs could be in a solid position right now to buy out Travis Wood’s arbitration years with a couple of team friendly club options in his first couple years of free agency.  This deal could cover Wood’s peak seasons from age 27 to 31.

Answering the titular question will require answers to two separate questions.  What is a reasonable amount for a Travis Wood extension?  Will what Travis Wood is likely to produce during that contract provide enough value for the Cubs?

The question of what a reasonable amount for a Travis Wood extension is difficult.  The biggest reason is that it is very difficult to find a recent comparison to Travis Wood.  Wood is having an amazing season to date, but his career numbers are vastly different than this season’s.  Even with the outstanding start to the season, Travis Wood’s career ERA is just a shade under 4.  And more importantly Travis Wood has never thrown more than 156 innings in a season.  The reason these comparisons are so important is because the biggest factors affecting arbitration is the salary from the previous season and what similar players have received.

The best comparison I found was Washington Nationals lefty Ross Detwiler.  Detwiler did not have as impressive a season heading into arbitration that Travis Wood has had so far, but he had a better track record overall.  Either way I think the $2.35 million he received is likely to be the ballpark for Travis Wood in year 1 of arbitration.  The Nationals’ Jordan Zimmerman presents the upper range of a second year arbitration award.  Zimmerman, with numbers closer to Wood’s 2013 campaign throughout his entire career, went from $2.3 million to $5.35 million.  Jason Hammel is the low end of what Travis Wood should expect with production closer to his career averages.  Jason Hammel went through his arbitration years receiving $3 million, $4.75 million, and finally $6.75 million.  The $3 million is higher because Hammel was a super 2 candidate and thus had a salary of 1.9 million heading into his second year of arbitration.  I think a rough estimate of $2.4 million, $5 million, and $8 million is what could be expected if Wood continued to produce at the level he is now.  On the other hand, if his production reverts closer to his career averages then the salary might be closer to $2.3 million, $4.5 million, and $6.7 million.  Wood, if healthy, can reasonably expect to make at least $14 million over the next three seasons.

It is even harder to find an accurate comparison for extensions for LHP.  The last two extensions for left handers buying out arbitration years were for Chris Sale and Madison Bumgarner.  The problems with using these deals are obvious since Travis Wood isn’t nearly the same level of pitcher Sale and Bumgarner are or were at the time of signing the deal.  The other problem is that their deals bought out a year of pre-arbitration salary.  That leverage lowers the value of the deal in favor of the parent club.  I think both deals will be at least slightly informative for what the arbitration years of a Travis Wood extension should look like.  Bumgarner will be paid through arbitration $3.75 million, $6.75 million and $9.75 million.  Sale’s contract has a simlar structure with $3.5 million, $6 million, and $9.75 million.  Both Sale’s and Bumgarner’s contracts bought out a year of free agency at around $12 million and included a couple of club options in the same range.  Chris Sale’s deal pays him $19.25 million which is well above the estimated amount for Travis Wood by going year to year.

I think Matt Moore‘s deal might be a little bit more informative.  Again Moore is a pitcher with a much better track record, but he signed his deal virtually upon call up.  He got paid $1 million a year during pre-arbitration years which is significantly more than Travis Wood has earned.  However, Moore’s arbitration years are $3 million, $5 million, and $7 million.  I think that is the structure of a Travis Wood extension that would be fair for both sides at this point.  The incentive for the Cubs to make such a deal would be a couple of club options at around $10 million a year.  That would make the maximum deal worth 5 years and $35 million dollars.

The second question is whether Travis Wood is going to be worth $35 million over the next five years.  Travis Wood with a sub 3 ERA is certainly worth that kind of money, but is this level of production really sustainable for Travis Wood?  The answer is unfortunately no.  A number of the “luck” indicators point towards regression.  Wood’s BABIP is a ridiculously low .222 right now and more concerning is high HR/FB% which is at 5.7%.  All of these numbers are why his FIP and xFIP are significantly higher than his 2.98 ERA at 3.52 and 4.35.

Travis Wood, though, has improved signficantly as a pitcher this season.  His BB% has dropped by nearly a full percentage point from last season.  Also his strikeout rate has dropped slightly from last year, but there is reason to believe that he could get more strikeouts with an increase in first strike percentage and swinging strike percentage this season to career bests.  Travis Wood’s SIERA has improved since 2011 dropping from 4.55, 4.41, 4.37.  I think it is safe to predict that Travis Wood will be about a 4 ERA pitcher through his peak seasons with what we have seen from him to this point.

So what is that pitcher worth?  According to Fangraphs Travis Wood has already been worth $25.5 million dollars in 462 IP with a 3.98 ERA.  Lets assume Travis Wood will earn dollars at the same rate during his peak seasons as he has and that he averages 180 IP over the course of his deal.  That pitcher would be worth $49 million dollars on the open market.  That is a substantial savings gained through a savvy extension given at this point of leverage.

Look at this from another angle, and the cost that it would take to replace a Travis Wood type starter on the open market.  Edwin Jackson just received $11 million per year for 4 years (plus the $8 million signing bonus).  Jackson is more volatile and has perhaps greater upside than Travis Wood does.  But the Cubs paid essentially $13 million a year for an innings-eating back end of the rotation type last offseason.  The Cubs with this deal would get a savings of $6 million and some protection in the form of a club option.  The Cubs could also have the 4-5 starters locked up at a reasonable rate for a competitive team.  Add Jeff Samardzija to the mix and all this team needs on the starting pitcher front is two more front of the rotation types to have one facet of a contending team complete.

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