Luis Severino agrees to extension, takes security in uncertain market

We’ve been pining for more than a year for the Yankees to secure their future and extend their young stars. We’re also deep in discussions about how baseball can move more money from older players to younger ones. Today, the team did just that, agreeing on an extension with ace Luis Severino, for four years and $40 million, with an option for a fifth season that would bring total compensation to $52 million.

This is a really good deal for both sides. For Severino, most of these years are arbitration seasons. If the option is exercised, he’ll lose his first season of free agency, and would likely make more than $12 million on the open market. In 2019, however, he’ll make $6 million, more than his arbitration award would have been. He’ll also avoid what is always a highly contentious process with the team, and go into spring training with the confidence the Yankees want him around for the next little while.

In a lot of ways this deal is similar to the one Aaron Nola signed earlier this week, and it wouldn’t surprise me if both sides used the Nola framework to reach a conclusion. Nola did get a little more money, but that probably reflects his greater floor and consistency over the past two seasons, even if Severino has been roughly two wins more valuable in total. Despite his uneven 2018, the Yankees right-hander was better by fWAR, so you could make an argument he should have been paid more. Overall, though, I’m fine with the deal.

The last positive for Severino is this doesn’t cancel out a big free agent deal sometime in the future. As a Super Two player, he’ll have four seasons of arbitration, not three. This contract, even with the option extended, will only buy up one year of free agency. You could quibble with that and say the Yankees could have offered six or seven years and really bought up all of his prime, but I can’t imagine Severino’s unhappy with this arrangement. He’s guaranteed a healthy chunk of money and will be young enough to enter the market again without too much delay from the extension.

For the Yankees, the upside of the deal is obvious. They get the linchpin of the rotation on a pretty friendly deal, and one that’s likely to be incredibly valuable going forward. Again, even with his bad second half, Severino was worth between four-and-a-half to six wins, depending on which WAR you prefer. He’s ridiculously good and now owns one of the more valuable contracts in baseball.

There’s also a possible ripple affect here. Other Yankees may see that the team is willing to negotiate in good faith and pony up the money to keep their stars around. This should signal to Aaron Judge and Gary Sanchez, for example, that the Yankees might be more open to discussing their long-term futures than we previously thought. Nothing signals a desire to invest in your young talent like inking one key player to a win-win deal.

I want to stress that this is not a free agent contract, and shouldn’t be evaluated as such. It’s pretty in line with what extensions other guys are signing. Chris Sale’s extension was five-years for $32 million plus two options; Jose Quintana’s was five years for $26 million with options; Carlos Martinez signed up for $51 million over five years; and of course there’s Nola’s deal. Severino fits pretty well smack dab in the middle, and while you could argue he settled for a little light, this isn’t terribly off base from what the market pays for pitchers’ arbitration years.

And of course, as Kunj mentioned in the Pinstripe Alley headquarters, it’s probably worth settling a little light to avoid having to be in a meeting with Randy Levine.