Was the Wade Davis Extension a Bad Move by the Rays?

Just before the 2011 season, the Rays signed right-hander Wade Davis to a 4-year extension worth $9,534,100 with three team options that could extend the deal to 7 years and $34,534,100. At the time it looked like a typical Rays deal where they signed a promising young player long-term at an extremely team friendly rate.

In 2011, Davis slipped in his sophomore season in the big leagues, making 29 starts and throwing 184 innings, but going just 11-10 with a 4.45 ERA, a 5.1 K/9, a 3.1 BB/9, and a 1.1 HR/9, which amounts to a 4.83 FIP. In 2012, Davis is now in the bullpen and has done well thanks to an uptick in velocity on his fastball and his breaking stuff playing up, posting a 2.57 ERA in 10 appearances spanning 14 IP while posting an 8.4 K/9, a 2.6 BB/9, and a 0.6 HR/9, amounting to a 3.13 FIP. Davis has recorded holds in all four save situations in which he has pitched. But middle relievers are clearly less valuable to teams than starting pitchers. Now that Davis is a reliever, at least for the time being, is his extension still a good deal for the Rays?

The median salary for major league starting pitchers in 2012 is 3.18 million dollars. Davis won’t surpass that until 2014, elucidating why his contract was so team-friendly, but now he’s no longer a starter. The median salary for major league relievers in 2012 is $750,000. Davis will be under that threshold in 2012, making just $434,100, before jumping to a 1.5 million dollar salary in 2013 and up and up from there. How well will Davis have to be to earn his salary even if he remains in the bullpen?

Tons of players in baseball are overpaid or underpaid. But this is interesting. Here are several relievers who will make around 1.5 million dollars in 2012: Luke Gregerson (1.55 million), Sergio Romo (1.75 million), Aaron Crow (1.6 million), David Robertson (1.6 million), Tyler Clippard (1.65 million). If I give you that list out of context (and remove the salary figures) that could be the list of the best young setup men in the game today (although Robertson was just promoted to closer). Moving on to Davis’ 2.8 million dollar contract in 2013, that’s more than a couple of closers (Jim Johnson, Fernando Rodney, Sean Marshall), and usually the going rate for veteran setup men (e.g. Kerry Wood, Octavio Dotel, Jon Rauch, LaTroy Hawkins). The 4.8 millon dollars that Davis will make in 2014 is usually reserved for closers or elite relievers with the ability to close (Brandon League, Scott Downs, Aroldis Chapman, J.J. Putz). And other than Francisco Rodriguez and Rafael Soriano, every reliever who makes more than 7 million dollars is a closer. What does this tell us? Davis has some time, but in order to be worth the amount of money that the Rays are paying him, he has to be comes a great setup man and then a closer over the life of the contract. Davis probably has the ability to do that, but it’s anybody’s guess whether that will actually materialize. If Davis remains a starter, he’ll be worth the money the Rays will be paying him as long as he can become a dependable number three or number two starter, something within his grasp and not unrealistic. But if  he remains in the bullpen, he has to become elite.

Will the Wade Davis extension go down as a bad decision by the Rays? Only time will tell. Davis has the ability to be worth the millions the Rays will be paying him. But not only does he have to maintain his current level of play, but he also has to improve significantly, especially if he remains in the bullpen.