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So much for yesterday’s report by Buster Olney that Tim Lincecum and the Giants are “not close” to coming to terms: The two sides agreed Friday to a two-year deal worth $23 million.
The contract means the Giants avoid arbitration, where Lincecum was expected to seek a record $13 million.
Read more about this and the Giants at SB Nation’s McCovey Chronicles.
This morning, reports surfaced that the Giants offered ace Tim Lincecum a three-year contract worth $37m. Lincecum's side made a counter offer in excess of $40m, but in case you were thinking that meant they weren't far from an agreement, Buster Olney's sources are here to tell you that, no, they are.
The newspaper reported that Lincecum's camp responded with an offer worth more than $40 million.
However, baseball sources told Olney that as of noon ET Thursday, the two sides were not close to a deal.
This isn't much of a surprise, given the $5m disparity between their respective arbitration proposals, but with the arbitration hearing scheduled for tomorrow, it does paint a dire picture of the state of negotiations. It's beginning to look highly likely that this will advance to the arbitration stage, and while arbitration isn't the end of the world, having a team representative argue in front of a judge that a player isn't worth what he wants can do a number on the player-organization relationship. Several general managers pride themselves on never letting players get to arbitration, as the hearings can be negative and contentious.
Heard this: The Giants might wind up sending as few as one member of their front office to the Lincecum hearing. The heavy lifting...on management's side of the case will be done by MLB, and not the Giants.
This has the potential to turn into a real messy situation, between the Giants and Lincecum, and between MLB and the union.
With a much-anticipated arbitration hearing scheduled for tomorrow, Tim Lincecum and the Giants continue to talk contract. The latest, from John Shea:
A major-league source said the Giants have made a three-year, $37 million offer with annual salaries of $9.5 million, $12.5 million and $15 million, and that the Lincecum camp countered with a proposal north of $40 million.
It may seem that the sides aren't all that far apart, but with one day left before the hearing, the Giants are running out of time to make content their star player.
Tim Lincecum is what's known as a "super two" player. Among all players with more than two but fewer than three years of Major League service time accumulated, the top 17% in total service qualify as super twos. These players then become eligible for four years of arbitration, rather than the standard three. Lincecum is still under club control through 2013, but because of his eligibility, he is in line to make more money sooner.
The proposed three-year deal would buy out Lincecum's next three years of arbitration. Given that the Giants have submitted an $8m figure for tomorrow's arbitration hearing against Lincecum's $13m, we can see why the two sides have yet to reach an agreement - when you're that far off in the first year, the gap will only grow as you include another two. Because there's no guarantee of sustained health or performance, we would expect Lincecum to compromise a little bit when considering future salaries, but that reported offer from the Giants would pay Lincecum less in 2011 than he's seeking in 2010, so it's understandable why it's been turned down. Any counter offer from the player's side likely begins with an eight-figure 2010 salary.
Lincecum has arguably been the National League's top pitcher two years in a row. While arbitration-year salaries escalate - the same player will make more in his second arbitration year than in his first, and so on - a $13m proposal is not unreasonable for a player in Lincecum's position. For historical reference, Ryan Howard holds the record for super two arbitration salary at $10m, which he earned in 2008. He then signed an extension guaranteeing $15m and $19m in his next two years. While the market has collapsed a little bit since then, Lincecum is also far and away the more valuable player of the two. A healthy Lincecum deserves to make more over the next three years than the $37m the Giants have offered, and while players will sometimes make concessions in getting themselves some security and comfort, one wonders how much Lincecum would be willing to concede now that things have gotten this far.
Read a discussion on the matter at Giants blog McCovey Chronicles.
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Giants Fans Happy With New Lincecum Contract
It came down to the last minute this morning, but Tim Lincecum and the Giants finally agreed on a two-year deal worth $23m that will keep the sides from having to go to arbitration each of the next two seasons. And this news has made Giants fans both pleased and relieved, as the Lincecum/arbitration story was a dark cloud over their entire offseason.
Jon Heyman at SI has contract details:
In the end, the two sides compromised - the Giants offered a two-year deal worth $21m, Lincecum's side countered with a two-year deal worth $25m, and the final $23m figure is right in the middle. The incentives are attainable, but not as significant as the base salary and bonus, which won't give Lincecum what he was seeking in arbitration, but will still reward him handsomely. A $5m raise in 2011 is roughly what one would expect from the arbitration process, and though Lincecum might've been able to make more next year given another stellar and healthy season, signing now gives him some security, which always carries a cost.
Perhaps the most amazing part of this whole saga comes up in a Heyman Tweet:
It doesn't get any closer than that.
So, Lincecum is under contract for two years and under club control for four. The specter of arbitration in 2012 and 2013 looms, but this deal gives both sides plenty of time to hammer out a long-term extension, a concept to which both Lincecum and the Giants appear open.
Feb 12 2:01p by Jeff Sullivan - 0 comments