2011 Reds

Reds sign Johnny Cueto for 4 years/$27 million

I love this:

The Reds and right-handed pitcher Johnny Cueto have agreed to a four-year contract extension worth $27MM, tweets Enrique Rojas of espndeportes.com.

Cueto was arbitration-eligible, and he and the Reds were about $900,000 apart on their submitted salary figures, per our Arbitration Tracker. The right-hander was seeking $3.9MM, while Cincinnati offered $3MM.

This buys out all of Cueto’s arbitration years, and one year of potential free agency. The kid is still 24 years old, and he put up a 110 ERA+ last year (12-7, 3.64 ERA), while demonstrating a new, mature focus on conditioning. Young pitchers with this talent don’t grow on trees.

Kudos to GM Walt Jocketty and the Reds. Nice signing.

10 thoughts on “Reds sign Johnny Cueto for 4 years/$27 million

  1. Love it! By the time it runs out, they should have enough payroll shredded to be able to pony up big bucks if he continues to improve. This year+ has been a good time to be a Reds fan.

  2. Per Fay, Jocketty says it is close but not yet a done deal. Sounds like they are still trying to figure out how to be creative in parcelling out the money to lessen the annual hit. If MLB ever puts in a salary cap, the Reds should certainly be prepared with the way they bend and twist these deals every which way but loose already.

  3. I’ll be real curious to see how this deal’s structured, but it’s very exciting to see them locking in their best young players to cost-certain deals for the next several years. Good times, indeed.

  4. I love Cueto. And I like this deal. According to fangraphs, Cueto was almost a 3 win player last year, which eclipses the $10M mark in value, at age 24. I think the chances are very good that this deal is well worth it.

    However, I hate to say it, but I’m a little surprised it had to be this high. Yes Cueto’s FA value could very well be much higher than $27M over the next 4 years, but of course he isn’t a FA.

    Just to be extra conservative (and make the numbers easy), let’s say Cueto got 4M in arbitration for next year. Using a typical 40-60-80 distribution for arb years, he could have expected something like 6M and 8M for the final two years, assuming similar or slightly improved performance. That means the Reds paid 9M for his first year of free agency. To me, that seems a little high for a deal of this nature, considering it’s 4 years down the road and there’s always risk in signing pitchers long term.

    Sorry I don’t mean to be a negative nancy on this exciting topic. Overall I love it and I love that we are being proactive with our promising young players.

    • According to fangraphs, Cueto was almost a 3 win player last year, which eclipses the $10M mark in value, at age 24. I think the chances are very good that this deal is well worth it.

      As Aaron writes, a quick-and-dirty way of estimating this type of contract is a 40-60-80% assumption of the arb years. So if you figure that Cueto’s a $10M value player, the correct value of this deal is $28M. If Cueto improves whatsoever, it’s a good deal for the Reds. If he stays at the same level, it’s pretty much a wash (though committing to pay “true value” is probably a small failure).

      FWIW, FanGraphs had Cueto as being worth $11.3M last year, and projects $14.5 next. I’m sure that’s the thinking on Pete Rose Way, as well.

  5. Put me in the camp of liking it. If Cueto has a “big” year in any of next years, Reds saved them some money, plus skips having to worry about arbitration cases. I just hope its less back-loaded than other deals have been.

    Go 2011 Reds!

  6. Reading the comments section in that article is pretty funny. There are some stupid Cardinal fans out there.

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