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What would a Sonny Gray extension look like?

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Billy Beane backed away from previous comments that suggested a Sonny Gray extension might be on the horizon. But what does an extension buy the Oakland Athletics, anyway?

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As Christmas approaches, visions of Sonny Gray extensions dance through our heads. Oakland Athletics paramount baseball operations leader Billy Beane was said to be exploring such an extension at the end of the 2015 season. Renewed discussion of an extension came about when the San Francisco Chronicle asked major league executives about extending Gray at the Winter Meetings, and those executives thought a deal in the $52-65 million range sounded right for signing Gray through 2021, the first two years of his free agency.

Asked about the possibility of an extension, Gray told the Chronicle, "I've talked about it with my agent, and I'd definitely be comfortable staying there. And if I don't, there's nothing wrong with that, either. If I get to the point where I'm in that position, it's kind of a win-win situation."

Contrast that to how Beane responded the next day to CSN California, "Even if we're right, it may not be the right thing to do based on the percentage of payroll the player would be taking up. And if you're wrong, you're in big trouble. It's kind of almost a lose-lose situation." While a less than popular way of putting it, Beane is right. You're asking the club to predict how healthy Gray will be over the next six years, and even if he is completely healthy you're still betting on how well he will perform in that span. A lot can change over six years, and the A's would be asked to make the biggest bet right now on years where the club has the least information.

On the injury front, Susan Slusser notes, "It's tough to get insurance on starting pitcher contracts longer than three years, and the A's would want to do a contract that would go through at least a year or two of free agency." And insurance isn't cheap, it can cost up to 10 percent of a contract's annual value and it still has a deductible.

And look, a contract extension is hardly a guarantee against Oakland trading a player. Just look at Trevor Cahill. A year after signing an extension that with club options could have kept him with the A's through 2017, he was instead traded to the Arizona Diamondbacks a year later, and pitched so poorly as to earn a demotion to the minor leagues in 2014. I can't even predict whether Gray will be on the A's roster in 2017 at this point, much less worry about how much to pay him in 2020 and 2021.

We're talking about extending control over potentially Sonny Gray's best seasons for a couple of extra years, if the A's hang on to him, or make him that much valuable if he's traded away. If the A's continue to go year-to-year in arbitration, there are a range of ways this could go for Sonny Gray and the A's:

Pre-arb Arbitration Free agency
Year 2016 2017 2018 2019 TOTAL FA 2020 2021
Age 26 27 28 29 Signs 30 31
Sonny Gray the based god
(Greinke money)
$0.5 $5 $11 $17 $33.5 7/$245 $35 $35
Sonny Gray the pretty good
(Zimmermann money)
$0.5 $5 $9 $13 $27.5 5/$125 $25 $25
Sonny Gray the suddenly not that good
(Fister money)
$0.5 $4 $6 $8 $18.5 2/$24 $12 $12
Sonny Gray the 2019 Dr. James Andrews patient $0.5 $5 $11 $17 $33.5 year off TJS $5
Sonny Gray the 2018 Dr. James Andrews patient $0.5 $5 $11 TJS $16.5 1/$5 $5
Sonny Gray the 2017 Dr. James Andrews patient $0.5 $5 $5 $5 $15.5 2/$20 $10 $10
Sonny Gray the 2016 Dr. James Andrews patient $0.5 $3 $4 $7 $14.5 2/$20 $10 $10

The first three scenarios involve Gray being pretty healthy until he reaches free agency and playing at varying levels of skill for the remainder of his arbitration years. The last four consider some sort of catastrophic injury that knocks Sonny Gray out of baseball for 18 months.

It takes two to contract. The impetus for Gray to agree to buyout two of his extension years is the risk of the poor player or catastrophic injury outcomes. The impetus for the A's to do so is to try to get two extra years of an ace pitcher below cost and for only his prime years at the risk that injury or a performance drop diminishes the surplus value of the deal.

At the top end, the A's will try to save on the potentially $100-$120 million in what Gray would be paid through 2021 if he were to reach a free agency an injury-free top-tier pitcher at the David Price or Zack Greinke level of money. At the bottom end, Gray will try to buy security against the worst case injury scenario where Gray only earns $15-20 million. A midpoint deal would come in around $60-70 million through the 2021 season.

What could affect the calculus for Gray to consider an extension is that Gray is less of a risk for a catastrophic elbow or shoulder injury because he does not have even a minor issue with those body parts in his career history. Gray could suddenly lose a few miles an hour off his pitches but so long as he throws 200 innings every season, he'll still get a decent contract to secure himself and his family for the rest of their lives. If Gray assesses his injury risk as practically zero, then he might set his realistic worst case scenario at $30-$40 million through 2021 instead. A midpoint deal would be around $65-80 million through 2021, in that case.

Those figures sound great, but remember that the A's have Gray under team control from anywhere between $5 to $9 million average annual value through 2019 anyway. An extension really only saves on those two extra years.

Where the A's and Gray are willing to go on an extension depends on the level of risk each side is comfortable with. Beane sounded very uncomfortable taking a risk projecting how good or healthy Sonny Gray will be in 2020 and 2021 while Gray sounded equanimous about the whole thing. If the A's and Gray work out a deal this offseason or by midseason, that would be great. But it's neither a bad nor a good thing if it doesn't happen right now.