Royals make risky move with five-year, $70M contract for Ian Kennedy
Over the weekend, the world champion Royals added to their rotation, inking Ian Kennedy to a five-year, $70 million deal. As with the Giants' addition of Jeff Samardzija back in December, it's a heavy bet on a pitcher recovering his form with a change of scenery. But while this move is less expensive than Samardzija’s by $20 million over the life of the full deal, it shifts considerable risk to Kansas City in the form of an opt-out after the second year.
Once upon a time, Kennedy ranked among the game's most promising pitchers. A 2006 first-round pick out of the University of Southern California, he placed on prospect lists in the spring of '08 but found less success with the Yankees than fellow prospects Joba Chamberlain and Phil Hughes, who themselves had bumpy rides in pinstripes. Traded to the Diamondbacks in the December 2009 three-way deal that sent Curtis Granderson to New York and Max Scherzer to the Tigers, he sandwiched two solid seasons around an outstanding 2011, during which he went 21–4 with a 2.88 ERA and 8.0 strikeouts per nine in 222 innings—a performance that placed him fourth in the National League Cy Young voting. After being roughed up through the first 2/3rds of the 2013 season, he was dealt to the Padres on July 31 of that year, and since then, his performance has been underwhelming despite the move to the bigger, more pitcher-friendly ballpark.
Kennedy made 30 starts for the Padres in 2015, missing a couple of turns due to a stint on the disabled list in April due to a left hamstring strain suffered in his first start of the year. In 168 1/3 innings, he posted a 4.28 ERA and 4.51 FIP; the former translated to just an 85 ERA+ given Petco Park's run-suppressing nature. While his strikeout and walk rates were good (9.3 and 2.8 per nine, respectively), he served up 1.7 homers per nine, the highest rate in the majors among pitchers who qualified for the ERA title, and finished with -0.4 Wins Above Replacement (baseball-reference.com version); only three other starters who qualified were worse. Petco wasn't much help, as Kennedy allowed 19 of his 31 homers at home, at a rate of 2.0 per nine. Since his big 2011 season, he's posted a 4.19 ERA (85 ERA+), 4.06 FIP and 1.2 homers per nine, averaging 190 innings and 0.5 WAR per year and slipping below replacement level in two of four seasons.
To be fair, Kennedy's 17.2% rate of home runs per fly ball was high enough to write off as a fluke. It's much higher than his career mark of 10.7%, and the only qualifier higher was teammate James Shields (17.6). Using FanGraphs' xFIP, which plugs in a league-average HR/FB rate for a pitcher's home-run rate, his 3.70 mark was 5% better than league average, suggesting that he could rebound, particularly with a change of scenery. In fact, the Royals' Kauffman Stadium is one of the majors' most notoriously homer-suppressing parks: In 2015, it played host to just 130 homers, more than just four of the 30 parks and 36 fewer than Petco. Over the past three years—the period since the Padres moved their fences in—357 homers have been hit in Kauffman, the majors' fifth-lowest total, and 413 homers have gone out in Petco, good for eighth-lowest.
That's one thing the Royals are banking upon. Another is better outfield defense. With leftfielder Alex Gordon re-signed via a four-year, $72 million deal, Alex Rios gone in favor of a Jarrod Dyson/Paulo Orlando platoon in rightfield and with Lorenzo Cain still in center, Kansas City has upgraded an outfield that in 2015 tied for third in the majors in Defensive Runs Saved (+32) and ranked second in Ultimate Zone Rating (+36). By comparison, the Padres—whose centerfielders combined for -11 DRS and -7 UZR, with the dreadful Matt Kemp (-15 DRS/-17 UZR) in right—ranked 25th in DRS (-18) and 28th in UZR (-24). Over the past two years, the Royals have had the better outfield by a gap of 81 runs via DRS and 115 runs according to UZR.
Beyond that, the Royals are hoping for positive results by reuniting Kennedy with pitching coach Dave Eiland. The two crossed paths at Triple A Scranton/Wilkes-Barre in 2007 and then in New York in '08–09, albeit for only a total of 75 1/3 innings over that span (not including spring training). Eiland's main focus will likely be improving Kennedy's fastballs. Via Brooks Baseball, the righthander's four-seamer has averaged over 92 mph in each of the past two seasons—faster than at any other point in his career—but lacks movement, getting whacked for 21 homers and a .528 slugging percentage last year. The addition of a two-seam fastball—which would allow him to generate ground balls and ideally reduce his home-run rate—would appear to be a good place to start.
With regards to the Royals' rotation, the bar for Kennedy is set rather low. With Edinson Volquez, Yordano Ventura, Danny Duffy and Chris Young returning and Kris Medlen waiting in the wings, Kennedy is essentially replacing a Jeremy Guthrie/Johnny Cueto combination. Guthrie, who was bumped from the rotation in mid-August a few weeks after Cueto's arrival, was torched for a 5.95 ERA and 5.61 FIP in 148 1/3 innings. Cueto, meanwhile, managed just a 4.76 ERA and 4.06 FIP in 81 1/3 innings, though he did have some big moments in the postseason. Kansas City obviously believes that a durable pitcher who can take the ball every fifth day and manage a league-average performance should be enough—particularly with the support of the team's offense, defense and bullpen.
Still, $70 million is no small amount of money. At a cost of $6.5 million per win in 2015 dollars and using a retrofitted What's He Really Worth calculation (à la Samardzija, who’s the same age) that includes a 5.4% rate of inflation and a gentle decline of 0.4 WAR per year, you get a return on Kennedy that looks something like this:
You can tweak the assumptions slightly, with a more standard decline (0.5 WAR per year) that starts from a higher spot (2.9 WAR) en route to the same place, but the problem, again, is that Kennedy hasn't been worth more than 1.4 WAR in a season since 2012. And that's not the only issue. We don't know the annual salary breakdown yet, but assuming it's a flat $14 million per year, a break-even return would equate to 4.0 WAR over the first two seasons—something Kennedy hasn't managed since 2011–12. The odds are that if he gets hurt or otherwise falls short of an impact along those lines, he won't exercise the opt out, making it all the more difficult for the Royals to recoup that return.
Either way, those calculations ignore the impact of the Royals losing a first-round draft pick, because the Padres gave Kennedy a qualifying offer. For picks in the 26–30 range, a May 2014 study by The Hardball Times' Matthew Murphy estimated a value of $16.6 million for players chosen in that span. Even if it's slightly lower despite industry-wide inflation in the wake of all the new television money, a $15 million valuation on that pick would require the Royals to recoup $43 million worth of performance over two years (around 6.0 WAR) or $85 million over five (around 11.5 WAR) for this to be a break-even move. That’s for a pitcher who has been worth 6.7 WAR over the past half-decade.
That's not a bet I'd take—not with a mid-market payroll even while basking in the glow of a franchise's first championship in 30 years—simply because so much has to go right for it to pan out. Then again, I'm so low on Kennedy that I didn't foresee the Padres' qualifying offer back in August, when the Padres pulled him back from waivers, and didn't think he'd do much better than an inflation-adjusted equivalent of the three-year, $24 million deal that Hughes got from the Twins after the 2013 season, on the heels of his second ERA above 5.00 in three years. Aided by what must have been one hell of a sales job by agent Scott Boras, the Royals value Kennedy more highly than I (or many others) anticipated. It only takes one team.