My Thoughts on Tim Hudson’s Option

Ken Rosenthal reports that Tim Hudson will likely turn down his mutual option with the Braves.

Barring a last-minute, knockout offer from the Braves, right-hander Tim Hudson plans to become a free agent, according to major-league sources.

Hudson’s contract with the Braves includes a $12 million mutual option for 2010. If Hudson declined his end of the deal, he would be free to negotiate with any team.

Other than Angels right-hander John Lackey, the upcoming free-agent class is largely devoid of top-of-the-rotation starters.

Hudson, 34, fits that description when healthy, and he proved that he is recovered from Tommy John surgery by going 2-1 with a 3.61 ERA in seven starts after rejoining the Braves on Sept. 1.

The Braves are likely to exercise their option on Hudson, a decision that must be made within five days of the completion of the World Series.

Last month, I estimated Hudson’s market value, assuming that he is healthy.

Valuing Hudson is a bit difficult, because of his recent past performance. He pitched well in 2007, but his 2006 and 2008 seasons weren’t as good—the latter season was marred by injury. Let’s just assume that 2007 was Hudson’s true-talent level. Given aging and league salary growth, I project Hudson will be worth $11.25 million in 2010. The Braves having an above-average team pushes this value upward a bit, but slower-than-normal revenue growth would lower the value. In addition, injury recovery isn’t guaranteed, which makes him riskier than I have assumed in this analysis.

By the rosiest of scenarios, Hudson will be worth the option. Given the dearth of pitching already owned by the Braves, and the possibility of a weak free-agent market (Update: by weak, I mean talent will be cheaper than usual, not weak in talent), I suspect that the Braves will pass on Hudson’s option.

In summary, I don’t think Hudson can get more than $12 million/year on the free agent market. Maybe, this is posturing: leaked position by Hudson’s agent as a negotiating ploy. Or, if you’re going to be fired, quit first to save face. Most likely, I think Hudson would prefer a long-term deal with another team for less that $12 million a year, and the Braves aren’t willing to offer a favorable long-term deal. Therefore, he’s willing to trade a one-shot above-market deal for a long-run market-equivalent deal.

One thing that I do not think affects Hudson’s value is the available number of starting pitchers on the free agent market. While there are fewer players for teams to choose from (decreased supply), this also means there are fewer teams seeking starters (decreased demand).

One Response “My Thoughts on Tim Hudson’s Option”

  1. Rick says:

    With his injury history and his age, he’s got to be a NL only pitcher and whatever team he signs with probably wouldn’t be able to insure his contract. I think he should stay with the Braves for the 1 year at $12mm and if he does well he should be able to get a deal for 2-3 years. If he’s looking for a two year deal at around $16mm total good luck to him. If I were a GM, I’d have a challenging time explaining to an owner why I’d tie up that much money in an old pitcher who is more apt to be on the DL than the active roster.