Joel Sherman reviews Luis Severino‘s deal with the Yankees. The four-year contract meant the starter avoided arbitration. It also gave him some insurance on himself:

He comes from humble means. As recently as 2016, he was banished first to the minors, then to the bullpen. A few months ago he stumbled down the stretch and playoffs amid a blitz of concern about tipping pitches, the quality of his third pitch and physical endurance. No qualified starter last year threw his fastball with greater average velocity and few threw their sliders as hard or frequently as did the righty.

Severino could have played the upside risk against considerations from his background and potential for health issues. By just being good and healthy (not even great) the next four years, Severino could have outperformed the $40 million guarantee and reached free agency a year earlier. The downside was losing arbitration ($4.4 million) and getting injured to the point where he got no raise in 2020 — so about $8.8 million over the next two years with mystery beyond that.

Severino elected a guarantee of generational wealth rather than gambling year to year on himself to exceed that threshold while perhaps helping set new financial benchmarks for players. 

NYPost.com

An interesting feature of the deal is that it is front loaded:

The deal includes an interesting twist. The money is front-loaded more than usual as protection against a potential work stoppage, according to sources.

Severino will make $4 million with a $2 million signing bonus in 2019, $10 million in 2020, $10.25 million in 2021 and $11 million in 2022, the season after which the current collective bargaining agreement expires. A $15 million club option for 2023 includes a $2.75 million buyout.

ESPN.com

Usually the money in the first few seasons of these contracts is in line with what the player would have received in arbitration. A dollar today tends to be worth more than a dollar tomorrow, due to inflation, so getting the money earlier means investments have more time to allow compound interest to work its magic.

It’s another good deal for a player, but a poor deal for players overall.