Is Stephen Strasburg a $50 Million Bargain?


I nearly vomited on my keyboard when I wrote the title to this entry.  The country is in economic turmoil with unemployment rates soaring and the value of the dollar sinking and I have the nerve to call a 50 million dollar payout to a 21 year old a bargain?  It’s ridiculous.  At least until you start to look into it a bit further.  Before I go into explaining myself, let’s take a look at Stephen Strasburg and what he’s done.

Stephen Strasburg is widely considered to be the greatest college baseball pitcher of all time.  That’s a pretty lofty assessment but the numbers back it up.  As a freshman at San Diego State, Strasburg was limited to a relief role but managed to turn in a second team all Mountain West performance.  He recorded seven saves and held opposing hitters to a .141 batting average.  In 2008, Strasburg was moved to the starting rotation and burst onto the national scene when he struck out 23 batters in a game against Utah on April 11th of that year.  He finished the year with an 8-3 record and an impressive 133 to 18 K/BB ratio.  He rode this success to being named the only collegiate pitcher to play on Team USA for the 2008 Olympic Games in Beijing.  As an Olympian, Strasburg went 1-1 with a 1.67 ERA en route to a Bronze medal.  As if he hadn’t already done enough, Strasburg turned in one of the most impressive season ever for a college pitcher in 2009.  He went 13-1 with a 1.32 ERA and an amazing 195 strikeouts in only 105 innings pitched.  He certainly saved his best for last though, throwing his first career no-hitter and striking out 17 batters in a win against Air Force on his final home start.  Strasburg manages to do this well thanks in part to his near 100 MPH fastball that he is able to throw consistently and accurately throughout the duration of the game.  He pairs this with a knee bending curve that hovers around 80 MPH.  Following this outstanding college career, Strasburg signed with Scott Boras and was selected number one overall by the Washington Nationals, despite contract demands of six years and 50 million dollars.

Let me just reiterate that.  FIFTY MILLION DOLLARS for 6 years with no major league experience.  How crazy would you have to be to agree to that?  You can form an All Star team full of players who haven’t earned 50 million dollars over their entire CAREER and Scott Boras wants it for this 21 year old kid?  As crazy as it sounds, Boras is on to something.  Given the incredible amount of hype surrounding Stephen Strasburg and the desperate need the Washington Nationals have for a star, it would not be a poor investment.  It is safe to say that the minute Strasburg signed, he’d likely be only a brief tune up away from starting in the Majors.  That means, unlike all other rookies, the big league club will start seeing dividends immediately rather than two or three years down the road.  You would have to assume that Nationals fans would come out in force to see this kid with the 50 million dollar arm pitch.  So let’s go into some hypothetical scenarios real quick.  Let’s assume that Stephen Strasburg is the opening day starter for the Nationals in 2010.  It’d certainly be a sell out crowd.  So here’s the math.

"41,888(max capacity of Nationals Park)x$34.67 (the current average price of a Nationals ticket)= $1,452,256 per game."

That’s nearly 1.5 million dollars just in ticket sales.  Assume he makes 15 starts at home and that’s $21,783,854 a year.  You’ve just earned back nearly half the money you paid him for six years in only one.  Project that same figure over the length of the contract and you are looking at $130,703,126, nearly a 300% increase over your initial investment.  If that does not impress you, then figure in merchandise and concession prices on top of that and you will have a 6 year total well over 150 million dollars all because of one player.   Even if the Nationals don’t sell out every game Strasburg pitches, they still will stand to make a ton of money.  Again, this is all hypothetical but don’t you think profit gains like that are worth the investment?  If you don’t, I feel bad for you because someone else will and they’ll send you a nice thank you card in October while they are playing in the postseason.

Look for a similar argument to be made next year with Bryce Harper.