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The San Diego Padres have locked up their ace to a long-term contract, the team announced Thursday. The Padres and righty Yu Darvish are in agreement on a six-year extension worth $108 million, reports MLB.com. The contract covers 2023-28. Darvish was set to make $18 million this year, so it's essentially a five-year extension worth $90 million.

Darvish, 36, was scheduled to become a free agent after 2023 and the deal takes him through his age 41 season. It's unlikely he will be a productive pitcher at that age, but a) the New York Mets just signed Justin Verlander through his age 41 season, and b) several free agents signed long-term contracts through their age 40 season this offseason, include San Diego's 11-year deal with Xander Bogaerts.

The Padres had two reasons to give Darvish a six-year contract. One, the extra years lower his competitive balance tax payroll number, which is the average annual value of the contract. Six years and $108 million comes out to $18 million per year, or only the 23rd highest among starting pitchers. We could even consider this a four-year, $108 million contract ($27 million per year, more or less the going rate for a pitcher of Darvish's caliber) with two extra years tacked on for CBT purposes.

Yu Darvish
SD • SP • #11
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And two, San Diego is trying to win in the short-term, while Juan Soto is still under team control (two years until free agency) and others like Bogaerts, Manny Machado, Joe Musgrove, and Fernando Tatis Jr. are in their primes. Retaining Darvish gives the Padres the best chance to win in 2023-24, even if 2026-28 are ugly. The Padres are nothing if not all-in on the present.

Of course, Machado can opt out of his contract after the season, plus Blake Snell is in the final year of contract as well. The Padres could move to extend Machado next, though his opt out would send him out into the open market at age 31, roughly the same age as Aaron Judge this offseason. Convincing Machado to skip on his opt out could require Judge money.

It should be noted Padres GM A.J. Preller ran international scouting for the Texas Rangers when the team originally signed Darvish back in January 2012, so the two have a longstanding relationship. The Padres acquired Darvish from the Chicago Cubs two years ago in a six-player trade that had a lot to do with (but was not entirely about) the Cubs shedding payroll.

Darvish threw 194 2/3 innings with 197 strikeouts and a 3.10 ERA last year. In 10 MLB seasons, his ERA has been 20 percent better than the average pitcher once adjusted for ballpark and the league's offensive environment. Darvish has received Cy Young votes in four seasons and was the runner-up in 2013 and 2020.

FanGraphs estimates San Diego's 2023 CBT payroll at $267.1 million. That is well over the $233 million threshold and close to the $273 million penalty tier that would move their 2023 first-round draft pick back 10 spots.