Negotiation over. Shortly before the two sides were to exchange binding arbitration figures Tuesday, the Dodgers and star reliever Eric Gagne closed a two-year deal with a mutual option for a third year.
Gagne, 29, is guaranteed $19 million and would make $30 million should the 2007 option for $12 million be exercised. He will get $8 million this season, $10 million in 2006 and a $1-million buyout if he and the Dodgers part ways after two years.
The contract makes him the highest-paid closer in the fourth and fifth years of a career. Mariano Rivera of the New York Yankees earned $7.3 million in his fourth season and $9.2 million in his fifth. The most a closer has made was $11 million last season by John Smoltz of the Atlanta Braves.
Avoiding arbitration was important to Dodger General Manager Paul DePodesta. Last year, Gagne was perturbed by Dodger arguments that ultimately persuaded a three-person panel to give him $5 million rather than the $8 million he sought.
“I remember telling him then that this was a process we’d like to avoid,” said DePodesta, who was hired only a few days before the arbitration hearing and did not take part in it.
The Dodgers have not gone to arbitration since, striking deals with outfielder Milton Bradley and shortstop Cesar Izturis this off-season. Starter Brad Penny is the only player who has not reached agreement, and DePodesta expressed hope that a deal can be reached before a hearing.
The two sides are not too far apart on a one-year contract. A source said Penny, who made $3.725 million last season, has asked for $5.7 million, and the Dodgers have offered $4.7 million. They can strike a deal at any time before a hearing, expected to be scheduled in early February.
“We are a team here,” DePodesta said. “We should all be pulling on the same end of the rope. We don’t like to be pitted against one of our own players. It is unnatural and unproductive.
“Sometimes we might have to go to arbitration, but I don’t like the process. Even if you win, you lose. It is nothing we will be engaging in regularly.”
Penny’s negotiation is complicated by the odd injury to a nerve in his biceps he suffered during his second appearance after being obtained from the Florida Marlins at the trading deadline. He pitched a shutout in his first Dodger start, was 9-8 with a 3.15 earned-run average for the season, and is expected to be the team’s No. 1 or No. 2 starter if healthy.
However, the unpredictable nature of the injury makes his value unclear.
“His is not a situation the system is set up to handle very well,” DePodesta said. “It is a relatively unusual case.”
Gagne’s career is somewhat unusual as well. He is comparatively old for a fourth-year arbitration player because he spent parts of five seasons in the minor leagues and sat out the 1997 season with an elbow injury.
His arm tired near the end of last season, and he required a cortisone shot in his shoulder in the final week. His contract won’t be finalized until he passes a physical.
After bouncing between the Dodgers and the minors as a starter from 1999-2001, he found a niche as a closer, notching 52 saves in 2002, 55 in 2003 and 45 last season. He had a major league record 84 saves in a row over a two-year period and has become a fan favorite, entering games to roaring applause with the slogan “Game Over” flashing on the scoreboard.
He’s also a favorite of teammates -- even ones who have yet to play a game with him.
“When he comes in, it’s like everybody in the park knows he’s going to get it done,” said outfielder J.D. Drew, who faced Gagne as a member of the Atlanta Braves and St. Louis Cardinals before signing with the Dodgers this off-season.
“That’s the way a lot of guys in the opposing dugout felt too.”
Scott Boras, Gagne’s agent, said that by signing Gagne for more than one season, the Dodgers sent a signal not only to fans but to his client.
“Having Eric Gagne come to the ballpark every day knowing he is a part of the Dodger commitment is an important statement for him and the franchise,” he said.
The signing also quelled suspicions that DePodesta did not appreciate Gagne’s contributions. A tenet of the “Moneyball” philosophy subscribed to by the Oakland Athletics, where he was assistant general manager, is closers can be developed from within the system and quickly become overvalued.
The Athletics have had five closers since 1999, trading Billy Taylor and Billy Koch, and letting Jason Isringhausen and Keith Foulke leave as free agents. Their current closer is Octavio Dotel.
“Eric is truly dominant,” DePodesta said. “He’s not a guy as replaceable as some of the other guys out there. He affects the games we are in a position to win. That’s huge.”
Times staff writer Tim Brown contributed to this report.
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A look at where relief pitcher Eric Gagne ranks among Dodger closers:
MOST SAVES SEASON
*--* Rk. Player Svs Yr. 1. Eric Gagne 55 2003 2. Eric Gagne 52 2002 3. Eric Gagne 45 2004 4. Todd Worrell 44 1996 5. Jeff Shaw 43 2001 6. Todd Worrell 35 1997 7. Jeff Shaw 34 1999 8. Todd Worrell 32 1995 9. Jay Howell 28 1989 10. Jeff Shaw 27 2000
MOST SAVES CAREER
*--* Rk. Player Svs 1. Eric Gagne 152 2. Jeff Shaw 129 3. Todd Worrell 127 4. Jim Brewer 125 5. Ron Perranoski 101 6. Jay Howell 85 7. Clem Labine 83 8. Tom Niedenfuer 64 9. Charlie Hough 60 10. Steve Howe 59