Does the Seth Lugo Deal Set Merrill Kelly's Market?

As the Arizona Diamondbacks weigh all their options and other team's offers for their impending free agents, the market continues to swirl around them.

Their most valuable trade chip is likely to be Merrill Kelly. A free agent at the end of 2025, he continues to be one of the best and most reliable starters in MLB. This year he has a 3.22 ERA in 22 starts, 128.2 innings pitched. He carries a 3.2 Baseball-Reference WAR into the trade deadline, 17th best in MLB.

The story line around Kelly has been focused around whether or not he would be open to signing back with the Diamondbacks in the event he is traded. The answer to that from the player himself has been an emphatic yes.

Related Content: D-backs' Merrill Kelly Reveals True Thoughts About Trade Deadline

Does the Seth Lugo Deal Set the Market for Merrill Kelly?

But another line of thinking has emerged in the public sphere, due in no small part to the actions of the Kansas City Royals. As reported by MLB.com's Anne Rogers, they're in the process of finalizing a two year, $46 million contract with 35-year old Seth Lugo.

Per Rogers: "Lugo, 35, will make $20 million each in 2026 and ‘27, according to a source, with the vesting option worth another $20 million or a $17 million club option (with a $3 million buyout). Lugo also receives a $3 million signing bonus. If Lugo reaches all incentives and the contract is maxed out, it would be for three years and $63 million."

Could the Diamondbacks Shift Course and Just Resign Kelly?

The question then becomes whether or not the Diamondbacks should simply look to make a similar deal with Kelly. What Lugo received seems very much in line with Kelly's market value. They are quite comparable, as detailed below. It's notable that the guarantee for Lugo is below the $50 million threshold however.

That is significant because if Kelly were to stay with the Diamondbacks, and they make him a one year qualifying offer, ($21-22M) and he rejects it to sign somewhere else they receive a compensation draft pick.

But that pick is most valuable if Kelly were to sign for over $50 million. That would net Arizona a pick immediately following the first round. If the amount signed elsewhere falls below $50 millon, then the pick falls to after the second round, and has much less value.

The Diamondbacks will be without Corbin Burnes for all of 2027 while he recovers from Tommy John surgery. While they search for controllable young starting pitching on the trade market, the most prudent course to maintain competitiveness for 2026 might just be to extend Kelly.

Merrill Kelly and Seth Lugo Very Comparable Pitchers

Kelly is one year older than Lugo, but has seen no change at all in his fastball velocity, which has been right at 92 MPH since he was signed by the Diamondbacks as a 30-year rookie in 2019. Kelly relies on a six pitch mix, location, and changing speeds.

He can hump his fastball up to 95 when he needs it, but his assortment sinkers, cutters, changeups, curveballs, and even a slider allows him to keep hitters off balance and guessing. He gets the most amount of swing and miss with his changeup, and uses the cutter to induce soft contact.

Lugo is similar, and has been arguably better the last two years, posting ERA of 3.00 and 2.95. He throws eight pitches himself. But the Royals are taking a gamble here too. While Lugo also has deep a repertoire, flashing an eight pitch mix, his velocity has dipped across the board.

At the same time, Lugo's FIP has spiked to 4.27 and Statcast xERA to 4.57, well above his standard 2.95 ERA. Kelly, by comparison, has a 3.53 FIP and 3.87 xERA.

Both pitchers are the type who continually outperform their peripheral metrics however. Over the last four years Kelly has a 3.40 ERA compared to a 3.76 FIP. Lugo has a 3.22 ERA with a 3.69 FIP.

Summary

The Diamondbacks could take the risk, trade Kelly, get the best possible return, and try to bring him back after the season. The risk is there is that if he is successful in helping a team to the postseason, and performs well there, his price may rise to a point beyond what the Diamondbacks can pay for a pitcher in his age 37-39 seasons.

They could choose to forgo the uncertainties, lock Kelly up to a similar deal, and move on to building out their team for 2026 and beyond. There are risks with a Lugo type deal, or any deal for a starting pitcher of this age of course. But those are the risks a team needs to take if they want to remain competitive.