Yesterday, the Dodgers signed Eric Gagne to a two-year, $19M contract that includes a $1M buyout on a $12M option for 2007. The deal sets his salary at $8M in 2005 and $10M in 2006. Gagne holds the right to void the option year, if he wishes to pursue free agency, and he reportedly still will receive a buyout of between $250,000 and $1M depending on how many games he finishes over the next two seasons.

While I generally do not see a need to pay a high priced closer, Gagne certainly rewards L.A. with excellent innings for their investment. Consequently, I can accept this allocation of resources. The Dodgers could more fully take advantage of the former starter's skills by making him available for more two-inning saves. Nevertheless, by the time he reaches his option year, I fear Gagne's salary demands may outweigh his usefulness.

Last week, L.A. signed Derek Lowe to a four-year, $36M contract. An impressive post-season performance evidently countered the negative impression of his 5.42 2004 ERA. As a groundball pitcher with a slightly elevated walk rate, Lowe relies heavily on the defense behind him to limit his total baserunners. The Dodgers fielded the best defense in the National League in 2004, and despite a few personnel changes, their fielding should remain solid in 2005. I expect the 31-year-old to perform effectively for L.A., but once the exuberance driving this free agent market wanes, I believe his salary will seem inflated.