Did Seth Lugo Just Set the Market for Merrill Kelly?

Seth Lugo and the Kansas City Royals have reportedly agreed to a two-year, $46 million extension plus a vesting option for 2028. The right-hander was set to opt out of the third year of a three-year deal he signed with the Royals following the 2023 season. Instead, he’ll remain in Kansas City for two more seasons.

Lugo’s deal now raises the ante for the Arizona Diamondbacks. It effectively sets the market for Merrill Kelly, who is set to become a free agent after seven seasons in Arizona. Kelly is considered one of the top starting pitching trade candidates, but the D-backs can feel more comfortable being more judicious about potential offers. It also puts the decision of extending the qualifying offer in play, since it’s quite possible Kelly could land a $20 million per year offer in free agency.

Comparing Seth Lugo and Merrill Kelly’s Track Records

Seth Lugo has been one of the more underrated starting pitchers since returning to the rotation full-time in 2023. He’s totaled 466 innings in 78 starts between the Padres and Royals, pitching to a 3.17 ERA with a 22.6% strikeout rate and a 6.2% walk rate. Adjusting for park factors, his park-adjusted ERA+ sits at 131.

Only three other pitchers have had an ERA+ above 130 over 75 or more starts since 2023: Zack Wheeler, Framber Valdez, and Corbin Burnes. It’s worth noting that Wheeler got a nice three-year extension from the Phillies to cover the 2025-2027 seasons. Corbin Burnes got a $210 million deal from the D-backs, although he’s down for almost all of 2026 recovering from Tommy John surgery, and Framber Valdez is set to cash in this winter.

Kelly doesn’t have the same three-year track record as Lugo, mostly due to a teres major strain that sidelined him for nearly four months last season. However, he does have 125 starts to his name since the 2021 season and 65 since 2023. Kelly has pitched to a 3.62 ERA (116 ERA+) over 738.1 innings. Only 11 pitchers have pitched to a 115 ERA+ over 125 starts in the past five seasons. He might not make as much as Lugo on the market, but he can command a potential two-year deal on the open market.

How the Lugo Extension Impacts the Market for Merrill Kelly at the Deadline

That in itself could create a massive ripple effect on the trade market. With Lugo out of the trade market, the supply is lower for the same demand. It’s something that MLB and NFL broadcaster Chris Rose noted.

At just $2.33 million remaining salary for 2025, he should fit in any contender’s budget. But the deal would have to bring back much more value than 10 more Kelly starts and the $21-22 million qualifying offer. It’s a similar dilemma the team faces with Zac Gallen. D-backs GM Mike Hazen holds a lot of leverage in this situation if he’s open to bringing Kelly back in 2026.

Assuming Hazen can properly leverage the availability of his best starting pitcher, he should be able to get a strong return. Ideally, the return includes an MLB-ready starting pitcher prospect who can fill his rotation spot. Should the team deal both Kelly and Zac Gallen, they’re looking at Anthony DeSclafani and Bryce Jarvis as their No. 4 and 5 starters to close out the season. Their current crop of starting pitchers at the Triple-A level, including Jarvis, hasn’t shown any signs they’re ready to take on an MLB rotation spot for 2026.

If the right deal doesn’t come together, then they can hold onto Kelly and see if they can negotiate their own extension. The team will need starting pitching for 2026, and he certainly fits that need. If they don’t hold onto him, the likelihood he returns to Arizona next year is very low.

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