$ 500,000 salary in 2010 (an additional $50,000 from his original contract) +
$ 500,000 signing bonus when contract is approved by MLB +
$ 500,000 bonus on July 15, 2010 +
$ 250,000 bonus on November 15, 2010 +
$ 3,250,000 in 2011 (what would have been the first year of arbitration) +
$ 5,500,000 in 2012 +
$ 7,750,000 in 2013 +
$11,250,000 in 2014 +
an option for $13,000,000 in 2015...or a $600,000 buyout
Gallardo would represent only the third Brewer player contract beyond 2011 (Randy Wolf and Ryan Braun are the other two).
Positives include knowing exactly what you will be paying for your top pitcher in each of those years, plus buying out the first two years of free agency eligibility (and also ensuring that Doug Davis will never wear number '49' again for the Crew). A likely positive, too, is saving money from what you might have had to spend if Gallardo were to win 20 games or win the Cy Young award.
The potential negative, however, is overpaying what the market would have gotten you in a free agent. Obviously, Melvin must think the market for ace pitchers will be rather slim and expensive over the next few years, and is willing to gamble on a pitcher that has only pitched a complete season in just one of his three years in the majors.
The above figures, however, will likely represent a bargain for the Brewers' if Gallardo pitches as well as everyone expects (read: "hopes"). Certainly, $11.25 million in 2014 is probably going to be a better value for the Brewers' owners than, say, a $12.5 million in 2010 dollars for a #5 starter struggling to keep his ERA below 5.00.