Earlier today, the Giants announced that they have agreed to a five-year contract extension with Madison Bumgarner. He’ll be under contract with San Francisco through 2017, and the team also has options for 2018 and 2019 (2018′s a club/vesting option, and 2019 is just a club option). He’s guaranteed $35M, though in the unlikely event that he reaches Super Two status, he’ll make $40M. Buster Olney broke down some of the other contract details.

Bumgarner would have been eligible for free agency in 2017, meaning the Giants essentially get three more years of Bumgarner than they otherwise would have had (two of them, of course, on options). That’s where the real potential reward for the contract lies: those post-arb-eligible years. If Bumgarner continues on this excellent career trajectory, the Giants save some money, but not a significant amount — at least not considering the risk they’re taking (again, these are years over which they already had team control).

The incentive here comes in 2017, 2018, and 2019. If Bumgarner keeps doing his thing and hits the open market in 2017, he’s in store for a lot of money. The cost of retaining him (as we saw with Matt Cain) could be sky-high at that point. But the Giants have him locked up for that year at roughly $12M, which — down the road — is potentially a steal. And the club options, 2018 and 2019, could be even more rewarding — they give the Giants the option to hold onto Bumgarner for another couple years without the risk that comes with guaranteed contract years.

Madison Bumgarner is four months away from turning 23, and he’s already achieved quite a lot. Specifically, this: 337 innings, 119 ERA+, 3.7 K/BB. Based on what he’s accomplished thus far, there’s plenty of reason to believe that he can be among the premier pitchers in baseball over the next decade. There’s considerable risk, as with any long-term extension to a young pitcher, but the potential reward — having him under contract at a reasonable cost until he’s approaching his 30s — seems to outweigh that cost.

I liked the Cain extension a lot. But I love this deal. This is an excellent, forward-thinking move by the Giants’ front office, and I couldn’t be more excited about the prospect of watching Bumgarner pitch in a Giants uni’ for the better part of the next decade.