Tim Lincecum and the Giants have agreed to a 2 year, $40.5M deal to avoid arbitration. Lincecum is set to make $18M this year and $22M in 2013, plus a $500K signing bonus. Lincecum had put a $21.5M figure in for arbitration, and the team put in $17M, so the Giants get a bit of a deal for this year and likely next year. The past 2 years, Lincecum has been a 4-5 win pitcher, after a couple 6-8 win seasons in '08 and '09. If he continues to pitch at the same level, this is essentially a market-level deal.
However, his underlying skills have been diminishing the past 2 years. His K has dropped from 28.8% to 24.4%, BB rate has risen from 7.5% to 9.6%, and his first-pitch strike percentage has dropped from 56.7% to 53.7%, while the league average has risen 1.2%. His Zone% has decreased 4% in the PITCHf/x stats, where league average has remained steady.
Lincecum has expressed his desire to have short-term contracts, so this wasn't too unexpected. Once he hits free agency, he will most likely get a Sabathia-type deal, 7+ years and $160M+. Every other big name starting pitcher set for the 2014 free agent class has had major injury issues, so Lincecum's demand could be very high.