After a tense negotiation, Baker and the Giants reached agreement Thursday on a two-year contract extension that makes Baker the game's second highest-paid manager.
Terms weren't disclosed, but a source close to the deal, speaking on condition of anonymity, told The Associated Press that Baker, who will enter his ninth year with San Francisco in 2001, will make more than $2 million per year, second only to Joe Torre of the New York Yankees, who makes $3 million. St. Louis Cardinals manager Tony La Russa is scheduled to make $1.9 million next season.
"We're all very happy about the outcome," Baker said. "We think the terms are good for both sides. We're very happy this could get done."
Baker led the Giants to baseball's best record at 97-65 and the NL West title this season. A two-time NL Manager of the Year in San Francisco, Baker is widely expected to win the award again this year.
But the Giants were knocked out of the playoffs in a four-game division series with the New York Mets, and Baker said the resulting fan criticism of his moves during the series forced him to think about his decision to return.
Baker said he didn't agree to return to the Giants until Thursday, after receiving encouragement from his father and his wife's mother, both of whom live within a short drive in Northern California.
Baker, who went fishing near his boyhood home in Sacramento this week to evaluate the situation, then asked for a private meeting with general manager Brian Sabean. The deal was completed 90 minutes before a hasty news conference Thursday night.
"After meeting with Dusty, it became apparent that we needed to get it done or move on," Sabean said. "We're very happy everything worked out."
Giants owner Peter Magowan said Baker chose a two-year deal over three- or four-year contract options offered by the team. Asked to explain his choice, Baker noted that this will be his fourth two-year contract, and that Sabean also is working with a two-year deal.
"Maybe I'll be looking at a fifth (two-year) contract before too long," Baker said with a grin.
The Giants and Baker's agent, Jeff Moorad, set a deadline of Friday for the completion of a deal. If an extension hadn't been agreed upon, Giants owner Peter Magowan would have allowed Baker to speak to other teams.
Arizona, Cincinnati, Los Angeles, Philadelphia, Pittsburgh and Toronto all have managerial openings. The Diamondbacks and the Dodgers had indicated Baker would have been a candidate for their openings if he was available.
Since Baker enjoys working with Sabean, has a strong rapport with his talented team an loves living in San Francisco, the only hurdle appeared to be money.
Though Baker's salary doesn't reach the level of Torre's contract, it's a hefty raise from the $750,000 annual salary under his current contract.
Asked how money figured in the deal, Moorad said: "A good chunk of it fell into place early, and a little bit of it came late."
"Dusty and I are really pleased with the outcome," Moorad said. "His preference all along was to stay in San Francisco."
Baker has a 655-577 record in eight seasons with the Giants, though his postseason record is 1-6. His tenure is the fourth-longest in the major leagues behind Tom Kelly of Minnesota (entering his 15th season), Atlanta's Bobby Cox (12) and Montreal's Felipe Alou (10).
Despite the Giants' playoff failure, Baker said he's excited to return to the team. San Francisco has won two division titles in the last four seasons, and nearly every component of last year's team already is under contract for next year.
"It takes a long time to build this sort of team," Baker said. "In my 33 years in baseball, I can name on one hand the teams I've seen like this."
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