Justin Masterson, Arbitration, and the Future

Arbitration Decision on Justin Masterson Looms Large

One of the issues the Indians will have to consider addressing this offseason is the contract status of Justin Masterson.

As it currently stands, Masterson is entering his third year of arbitration and will be eligible for free agency following the 2014 season due to his service time. The Indians can go in one of two directions in order to address the situation.

Sep 2, 2013; Cleveland, OH, USA; Cleveland Indians starting pitcher Justin Masterson (63) pitches against the Baltimore Orioles during the first inning at Progressive Field. Mandatory Credit: Ken Blaze-USA TODAY Sports

First is extending Masterson and buying out his free agent years to keep him in Cleveland for the foreseeable future. The other option is to do nothing and allow Masterson to play out the 2014 season and try to lure him back while also contending with other free agent suitors. Given Masterson’s age and production to this point (and how well letting Ubaldo Jimenez and Scott Kazmir explore free agency is going), it seems likely that the Indians would rather address the situation sooner rather than later.

In the meantime, the Indians will have to either offer Masterson a fair deal for the 2014 season or enter into arbitration negotiations. Per an article posted on MLB Trade Rumors earlier this morning, Masterson is probably due for a raise somewhere around $4.0125-million. They came to this amount based on Masterson’s pre-platform salary and comparable contracts handed out to other arbitration eligible starting pitchers with comparable stats in recent years. That would bump Masterson’s 2014 salary up to $9.7-million. MLB Trade Rumors summarized the deal as follows:

"“This is not very different from the $4.0125MM that I have down for Masterson, even though Masterson had 14 wins. To try to find a good set of comparables for Masterson, I honed the win range to 13-15 wins, and looked for guys with ERAs in the 3.00-4.00 range who also had 175-225 innings. Perez got a $4.075MM raise from the Mets in 2008 when he won his arbitration hearing. Like Sanchez’s raise, Perez’s raise needs to be taken with a grain of salt because it was the result of a hearing, not a settlement, but the fact that Perez’s 15-10 record and 3.56 ERA looks so similar to Masterson’s 14-10 ERA with his 3.45 ERA, that it does warrant a comparison. Perez also only had 177 innings, compared with Masterson’s 193.Another good, more recent comparable for Masterson is Jason Vargas‘ raise last year. Vargas got a $3.65MM raise after going 14-11 with a 3.85 ERA in 217 1/3 innings. Of course, Vargas only had 141 strikeouts which puts him well below Masterson’s 195. The extra innings and equal number of wins are a good starting point for the Indians to try to argue that Masterson shouldn’t top the $3.65MM number. Masterson would be better off trying to argue similarity to Sanchez and Perez, whose raises exceeded $4MM after winning cases, but it remains to be seen how much weight those will carry.”"

The $9-million salary seems reasonable for the 2014 season, but again the issue here is Masterson’s long-term future with the organization, not just 2014. That’s where everything gets tricky. The Indians seem likely to lose two starting pitchers this winter and will be in no position to lose a third next winter. Throw in the fact that Masterson has emerged as the ace of the staff and a legitimate front line starter and things become all the more critical. We’ve seen before that the Indians prefer to extend rather than going to arbitration and Masterson should be no different, but again the decision will rest on Masterson’s broad shoulders as to whether or no he wants to commit to Cleveland long-term.

We have a long way to go before we reach the conclusion of the Justin Masterson saga. The wait will be even longer is they decide to play out 2014 without a long-term agreement in place. Either way, the point remains very clear. The Indians stand to lose a lot if they make the wrong decision.