Indians Offseason Part One: Setting The Stage And A Kluber Extension

Aug 21, 2014; Minneapolis, MN, USA; Cleveland Indians starting pitcher

(28) walks back to the dugout after the fourth inning against the Minnesota Twins at Target Field. The Minnesota Twins win 4-1. Mandatory Credit: Brad Rempel-USA TODAY Sports

Part one of a two-part opus setting the stage for the Tribe’s offseason.

1) Before the Indians make even a single move this offseason, they already have a roster bereft of any glaring holes. Without any additions, their lineup can look something like this:

1. Michael Bourn-CF
2. Jose Ramirez-SS
3. Michael Brantley-LF
4. Carlos Santana-1B
5. Jason Kipnis-2B
6. Yan Gomes-C
7. Nick Swisher-DH
8. Lonnie Chisenhall-3B
9. David Murphy -RF

They have the makings of a decent bench:

1. Mike Aviles
2. Roberto Perez
3. Ryan Raburn
4. Tyler Holt

They have six options for the rotation that each has had at least some degree of big league success:

1. Corey Kluber
2. Carlos Carrasco
3. Trevor Bauer
4. Danny Salazar
5. J. House
6. Zach McAllister

And the back-end of the bullpen should remain intact:

1. Cody Allen
2. Bryan Shaw
3. Marc Rzepczynski
4. Scott Atchison
5. Nick Hagadone
6. Kyle Crockett

That’s an enticing 25-man roster. Since the Indians don’t have any major weaknesses that need to be addressed immediately, they have the flexibility to seek out the best contract available to add to that core of players. They don’t have to overextend themselves to fill a need (Looking at you Brett Myers!) and can simply add however they see fit.

2) There are two currencies that can be used to acquire major league talent. One is money, which can be used to either sign free agents or to take on a contract a team no longer wants to pay via a trade. The second currency is prospects, which can be used to trade with other teams or, in the case of an upcoming first round pick, be used to sign a free agent tied to a qualifying offer. Unfortunately for the Indians, they might be a little short on both.

Let’s start with the prospect side of things. The overall profile of the team’s farm system is on the upswing, buoyed by a promising crop of position players headlined by uberprospect Francisco Lindor. Unfortunately the Indians are pretty light on the type of high-upside pitching prospects that can really grease the skids in trade talks. The Indians are rarely willing to part with minor league talent to acquire a short term upgrade, and when they do make such a trade they try to accomplish it using pitching prospects, a la the Ubaldo Jimenez swap. So it wouldn’t appear as though the team has the prospect cache or willingness to deal from said cache to make a major addition using prospects alone.

The second currency is money, and with this being the Indians, they don’t have a lot of that either. As Steve Adams of MLBTradeRumors.com points out in his Cleveland Indians Offseason Outlook, the Indians do have some financial flexibility for 2015. Adams projects the Indians to have roughly $70 million committed in 2015 salary after arbitration agreements and filling out the roster with minimum salaried guys, which would seem to indicate they have room for either one major addition or a couple smaller ones under last season’s $84 million payroll. The problem, as Adams points out, is that 2016 will see Corey Kluber and Cody Allen hit arbitration for the first time, and Carlos Carrasco, Bryan Shaw, and Lonnie Chisenhall hit it a second time. The raises due to those players will increase their payroll into that $80-85 million range before guaranteeing any money to a free agent this offseason. So while the Indians may have some flexibility now, that same flexibility won’t extend into 2016….

3) ….which is why it would make sense for the Indians to use some of that immediate flexibility to extend Corey Kluber.

A potential Kluber extension is a fascinating exercise into the negotiation and game theory that goes into these pre-arbitration extensions. The team has a clear motive to extend Kluber: They don’t want to be facing a David Price-esque $24 million in salary obligations over Kluber’s final two seasons of arbitration eligibility.

The Indians have an opportunity to get really creative and utilize their immediate flexibility to get a couple valuable years on the back end of the extension. Perhaps something in the neighborhood of four years, $24 million would work, with an $11 million team option for the 2019 season. The Indians can use their current payroll space to structure the deal so Kluber receives $5 million apiece in 2015 and 2016 (with some of the 2015 money coming as a signing bonus), $6 million in 2017, and $8 million in 2018 with the team option in 2019. It’s rare to see $5 million guaranteed to a pitcher slated to make just above the minimum, but they may decide it’s worth guaranteeing the money now to avoid potentially paying upwards of $30 million through arbitration.

For Kluber, the incentive to grab some of that money now is strong: he’s coming off a career year, and as a pitcher is always at risk of blowing out an elbow or shoulder and completely derailing his career. $24 million would be a bargain for what Kluber would make if he continues to pitch at this level. But considering he’s only making the minimum in 2015, it may be worth it to him to forgo the potential of massive arbitration awards for some guaranteed security.

So a possible extension may very well turn into a game of chicken between the two sides. How much are the Indians willing to commit to Kluber now to potentially save some money down the road, and how much future earning power is Kluber willing to give up to lock in some serious guaranteed money right now. It will be a fascinating negotiation to follow, and it will go a long way into dictating the Tribe’s offseason plans.