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Tribe Happenings: Payroll questions loom for the Indians

Tribe Happenings: Payroll questions loom for the Indians
February 17, 2013
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Some news, notes, and thoughts from my Indians notebook…

Aloha from Hawaii! I’m away for a bit on a vacation in Maui before the games begin, so the Happenings will be a little short today and next week Jim Piascik will fill the chair with a guest Happenings piece while I am away and wrapping up my vacation. Go Tribe!

2014 payroll issues loom

The Indians very busy offseason is pretty much now officially over with the start of spring training and their payroll at or above their threshold for 2013. Based on the sheer volume of moves and the quality of players brought in this offseason it was the busiest and most impactful offseason they have had since Progressive Field opened in 1994, maybe ever.

But as the dust settles on the “Offseason of Dreams” and we all impatiently look forward to finding out this season whether all the moves live up to the hype, there are some interesting payroll concerns looming for 2014.

Right now the Indians already have $46.5 million committed in salary to six players for the 2014 season. The players with guaranteed money on the books for next season are Mike Aviles ($3 million), Trevor Bauer ($1.575 million), Michael Bourn ($13.5 million), Asdrubal Cabrera ($10 million), Carlos Santana ($3.5 million), and Nick Swisher ($15 million). That total could go up to $54.5 million if Brett Myers’ $8 million club option for 2014 vests or the Indians just pick it up, which is a probable scenario either way unless he gets hurt.

The Indians will have a lot of money coming off the books after the season. Mitch Albers ($1.75 million), Ubaldo Jimenez ($5.75 million), Mark Reynolds ($6 million), Joe Smith ($3.15 million), Choo money ($3.5 million), and Hafner buyout money ($2.75 million) will all be off the books after the season, a total savings of $22.9 million off of this year’s payroll.

But a few of those players like Smith and Reynolds could be retained, and increases to current players on the roster will far surpass the savings they gained. From 2013 to 2014, Bauer will see a $200K salary increase, Bourn a $6.5 million increase, Cabrera a $3.5 million increase, Santana a $3 million increase, and Swisher a $4 million increase, which is a total of $17.2 million in increases.

On top of that, Michael Brantley, Carlos Carrasco and Vinnie Pestano will be first time arbitration eligibles, so each will see anywhere from a $2 to $3 million or more increase in their 2013 salaries, and Josh Tomlin and Blake Wood will also be first time arbitration eligibles and see small increases as well.  Then of course the Indians also have second and final arbitration year eligibles such as Lou Marson, Justin Masterson, Chris Perez, and Drew Stubbs who will all see increases to their 2013 salaries.

If all of these players are kept, then the total increase to payroll for all the arbitration eligibles could be at least $15-20 million, so combined with the $54.5 million in guaranteed salary for 2014 it means that right now going into next offseason the Indians payroll could be around $75 million.

That total is just for 14 or 15 players on the roster and before any offseason improvements are made as there will obviously be areas of the team in need of improvement. What this means is the Indians would have to seriously consider bumping the payroll to $90-100 million or more for 2014, or they would have to cut salary from other places in order to create room in the budget to pick up an established need or two.

The new national TV contract payouts are expected to begin next season, so that is $25 million-plus that will go to each team. This is something the Indians and other teams will obviously use to help with their payrolls, though it is not known how much of the Indians spending spree this offseason has already tapped into that money they are expected to receive next year.

Without knowing that, it is hard to accurately assess how much above $85 million in payroll the team can really go, if at all. It may come down to attendance as if the Indians are able to bump up average attendance from the 19,700 they had in 2012 to around the 28,500 they averaged in their playoff season in 2007, that is an increase of around 700K in fans for the season and about $20 million-plus in gate and concession revenues, which may be what ultimately helps in sustaining payroll and pushing it up enough to have the flexibility to keep players and improve the roster.

The more likely course of action may be to trade some of the players on the roster, and the obvious names would be Cabrera and Perez as both would be in the final year of team control in 2014, are getting very expensive, and have been rumored to be in deals and will continue to be rumored in deals up until their contract expiration date with the Indians.

Bottom line, the Indians are going to have to get creative next season in order to make any impact moves to the roster. The hope is that with the moves they made this offseason that they will work out and the team will have re-established itself as a contender, but they will probably still need that final player or two to get them over the top. That is where with the constraints of their payroll next offseason it will make it interesting to see just how high they set the payroll bar for 2014, but also what they do with the players on the roster to allow them to get there.

It is a slippery slope from which to operate on as the PR gained from all the moves this offseason could be damaged if they have to trade two fan favorites in Cabrera or Perez. Something will have to give, and it is funny how over the course of a six month season a lot of those questions will be answered.

Bourn and Matsuzaka sign deals

The Indians had another busy week on the signing front as they inked free agent outfielder Michael Bourn to a four-year $48 million deal with an option for a fifth season, and they also signed free agent right-handed pitcher Daisuke Matsuzaka to a minor league deal with an invite to Major League spring training.

The Matsuzaka deal was expected as the Indians had been connected to him previously in the offseason and he was expected to sign a minor league deal with the Indians, but the Bourn signing came completely out of nowhere. The Indians had been speculated as possible suitors for him at various points in the offseason, but there was never an indication that a deal was close. His sudden signing with the club really added some excitement earlier in the week as camp officially opened.

Bourn is going to really impact the team with his defense and speed as he is arguably baseball’s top defensive center fielder and one of baseball’s top basestealers.  He along with the addition of Drew Stubbs should team up with incumbent outfielder Michael Brantley to help the pitching staff with run prevention and get to a lot more balls in the outfield then the trio of outfielders the Indians had out there last season. His speed on the bases poses a threat to steal 40-60 bases, something not seen since the likes of Kenny Lofton in the mid-90s.  As for the bat, it should be adequate. He is going to frustrate a lot of fans with his streakiness and all the strikeouts, but in the end he should be a league average contributor at the plate.

Matsuzaka probably will not win a rotation spot this spring unless an injury or two occurs to Justin Masterson, Ubaldo Jimenez, Brett Myers, Zach McAllister, or Carlos Carrasco. Trevor Bauer looks to be all but ticketed to Triple-A Columbus to start the season, as does Corey Kluber who would probably be nudged out by Matsuzaka if he has a good showing this camp with his performance and health.

If healthy, Matsuzaka provides an experienced option at the back of the rotation that could give the Indians some time to finish off Bauer to get him ready for full time Major League duty going forward and also take their time in bringing Carrasco back from his surgery and not overwork him in his first season back. It is a low risk move that costs the Indians very little if he does not make the team as his contract is not guaranteed unless he is added to the 40-man roster at the end of spring training.

If Matsuzaka makes the roster he will make a base salary of $1.5 million for the season, and there are incentives in his deal which could push it up to $4 million in total if he reaches them all. The Indians must decide on whether or not to add him to the Major League roster by March 26th, or they can choose to keep him on in the minors or release him. If they keep him on after March 26th they would have to pay him a $100K bonus, and they would control him in the minors until June 1st when he could opt out of his contract and elect free agency.

There is a long way to go between now and March 26th with lots of spring games, so the Indians should have a good idea by then on how he looks, how healthy he is, and how strong the rest of the rotation looks in order to make a decision on Matsuzaka. Meanwhile, Bourn should be settled in by then and helping anchor one of the most exciting defensive outfields in Indians history.

Extreme roster makeover

What an offseason for the Indians. Whether or not you agree with the moves they made in the offseason, they were beyond busy as they made significant improvement in almost every area of the roster.

The Indians lost Esmil Rogers in a trade, but they picked up Bryan Shaw and Matt Albers in a later trade to replenish the bullpen. The Indians lost Shin-Soo Choo in a three-way trade with the Reds and Diamondbacks, yet picked up Michael Bourn and Nick Swisher in free agency and Drew Stubbs in a trade. The Indians lost Casey Kotchman, Brent Lillibridge, Shelley Duncan, Grady Sizemore, Roberto Hernandez, Jack Hannahan, Travis Hafner, Jason Donald, Jeanmar Gomez, Thomas Neal and Russ Canzler to free agency or waivers, yet picked up Mike Aviles, Yan Gomes, Mark Reynolds, Brett Myers, Trevor Bauer, Blake Wood, Mike McDade, and Chris McGuiness.

In all, the Indians have 17 new players on their 40-man roster than what they ended last season with. Talk about an extreme makeover. And this does not even include all the non-roster invites that the Indians have brought to spring training that have a chance to make the team.

Time will tell on whether some or most of these moves fail or succeed, but part of the reason for the increased optimism among the fans this spring is not only all the activity the Indians had in the offseason, but the plethora of new faces that bring new hope.  The Indians finally cut the ties with some very frustrating players to watch over the last four to five years, players such as Sizemore, Hafner and Hernandez, and have replaced them with new players that hopefully will be much more productive (and healthy).

The offseason has brought hope and a lot of change that hopefully is for the better, and as a fan, that is all you can ask for.

Stubbs could rebound

One of the more interesting things that bears watching early on this season is how new outfielder Drew Stubbs fits into things for the Indians. He hit just .213 with 14 homers, 40 RBI, and .610 OPS last season for the Reds, and also had 30 stolen bases and struck out 166 times.

Stubbs was a high profile prospect with the Reds that never lived up to his hype, and on top of that he was their main leadoff hitter for the last three seasons. The combination of the pressure of having so many expectations set on him as a top prospect along with a high profile spot at the top of the lineup may have worn on him and resulted in the struggles he had.

Stubbs’ overall offensive production may be a wash as far as an improvement over the Duncan/Damon/Cunningham/Canzler nightmare last year in left field. Yes, I know he will play right field for the Indians, but he is essentially replacing those players in the lineup.  The difference to me is the intangibles he brings that neither of those players did: excellent defense and speed on the bases. Those players only had the ability to impact the game with their bats, but Stubbs can do it with his bat, glove and legs.

When Stubbs puts it all together he has the skills to really impact a game in the outfield, on the bases, and at the plate with his power.  The Indians plan to hit him low in the lineup, probably in the eighth or ninth spot in the order. He may still struggle, but if he does it will not be as magnified at the bottom of the lineup and he can still impact a game with his defense and speed. But the move to the bottom of the order along with much lower expectations with the Indians than with the Reds could be what gets him to relax and more consistently show his talent at the plate.

Stubbs is still young and insanely talented, so this is why I am very interested to see what kind of season he has this year for the Indians. He may continue to struggle, but even if he does he is still an upgrade over what the Indians had out there with the nightmare quartet in left field last season. But the upside is definitely there for him to be yet another solid piece for the lineup and end up as one of the biggest steals of the offseason.

Follow Tony and the Indians Baseball Insider on Twitter @TonyIBI. Also, his new book the 2014 Cleveland Indians Baseball Insider which profiles the Indians' Top 100 Prospects and more is available for sale.

User Comments

February 19, 2013 - 3:47 AM EST
John, I don't profess to know the exact ins and outs of the Indians payroll situation, but I do hear things from people that have no reason to lie, and they have said that the team operated at a loss last season. the actual average ticket price is about $20-25 a ticket, so you are way over-estimating the ticket revenues to begin with. There are also so many other costs like normal operating expenses (travel, electricity, phones, medical, rent, taxes, and so much more that totals in the millions) and of course other things like the scouting budget ($10M+) and much, much more. When you are 29th in attendance and have one of the worst TV ratings in the league, it is hard to bring in much revenue in comparison to your piers with advertising money, concession sales, merchandise sales, etc.
John S.
February 18, 2013 - 5:14 PM EST
Not sure what I'm missing with the Indians and operating at a loss. I assume that the 19700 attendance is based on Season ticket sales and not actual attendance. So if you say each ticket is sold at an avg of $40 then at 81 games were talking $63.8 million dollars and with Progressive pitching in a little dough the Indians should be able to cover ALL their employees, correct?. Now with the additional Fox $10mill & MLB $25mill they should be fine with the same 19700 attendance. None of that includes sales of merchandise or beer. Help me see what I am missing Tony and crew.
February 18, 2013 - 1:07 PM EST
Yes, amazing how the entertainment industry has boomed the last 15-25 years. Not just attendance numbers in baseball, but attendance numbers in all sports and throughout the entertainment industry with movies, etc. Look at how much films gross now and how many people actually go to a movie now as compared to 25 years ago.

Sam, the thing is the Indians have operated at a loss the past year or so. That's why it is not exactly known how much of the new Fox money and new national TV money will truly be left in the black for them to spend going forward unless attendance increases. The point about payroll being a potential problem is not that they can't sustain an $85 million payroll, it is the lack of space to add much needed improvements. If the payroll is already at $75 million for next season, it leaves room to maybe add one player at $8-10 million.....and they probably will have more than one need. Just not nearly as much flexibility as they had this offseason, and it may mean they have to make some trades to clear off some guys. Attendance is really going to be a deciding factor in things going forward as if it barely nudges up this season, then the Dolan's may top it off at $80-85 million even with the new TV money coming in.
February 18, 2013 - 12:42 PM EST
Last year payroll ended at 65 million. With the additional 10 million coming from Fox with the new contract and with the additional 25 million from the national contract, that would put us at 90 million based on last years revenue. Maybe it is me, but I am having this difficult time understanding where things have changed as far as spending. Don't get me wrong I am happy with this off season, but I see where 13 million from Hafner, 5 million from Sizemore, 5 million from Lowe, 3 million from Kotchman, and another 3 million from Wheeler, Duncan, and Hanahan which is close to 30 million lost from last year. With those salaries gone and with the new salaries almost a wash along with new revenue, why would 2014 be a problem?
February 18, 2013 - 4:33 AM EST
Aloha, Tony... Sometimes a guy would like to leave the continent in order to get away from work, but that isn't possible in the 21st century.

Regarding attendance, just finished an entertaining book by mike Epstein about baseball in the 70s. 19000 fans a game back then would have been a healthy number while in 2012 it put the tribe towards the bottom. Quite a few teams back then were drawing less than a million.

Given cable, satellite, computer venues for watching MLB today the numbers of people buying high priced tickets and expensive beers at ballparks today is impressive and a testament to baseball's staying power in the era of football popularity.
February 18, 2013 - 1:33 AM EST
Stubbs could be at the beginning of the end of his career.
Or he could be beginning an outstanding era.
The move to lower in the order, the anonymity of being a new hitter in a lineup featuring Bourn, Swisher, Cabrera, Kipnis, Reynolds, Santana, Chisenahll, & Brantley, and the move to a new city, will all help.
February 18, 2013 - 1:22 AM EST
Ah, yes, didn't mean to lump Donald in like that. Amazing how many moves in total were made this offseason though.
February 17, 2013 - 8:53 PM EST
Great read, only one mistake that I found...Donald got traded to the Reds.

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