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Tribe Happenings: The timing is not right for Kluber extension

Tribe Happenings: The timing is not right for Kluber extension
Corey Kluber (Photo: AP)
November 17, 2014
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Some news, notes and thoughts from my Indians notebook…

The right time for a Kluber extension

Indians right-handed pitcher Corey Kluber was named the AL Cy Young award winner last Wednesday. It was a well-deserved award for a pitcher who has seemingly come out of nowhere over the last two seasons to establish himself as one of baseball’s best pitchers.

Upon winning the award the focus of a lot of people turned to the prospects of Kluber signing a long term deal with the Indians, but I am here to tell you that doesn’t need to happen right now and that the Indians history suggests they are probably still a year or two away from such a commitment.

Kluber had an amazing 2014 season. In 34 starts he went 18-9 with a 2.44 ERA and in 235.1 innings had a 2.0 BB/9, 10.3 K/9, 2.57 xFIP and 7.3 WAR. Whether looking at his traditional or advanced stats, no matter how you slice it he had an exceptional season. He also had a good breakout campaign in 2013 that hinted at the success to come after he went 11-5 with a 3.85 ERA in 26 appearances and in 147.1 innings had a 2.0 BB/9, 8.3 K/9, 3.10 xFIP and 2.8 WAR.

Even with the success of the past two seasons, the Indians really do not need to enter into a guaranteed long-term deal with Kluber. The key word in there is guaranteed.  Once signed to a long term deal, he immediately is a locked in cost for the length of the contract.

Currently, Kluber only has a little over two years of Major League service time so the Indians control him for another four seasons before he can reach free agency after the 2018 season. That means the Indians can simply go year to year with him if they prefer and not be weighed down by the risk of a long term guaranteed deal. This is similar to what they did with Justin Masterson the last few years as they went year to year with him through his arbitration years simply because pitching can be so volatile and a pitcher is one pitch away from injury.

Amazingly, Kluber is set to make just north of the Major League minimum of $500K next season. He has no choice in the matter, it is what he will make next season. After next season he would enter into his first arbitration year and as long as he has a good 2015 campaign his cost would begin to go up – but not as much as you think. Going forward, if he continues to pitch like he has the last two years, he would probably make around $10 million in his first arbitration year and then go up a few million each year after that. So his three arbitration years may end up costing around three years and $40 or so million. But the key is none of that would be guaranteed and would only come if he continues to pitch at a high level each season and avoid injury.

For the Indians to go out and sign Kluber to a long term extension right now, it would require them to at least guarantee four years and get five or six seasons of control with the addition of an option year or two. Teams typically only forgo that year-to-year arbitration flexibility in exchange for buying out at least one free agent year. The player prefers more guarantees while the club obviously likes financial flexibility and less guaranteed years. Kluber and his agent may push for five or six guaranteed years right now, while the Indians would probably prefer four guaranteed years at most with club options for a fifth or sixth year.

It is a huge risk for both parties. The Indians risk signing Kluber to such a deal and having him get hurt and not living up to the contract while Kluber risks signing the deal and performing well above what he signs for and thus losing potential additional earnings had he gone year to year. Seeing that Kluber will already be 29 years old when the season starts in April next year, he is probably most at risk and will probably push for the financial security of a long term deal now since he would hit free agency after his age 32 season. His best years could be behind him by then so he will probably want to bank on his value now.

No matter what happens here, the Indians and Kluber will no doubt talk about an extension over the next year and both parties will want to come to an agreement. But it won’t be that simple.

As we have seen in the past the Indians have an unwillingness to sign pitchers to deals longer than three years, and for good reason. Pitchers break down. They suddenly lose it. And while starting pitching is one of the most sought after resources in baseball, it may also be the most volatile and one where big multi-year deals end up hurting a team in the long run.

The Indians history is free agency and with contract extensions shows that they will only go a maximum of three years on a guarantee deal. They did it with the likes of Jake WestbrookPaul ByrdChuck Finley and countless others:

Free Agents Contract
Charles Nagy 4 years, $24 million
Jake Westbrook 3 years, $33 million
Chuck Finley 3 years, $27 million
C.C. Sabathia 3 years, $24.75 million
Paul Byrd 3 years, $21 million
Jack McDowell 2 years, $9.5 million
Dennis Martinez 2 years, $9 million
Dwight Gooden 2 years, $5.5  million
Orel Hershiser 2 years, $3 million

But in the case of Kluber he is not a pitcher nearing free agency or being plucked from the free agent market, so it is a little bit of a different scenario than those listed above. His scenario is more like that of Justin Masterson, C.C. SabathiaRoberto Hernandez and others who they had year-to-year control over for several years. In the past they have shown they will either go year-to-year with a starter in arbitration – like Masterson – or sign them to a long-term deal to carry them through their arbitration years:

Pre-Arbitration Contract
Roberto Hernandez 4 years, $15 million
C.C. Sabathia 4 years, $9.5 million
Bartolo Colon 4 years, $9.25 million
Jaret Wright 4 years, $8.75 million
Cliff Lee 3 years, $14 million

The Indians signed Sabathia to a four year guaranteed deal after his impressive rookie campaign in 2001, but interestingly only carried him through his second arbitration year as the club option was for his final arbitration year. The Indians later picked up that club option for 2006 and signed him to a two year extension in April of 2005 which carried him through the 2008 season.

They did the same thing with Hernandez signing him to a four-year deal in April of 2008 after his magical showing in 2007 as a near rookie. He had less than two years of service time at the time he signed the deal, so again, it only carried him through his second arbitration year and he had club options for three years after that which included his third arbitration year and first two free agent years.

Cliff Lee might be the best comparison for Kluber. Lee went 18-5 with a 3.79 ERA in 2005 yet the Indians still paid him a little over $400K as a pre-arbitration player in 2006.  Lee had two full seasons in the books with the Indians and was working on his third full season with the team in 2006 when he agreed to a three year extension in August of that season. The deal bumped up his 2006 salary to $750K and bought out his three arbitration years from 2007-2009 and included a club option for a fourth year in 2010.

The path they took with Lee is exactly the path I see them taking with Kluber next season: a wait and see approach and to get another year of risk off the books. If he is having another strong season, then I think we see a long term extension agreed to later in the season and one that carries him through his arbitration years and includes a club option for at least one or two of his free agent years.

Even though he just won the Cy Young award Kluber is in a tough spot as he really has no negotiating leverage right now because he is still a year away from arbitration and won’t hit free agency until after his age 32 season. Something may have to give which means he may be more willing to make a few more concessions and accept several club options on any long term deal he and the Indians agree to. A lot of bad can happen to a pitcher in one year and especially four years, so he may try and cash in now while he can to bring financial security to him and his family.

There are some creative ways to help reduce risk for both parties, but in the end any long term deal right now appears to be unlikely. But that doesn’t mean Kluber is going anywhere as he is going to be an Indian for several more seasons. This is a rare time when the Indians hold the cards when it comes to a long-term committment to a player. In the end, I don't see much hardball being played here by both sides and both will want to get eventually get a deal done. One that I think happens by the end of this coming season.

Going after starting pitching is a good thing

You know what they always say: “You can never have enough pitching.”  That’s a motto that Indians managerTerry Francona lives by and one that I believe he and the front office will stick by as they make their way through this offseason.

The Hot Stove season has been in effect for roughly two weeks now, and the one thing we keep hearing the Indians being in search of is starting pitching. Not a bat or a reliever, but starting pitching.

Now, I am sure as the offseason plays out they will also show their interest in upgrading the lineup, defense and bullpen; however, adding more starting pitching depth looks like one of the top items on their “to do” list this offseason.

This may come as a surprise to some considering how well the starting rotation was for the Indians the second half of last season.  Corey Kluber won a Cy Young, Carlos Carrasco was unbelievable and the trio of Trevor Bauer,Danny Salazar and T.J. House pitched well and rounded out a very strong five-man rotation. It would seem that they have no need for starting pitching help if all of those pitchers are able to repeat their success next season.

But in baseball, that is not how it works. A half a season is a rather small sample size and doesn’t solidify anything. Until this staff has attained a longer track record it is tough for the Indians to truly rely on any of them going forward. Chances are the Indians have an injury or two to one of those five pitchers next season or one or two of them have a step back in their performance. Just look at last season as an example.

Going into last season I am pretty sure a great many Indians fans were confident that Justin Masterson would continue to be a rock at the top of the rotation, Zach McAllister would be a solid middle of the rotation arm, and that Salazar had arrived as a true front of the rotation arm. Fast forward a few months into the season and Masterson endured one of his worst seasons as a pro because of health and mechanics issues, McAllister struggled to find any consistency and confidence in the rotation, and Salazar was a wreck.

This is why as promising a showing as Carrasco, Salazar, Bauer and House gave to end last season that the Indians need to consider bolstering their starting pitching depth this offseason because outside of McAllister andJosh Tomlin they have no other internal options to turn to.  I would prefer minor league deals on reclamation projects like Scott Kazmir and Aaron Harang the past few years, but I could see them signing a starter to a guaranteed one year deal to round out the rotation.

Obviously, if the Indians did this it would mean that one of Bauer or House would be in Triple-A as starting pitching depth. I don’t prefer this, but it would make some sense to have a good option on hand in the event the inevitable injury crops up in the starting rotation. House has one option left and while Bauer is out of options he is eligible for a fourth option year because he has less than five years of pro experience. Salazar has to be on the Indians roster next season because he is out of options.

The Indians reportedly have interest in bringing Masterson back to fill a rotation need next season. It would be a one year deal and probably not a lot of money, but it would be a guaranteed rotation spot. In return he would get a chance to re-establish his market value after a hopefully much healthier season and at the same time the Indians would get that needed rotation depth they are searching for. No team knows Masterson and his health situation better, which is why I think it is a pretty good chance he returns to the Indians on some kind of deal.

The Indians are in a unique situation where they conceivably could just bring back the entire pitching staff next year and be a very good one. All five starters are inexpensive, good and under control for several more years. I prefer they go into next season with the same starting five they ended the season with and not waste guaranteed money on a starter. They should look for depth for the rotation through non-guaranteed reclamation projects, waiver claims or small trades for blocked starting pitching prospects.

But at the same time the struggles of the starting rotation in the first half of last year were a big reason the team missed the playoffs last season. They need more consistency and most importantly they need more options to quickly turn to if someone is not performing well. They need to protect themselves from injuries and poor starts and have options to turn to in order to help avoid such struggles. Anything can happen, which is why you need options and sometimes may have to make a tough decision placing someone in Triple-A who deserves to be in the big leagues.

Extent of Urshela injury could impact depth

As noted in Around the Farm earlier today, Indians third base prospect Giovanny Urshela injured his left knee during his game with Aguilas del Zulia in Venezuela on Saturday night. He ripped a ball deep to the outfield and legged out a triple, but apparently something happened on the play where he felt some discomfort in the knee and had to be removed before his team took the field for defense the next inning.

Urshela, 23, was removed for precautionary reasons, but his winter ball manager Eduardo Perez was pretty frank in believing that it could be serious and that his winter ball campaign is likely over. Winter ball managers can often be a little more frank as they are not as restricted in their comments and can speak a little more freely because they have no tie to a Major League team.

Urshela was scheduled to have an MRI done on his knee on Sunday or Monday, so news could be coming down the pipe soon about the exact severity of the injury. The hope is that it can heal naturally and that rehab will strengthen and heal it. With a little under five months until the start of next season, there would be more than enough time for him to return at 100% by the start of the 2015 season where he is very likely to open at Triple-A Columbus.

If the news is not good and Urshela tore a ligament or something worse, this would be a devastating blow to the Indians depth at the third base position next year. While I believe the Indians will open the season with Lonnie Chisenhall at third base, they also need a very good fallback option if his struggles with consistency both offensively and defensively continue into next season.

Urshela was believed to be that fallback option. Leaving Chisenhall at third base would allow the Indians to get an extended look at him before making any long term position or role changes and going with another option at third base. It would also allow the Indians time to smartly manager Urshela’s service clock. But if Urshela is no longer an option for 2015, suddenly the Indians need to rely on Chisenhall a lot more and hope he comes around and performs better – and most importantly, more consistently.

If Urshela is indeed out of the mix, then Zach Walters probably becomes the next option at third base. But he is someone who could use a little more time in Triple-A to fine tune his approach and be more consistent with his bat. While he brings a lot of power every time he steps up to the plate, he is a rather easy out for Major League pitchers right now because of his low-contact rate and how susceptible he is to chase.

If the Indians do stick with Chisenhall at third base and Urshela is out for a majority or all of the 2015 season, then I would expect the Indians to find a depth third base option in free agency or in a small trade.

Ubaldo craziness

Last week when all the Ubaldo Jimenez talk surfaced I couldn’t believe how it spread like wildfire. It was merely a speculated move that a national reporter made with no basis behind it, yet a lot of people immediately took it as a rumor that the Indians were interested in reacquiring him.

I was all set to write an article explaining how such a move would make zero sense, then immediately dropped it in order to not point any more attention to the Jimenez talk – so I just decided to throw in a few comments at the end of my regular Monday column.

In a nutshell, reacquiring Jimenez won’t happen. Yes, the Indians need starting pitching depth like I mentioned above. And yes, they like reclamation projects. But Jimenez fits neither because depth options and reclamation projects are typically signed to non-guaranteed minor league deals and have roster flexibility. There is not much financial and roster flexibility when he can't be sent to the minors and the Orioles are on the hook for $38.75 million on him over the next three years.

And what sense would swapping one bad contract of Jimenez for Nick Swisher or Michael Bourn make for the Orioles or Indians? The Orioles want to unload Jimenez because he is a bad contract and want to get rid of as much of the financial obligation as possible, so why just bring back another bad contract in return? And why would the Indians trade two years of Swisher or Bourn for three years of Jimenez?

Anything can happen and it is tough to deal in absolutes in sports, but the Jimenez Era ended in Cleveland after last season and will stay that way.

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

November 18, 2014 - 12:29 AM EST
James, an extension for a pitcher is a lot different than one for a position player. The Indians have always been less inclined to commit to any pitcher for longer than 3 years. To lock Kluber in now, would require them to lock him in for at least four guaranteed years. It's just way too much risk, especially since the escalators in his deal will be much more than that of someone like Gomes. A five year contract extension for Kluber may cost the Indians $80M+. While that's not overly expensive, it is the guaranteed portion of is the last 2-3 years where he makes 70% of that money on the deal which is what leaves them uncomfortable.
November 17, 2014 - 5:23 PM EST
I disagree with Tony. I think you take a run at him ala Yan Gomes. I think you use the leverage from the risk Kluber is facing to lower the price below arb possibilities. I would offer something like 4 years $25mil plus a one year club option for like $15mil or something like that. It would be less than he might receive if pitching very well, but guarantees him money, which he has to be concerned about for all of the reasons Tony states. At the same time it is a relatively low cost/risk to the tribe. Kluber takes a hit on his potential money, Tribe takes a risk on a Cy Young pitcher. If he rejects it, fine, go year-to-year, if he takes it, great!
Larry M
November 17, 2014 - 5:11 PM EST
Yeah Roger, that was sort of what of going for -- a nice gesture. It might pay dividends, or it might not, but in baseball terms, it would not cost them much.
Larry M
November 17, 2014 - 5:08 PM EST
So I took a quick look (Ha) through the Basic Agreement and did not see any standard bonus structure. As it is a big document, such things may be included elsewhere, but for my own clarity, is the 10k mentioned below a "prize" from MLB for winning the CY, or is it truly a bonus that the Indians (other teams) pay as part of the contract. Not trying to be nit-picky, but am actually interested, as I was unaware of this previously.
November 17, 2014 - 4:59 PM EST
i still think that only 10,000 as bonus to kluber was a tad on the cheap side. Maybe a check with two commas would be wise it might create a home town discount down the road.and to think he next year only get 520k he more than earns his money. if he comes even close to 2014 numbers in 2015 if they want 6 yrs look to high 8 figures/ similar to what kip is getting if not more. However voluntarily issuing nice bonus check to klubs would be perceived as very generous gesture.
Larry M
November 17, 2014 - 4:58 PM EST
I did not know that the one year deals they sign as non-arbitration players had bonuses attached -- cool, there you go -- problem solved -- ha! I was probably thinking more along the lines of 25-50k, but if he had that in his contract already, that's fine.
Larry M
November 17, 2014 - 4:53 PM EST

Just reading your comment after my last post...I largely agree with you, and as I said, perhaps it is best to go with a gift (a car?, or whatever)...that way the Indians can look (and would be) a little magnanimous. I think it is better to make a gesture than bump up his base I noted below, the low end of the pay scale is just the way the financial game works. My suggestion was one of relatively low cost (in baseball terms) good will.

Some players have left guaranteed money on the table, retiring without the pay, rather than hanging around injured, etc.! That said, I would not have faulted them for collecting (signed contract and all). If Swish turned down part of salary because he felt he did not deserve it, I'd have great respect for that too. Being that he has made a good bit of money, it is a gesture he could afford, but by no means do I expect it.
November 17, 2014 - 4:52 PM EST
Yep, all of these players get some sort of pre-established bonus amount for finishing in x place for an award. It is built into all of their contracts, even the one year deals they sign as non-arbitration players.
November 17, 2014 - 4:48 PM EST
I know for sure he got a $10k bonus for winning the CYA, and likely a bit more for other awards.

I don't really understand the motivation for giving him some bonus at this point. When he reaches arbitration, he will get larger ARB awards than he would have without the CYA, so that bonus is already built into the system.

If you think throwing the guy an extra $250K or whatever this year is going to make him more likely to take a multi-million $ hometown discount when he's a free agent, well…. you have more faith in people than I do.
Larry M
November 17, 2014 - 4:38 PM EST

I do not think it is that common to give guys at 3 years or less that much of a bump...without looking it up, I am pretty sure Kershaw made near the minimum his first three years. Truly, I would not really blame the Tribe for paying near him near minimum, because that is the way the financial game is often played, but I still think it would be a nice gesture to go on and beyond the standard to recognize his Cy Young achievement. Perhaps a big gift makes more sense than screwing with the salary scale?
November 17, 2014 - 4:32 PM EST
I agree Larry.....but by the same token, should Nick Swisher give the Indians some of his salary back because he underperformed this year? Players and teams sign the contracts and have to live with them....and for those players yet to get a long term deal they are at the mercy of the system that has been established.
November 17, 2014 - 4:16 PM EST
Larry, typically teams do give preforming player more than the minimum salary and I do expect the Indians to do so with Kluber this year, but he will still make less than a million unless there is an extension signed.
Larry M
November 17, 2014 - 4:04 PM EST
I agree that there is no rush to start doling out guaranteed money to Kluber, but is it at all prudent to award him some sort of bonus or semi-lavish gift to recognize his truly excellent, award winning season? For a guy on the way low end of the baseball pay scale, maybe that would be appreciated. I guess it could set a poor precedent in some way, but when one of your lowest paid guys wins the Cy Young, that seems like a good time for something extra.
November 17, 2014 - 3:30 PM EST
I agree. I would go year-to-year with Kluber. The window of contention for this group looks like 2015-2018. Most of the core begins decline years or free agency after that. There's no way of knowing what those years will look like, and committing significant financial resources to a pitcher (risky) who will be 33 (even riskier) doesn't seem prudent.

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