Extension of Contention

With so little to discuss in these slow days that connect the Super Bowl to the gloriousness of the days when pitchers and catchers report (as well as March Madness), perhaps now would be a good time to revisit a topic that’s already had some e-ink spilled on it here and in other places – the possibility of extending Asdrubal Cabrera and the overarching theme of players under contract for the Tribe going forward. This is all prompted by the reports that Asdrubal stayed in Cleveland after being named the Cleveland Athlete of the Year (or something like that) to talk to the Indians about a long-term extension as he and the organization quibble over Cabrera’s 2012 salary in his second arbitration year.

Since there is much confusion among the masses over how arbitration works and every announcement of a 1-year deal for arbitration-eligible players is met with an odd amalgamation of “huzzahs” and “why only one year” questions that show a fundamental ignorance of the process, I’ll point your eyes to how arbitration works, as put forth by B-Pro a few years back. Admittedly, it’s pretty involved stuff…so to set the stage with a Cliff’s Notes version and applying it to the current situation, here’s a synopsis of how salaries are determined for arbitration-eligible players, as summed up by Jordan Bastian in a recent Inbox:
Much of the process is based on the player’s career track record, his salary in previous seasons and comparisons to other players in similar situations. In a case like Cabrera’s -- where his 2011 production jumped considerably over his past showings -- there is a bigger pool of players to compare against in order to come up with a proposed salary for the next year. Teams, as well as the player’s representatives, will take into account things like age, Major League service time and stats in order to find other comparisons around the game. Naturally, a player’s camp will approach a team with a higher salary figure than the salary offer from that club.

At this point, we don’t know who Asdrubal or the Indians are using for comparative players as the basis for the proposed salaries as the players being used could be Alexei Ramirez, JJ Hardy, Stephen Drew, Troy Tulowitzki, Howie Kendrick (just signed a 4-year, $33.5M deal…though he was entering his final year of FA), or others. What we do know is that Asdrubal has asked for $5.2M, with the Indians’ offer coming in at $3.75M. That seems like a pretty big chasm, but it really isn’t if you figure that the team and the player could meet in the middle around $4.5M or $4.75M and not really have a “winner” or “loser” if they were to come to an agreement without an arbiter. Way back when, MLBTR predicted that Asdrubal would get $4.8M in arbitration this off-season, so it wouldn’t be all that surprising to see it end up there.

But if the Indians and Asdrubal do meet somewhere in the middle or even if they head head off to an arbitration hearing (something the Indians haven’t done since – and I know you’ve heard these two names associated with the Tribe and arbitration – The Guv’nor and Flounder), that doesn’t mean that the long-term deal that is allegedly being thrown around would be off the table as Indians’ history has shown that these extensions are often done during Spring Training.

In terms of the long-term extension, it’s something that was broached here back in September, last month by MLBTR (although their math is a little fuzzy in terms of suggesting a lower 2012 salary in a long-term extension than what they themselves predict he’d get in arbitration), and last week by Castrovince as well as FanGraphs, which uses Stephen Drew’s extension as the basis for a possible Asdrubal extension.

If you want the nuts and bolts of a couple of those projections (not put forth by me) from the pieces that put hard numbers to it, they’d look something like this:
MLBTR – 4 years, $26.5M
2012 – $4.25M
2013 – $6.5M
2014 - $8
2015 - $8M

Castro – 4 years, $26.25M or 5 years, $33.75M
2012 - $4.5M
2013 - $6.75M
2014 - $7.5M
2015 - $7.5M
2016 - $7.5M

Realizing that guessing at salary numbers is about as entertaining as following the Twitter feed for the last arbitration-eligible Indian to sign, I’m putting these down because I think that these guesses are low in terms of what would compel Asdrubal to give up a year or multiple years of FA, which is one of the main reasons to explore a long-term deal from the team’s perspective. By that I mean that Fangraphs has an Asdrubal extension somewhere in the 3-year, $22.5M range with a $4.7M salary in 2012, but points out that Asdrubal’s already asked for $5.2 in arbitration for this years. Maybe I’m being naïve here, but I would think that it would take more upfront money in 2012 to bring Asdrubal around to the idea that he should put off the FA that’s scheduled to come to him after the 2013 season. Ultimately, I would think that the Indians would have to give Asdrubal a 2012 salary above and beyond his desired arbitration number of 2012 to entice him to lock in numbers for 2013 AND give up a year (or years) of FA past the 2013 season.

The numbers that I came up with way back when looked like this:
2012 - $5.5M
2013 - $8.5M
2014 - $10M
2015 - $12M club option ($1M buyout)
2016 - $13M club option ($2M buyout)
While that admittedly looks high in hindsight in those option years (and really starting in that 2014 season…as I’d probably amend that today by dropping each annual salary in 2012 and after by $1M or more), it needs to be remembered that Asdrubal (and his agent) are looking at him hitting FA after the 2013 season and the question becomes whether he would be able to net a contract large enough at that point to put off the guaranteed money that the Indians could offer in the short term. To me, if the Indians bumped his 2012 salary OVER what he’s asking in arbitration and allow that salary to escalate accordingly, it might compel Cabrera to the negotiating table and, more specifically, to be amenable to signing away FA years. Maybe 4 years and $31M gets it done to keep him under control through the 2015 season ($5.5M, $7.5M, $9M, $9M) as Alexei Ramirez’s 4-year, $32.5M deal that was signed this time last year is an interesting starting point as the two are similar hitters.

Regardless of the numbers, there is little question that the Asdrubal situation will start to provide a sneak peek as to what the Indians are going to do with some of these young players that are approaching or are already ensconced in arbitration.By that I mean that much has been made recently of the Indians having no long-term contracts on the books past next season (although Ubaldo’s club option for $5.75M in 2013 is likely to be picked up), with the idea that the Westbrook and Hafner extensions have scared the Indians away from long-term deals or even that the Indians are somehow clearing their decks for nearly-unprecedented payroll flexibility. For whatever reason, there’s this belief out there that the Indians aren’t going to buy out arbitration years and attempt to keep players under club control into a couple of their FA years because they’re risk-averse (and Castro adroitly points out what risks would be assumed by the Indians by giving Asdrubal a long-term deal) and might be more willing to go year-to-year with these players in light of injuries and regressions to players that signed long-term deals, even those similar to the ones signed long ago by Sizemore, Peralta, and Carmona/Hernandez.

What should be noted however is that the Indians are in a unique stage in their developmental curve right now as they don’t have players that are about to hit FA at the end of THIS year, as Hafner and Westbrook were when they signed their extensions, but instead they have players that are either playing out the final years of their long-term contracts (Hafner), are working off of one year deals (Sizemore), are just now hitting arbitration or are entering their second year of arbitration like Cabrera, Masterson, Choo, C. Perez or players that are just breaking into MLB and aren’t even all that close to being arbitration-eligible, like Santana and Kipnis.

Regardless, since so much attention has been paid to how the Indians don’t have set financial commitments past this year (other than to arbitration-eligible and pre-arbitration-eligible players), it got me wondering why that was. Essentially, I think that it’s a function of the Indians not really having players over the last couple of years that would have been approached about long-term deals that bought out FA years (other than Choo) as they did in the early-to-mid-2000s. To that end - who, besides Choo, is a player on the Indians that wasn’t already working on a long-term deal that should have been locked up prior to the 2010 or 2011 season?

By that I mean that this is the first off-season that it has made much sense for the Indians to even approach Asdrubal about a long-term extension as serious questions persisted about his health and conditioning (and still may) and prior to this year, a player like Masterson was still largely an unknown quantity. According to all reports, the Indians DID approach Choo and Boras about long-term deals and were summarily rebuffed. After Choo’s 2011 season, the Indians might be happy about that, but a long-term extension is probably something that they’d still probably explore with Choo…even if they might be a little less generous in their offer, both in terms of years and dollars.

Way back when, the Indians signed CC, Victor, Peralta, Grady, CP Lee, and Fausto to deals that bought out arbitration years and FA years…which current player that’s entered arbitration with the team (other than the aforementioned Choo) in the past few years merited being approached?

Those players of the mid-2000s had accomplished much more (CC, Victor) or exhibited preternatural promise (Grady, Fausto) that we haven’t seen on a consistent basis from this group of players. Prior to the 2011 season, there was never any thought that locking up Asdrubal (coming off of an injury-riddled 2010) or Masterson (reliever or starter?) the way that Peralta and CC once were. Now, with the idea that the Indians and Asdrubal may be talking long-term deal (and this deal should include FA years…unlike the deal that Elvis Andrus just signed with the Rangers that simply put set numbers on Andrus’ arbitration years), it would seem to represent the first player (and remember, I’m excluding Choo here because of the presence of Boras) whose stay in Cleveland would be extended past that “magical” time at the end of 2013, when all of the good players disappear and the window for contention slams shut at the corner of Carnegie and Ontario.

Even if Asdrubal leaves Cleveland (and he may have already) without a long-term extension in hand, want to know why it’s not necessarily an indication that nothing will get done?

Here are the last two deals that bought up arbitration years as well as FA years:
Grady’s buy-out, lock-up deal – signed March of 2006
Fausto’s buy-out, lock-up deal – signed February of 2008

Going back further for some context on when these deals are usually announced by the Indians, there are these buy-out, lock-up deals:
CC – signed April of 2005
Victor – signed April of 2005
Peralta – signed February of 2006

All of those deals were signed in February, March, or April and while CP Lee’s extension was signed in August of 2006, that seems to be the exception to the rule of how the Indians handle their long-term deals. In all of those cases, the players that were arbitration eligible agreed to one-year deals, with the agreed-upon extensions taking the place of the one-year deals that the arbitration process resulted in. All of this is meant to point out that even if Asdrubal and the Indians come to a one-year deal in the coming days or weeks, it certainly doesn’t mean that a long-term deal couldn’t still be in the offing. So if the Indians want to lock up Cabrera and Masterson (and they should for both), those deals could come about in Spring Training or over the course of the next few months, even though Masterson has already agreed to a one-year deal and Cabrera could be holding a one-year deal (at a number determined either via agreement or arbitration), they could be inked to deals that keep them in Cleveland past 2013 (Asdrubal) or 2014 (Masterson).

Perhaps next off-season, the Indians approach Santana and Kipnis and/or Chisenhall the year after that. But even if they sign players like that trio to long-term deals, the manner in which those contracts are constructed don’t add a TON of money to the short-term payroll and really just provide the player with some security in terms of guaranteed money while the team’s assumed risk in guaranteeing the money is rewarded by extending the career of the player in Cleveland.

Just as an example (and mentioning this name always pulls at my heartstrings), Victor’s deal in April of 2005 was for 5 years and $15.5M with a $1M signing bonus with the years and salaries that it covered looking like this:
2005: $500K
2006: $800K
2007: $3M
2008: $4.25M
2009: $5.7M
2010: $7M club option ($0.25M buyout)

Want the Indians to do something similar with Santana after the 2013 season that would keep him here through the 2018 season?
Sure, no problem…but don’t mistake these long-term deals for tying up much more in terms of annual salary than what the player would earn in arbitration as the give-and-take of buying up arbitration years and FA years is that the player takes the guarantee of the money and the team gets set dollars for their payroll going forward.

The reason that the possibility of a Cabrera (or Masterson) extension becomes compelling is that the 2011 season represented the first time that Cabrera and Masterson emerged as players that could merit consideration for extensions in an effort to keep them in Cleveland longer than they are currently slated to be. Perhaps the 2012 season will reveal more players that fit that bill as well as the Indian stand at the precipice of perhaps having multiple players emerge as “core” players. Remember that it was the Spring Training prior to the 2005 season that El Capitan and The aCCe were locked up with extensions for Peralta, Grady, and Lee coming year later. Obviously players like Cabrera or Masterson may be in a different service time schedule in comparison to those players at those times, but with so many young players attempting to establish themselves in MLB and with the Indians history of locking up young players, it’s hard not to see how some extensions maybe forthcoming.

Perhaps Asdrubal is that 1st player identified among the current crop that is worthy of (and willing to sign) a long-term deal that buys out FA years and extends his time in Cleveland. Whether or not Cabrera is that first domino to fall, the Indians have plenty on the table in the 2012 season and beyond with the idea that the current group of players has now arrived and figures to mature as a group in the coming years.
How many years is what remains to be seen…