Indians Go Long with Corey Kluber and Carlos Carrasco

The Cleveland Indians already had much of their team in place for many years on the position player side after extensions for Michael Brantley, Jason Kipnis, Yan Gomes, and Carlos Santana. In one weekend they solidified their future on the pitching side as well, locking up ace and Cy Young Award winner Corey Kluber as well as fellow rotation member Carlos Carrasco. Deals for pitchers are never a guarantee of performance, but with the cost to acquire pitching outside the organization so high, the Indians made out very well in securing potentially six years of free agent years with $60 million in guarantees.

Carlos Carrasco was not the player most likely to receive an extension, but he will now be guaranteed $22 million over the next four years with two club options after that believed to be worth around $10 million. Carrasco entered arbitration for the first time this year and was set to make close to $2.3 million this season. Extensions for players in their first year of arbitration are not common. Before this offseason, there had not been an extension for a player with between three and four years of service time since January 2011, when Johnny Cueto signed a four-year deal with the Cincinnati Reds for $27 million that included a team option and bought out two potential free agent years, per MLB Trade Rumors Extension Tracker. Even expanding the parameters a little finds few players close to Carrasco’s situation in the recent past. Gio Gonzalez signed his five-year, $42 million deal as a super-2 three years ago, and Jaime Garcia was about two months from arbitration when he signed his four-year $27 million in July 2011.

The nexus to reach a deal after a player hits arbitration is difficult. The player has gained some security through his first seven-figure contract and the team has control for three more seasons before free agency. Making major guarantees beyond that point, especially for pitchers, can be difficult for a team when the alternative is to go year to year. The St. Louis Cardinals and Lance Lynn found that to be the case this offseason. Lynn, with a better track record than Carrasco and in line for more money in arbitration, agreed to a three-year deal for $21 million that gave him security during his arbitration, did not delay free agency, and gave the Cardinals some cost certainty but little else.

Wade Miley, who signed a three-year contract extension with the Red Sox for $19.25 million with a $12 million club option, is the closest comp for a contract to Carrasco. However, Miley’s contract is much closer to Lance Lynn’s deal, buying out one year of free agency as opposed to the Carrasco deal which has the potential to buy out three free agency years and delay free agency until Carrasco is 33 years old. There is some risk for Cleveland as prior to 2014, Carrasco had made 40 unimpressive starts over several years, posting a 5.53 ERA, a 4.60 FIP and just 1.2 WAR over 224 2/3 innings pitched. In under 100 innings as a starter in 2014, Carrasco pitched brilliantly, striking out 28% of hitters and walking under six percent using a change without a comp. His 2.21 FIP and 2.67 ERA signalled a breakout, and Carrasco is cashing in on half a season’s excellence and receiving a guarantee ten times his current salary.

For Cleveland, if the breakout is real, they have bought out three free agent years rather cheaply and will have a bargain. If the breakout is a mirage or Carrasco is injured for much of the deal like Jaime Garcia in St. Louis, the Indians will still have paid very little. Cleveland is not paying $22 for production over the next few seasons. They are paying that money to secure at least one free agent year and risk-free options that could keep Carrasco in Cleveland for the next half a dozen years without resorting to free agency for a replacement. The deal makes sense for Carrasco after three years of poor performances followed by one good half-season, but for Cleveland this is a deal too good to pass up.

The Carrasco deal is not the headlining deal for the Indians, who signed Corey Kluber to a much more significant contract. Kluber’s situation, while considerably different from Carrasco, is also an unusual one. Kluber, whose deal is worth $38 million over five years with two options years is one year away from arbitration. The deal is not too far off from the five-year $32.5 million contract with two option years that Chris Sale received two years ago with the same service time, but Kluber was in line for a much bigger payday in arbitration than Sale or Carrasco. Arbitration pays award-winners handsomely, and coming off a Cy Young-winning season, Kluber might have been in line for a $10 million contract in 2016 that would escalate in the final two years of arbitration. Kluber, who will turn 29 later this week, bloomed late and free agency would not have been an option for him until he was heading for his Age-32 season even without an extension.

Kluber was going to have one shot at a big contract, and he gave up that shot for guaranteed money pretty close to what he would have made in arbitration. It was now or never for Cleveland reaching a long term deal with Kluber. The Cleveland ace was set to make the Major League Baseball minimum salary this season, but would have little incentive to give up free agent years after getting a big raise in 2016. Without an extension, Kluber risked an injury potentially destroying his future earnings and never cashing in on his 2014 season. Given the escalators in Kluber’s contract, if he continues to pitch well, he will be paid between $15 million and $20 million into his mid-30s. If he pitches poorly or gets hurt, he has the guaranteed $38 million to fall back on.

These deals could not have been easy ones for Cleveland to reach given the unique profiles of the two players, but in total, the team paid just $60 million in guarantees to have options on potentially six seasons of free agency at relatively low prices. Even if they pay out the contracts completely, which is the best case scenario for Cleveland, the team will pay just $130 million for 13 years of pitching. To some degree, Kluber and Carrasco are cashing in on unexpected breakouts and they have every right to do so, but the free agent years that Cleveland gains down the road are incredibly valuable. With Jason Kipnis, Michael Brantley, Carlos Santana, and Yan Gomes already signed to long-term contracts and Nick Swisher and Michael Bourn coming off the books in the next few years, Cleveland has the potential to take control of the American League Central the way they did in mid-90s when Kenny Lofton, Manny Ramirez, and Jim Thome had Jacobs Field rocking.