One of the biggest pop hits of 2016 was “24K Magic” by Bruno Mars. So far this off-season, Cleveland Indians owner Paul Dolan has blared it with his window rolled down despite the cold Northeast Ohio winter. On December 22nd, the Indians announced the signing of former Blue Jay Edwin Encarnacion to a multi-year deal and shocking the rest of the baseball world.
Contract Details
Edwin Encarnacion’s deal is worth $65 million guaranteed. The $5 million option buyout is on top of $20 million a year he’s getting for three years. Encarnacion becomes the highest paid player (annually) on the 40-man roster. The contract is standard, with no back-loaded guaranteed money (and no performance incentives) (Pending)
The Indians lose the 25th pick in the June first-year player draft.
Not counting the arbitration eligible players whose contracts have not yet been offered, the current payroll obligation sits at $68 million but will project to the $98 million mark before the season begins. This, of course, is if they don’t sign anymore free agents.
The lack of the extra year makes it extremely beneficial for the Indians as it gives them the peace of mind that they didn’t get with either the Nick Swisher contract or the Michael Bourn contract.
Both of those deals were four years plus a club option. At three years plus an option, the Indians are paying more per year, and that’s OK. Everyone who saw how those two deals play out is just fine with that trade-off. Year four for both of them was supposed to be 2016, and neither suited up with Cleveland for even an inning of a major league game.
Good For The Indians And The Game Of Baseball
The Indians, who ranked 28th in home attendance last season, reached agreement on a three-year, $60 million contract Thursday with Edwin Encarnacion. The signing is also great for the game of baseball as The Athletics, who ranked 29th, also were prominent in the bidding.
Are low-revenue teams are on a level playing field with their high-revenue counterparts? No, but the sport’s economic structure never will be like the NFL’s, not with local revenue playing such a prominent role. But in special cases, things like this can happen. And Encarnacion, it turns out, was a special
At one point this offseason, it was written that the Indians might be in position to sign Encarnacion due to the extra revenue they generated by reaching Game 7 of the World Series and the recent addition of a new ownership partner, John Sherman.
The agreement with Encarnacion isn’t that much of a departure for the Indians, who signed free agent Nick Swisher for only $4 million less and Michael Bourn for $12 million less in the same 2012-13 offseason. Credit must be given to the Dolan’s as they still had to extend beyond their normal comfort level, and the breakdown in Encarnacion’s talks with the Blue Jays gave them the opening they needed.
Encarnacion never wanted to leave the Jays. But once he and his agent, Paul Kinzer, rejected the team’s four-year, $80 million offer, the landscape shifted dramatically. Never mind that Encarnacion ranked second in the majors in home runs and sixth in OPS the past five seasons. His age, he will play next season at 34, worked against him. So did the attachment of a qualifying offer and a number of other factors:
- The Jays surprised the Encarnacion camp by pivoting quickly to another free agent, Kendrys Morales, signing him for three years, $33 million.
- The new collective-bargaining agreement included smaller-than-expected increases in the luxury-tax threshold, limiting the spending power of the Red Sox and Yankees, both of whom otherwise might have pursued Encarnacion.
- Finally, the glut of right-handed hitters on the free-agent market left clubs with more affordable alternatives; expect the Rangers to grab one of those options, Mike Napoli, in the coming days.
In the end, Kinzer and Encarnacion lost $20 million in guaranteed money. Their deal with the Indians includes a $25 million club option that could raise the total value to the original $80 million the Jays offered. But what are the odds that the Indians will exercise that option for EE’s age 37 season?
It’s reasonable to suggest that Kinzer should have worked off the Jays’ initial offer, or at least figured out a way to keep them involved. But the Jays sure didn’t act like they wanted to stay involved. They made Encarnacion an offer they thought was fair, then, unlike the Dodgers, who remained engaged with Justin Turner and Kenley Jansen, moved on.
Encarnacion still came out OK; even if the Indians decline his option, he could sign with another club at a salary that still might get him within reasonable distance of $80 million over four years. What’s more, he landed with a more accomplished club, one that is in position to repeat as American League champions.
Implications On The 25 Man Roster
If left fielder Michael Brantley returns after playing in only 11 games last season, then the second-best offense in the AL will be that much better. And the pitching, without Carlos Carrasco and Danny Salazar able to start in the postseason, still was nearly good enough to help the Indians win the World Series.
Here is one possible lineup:
Jason Kipnis, L
Francisco Lindor, S
Brantley, L
Encarnacion, R
Carlos Santana, S
Jose Ramirez, S
Lonnie Chisenhall, L
Yan Gomes, R
Tyler Naquin, L
The rotation is the best in baseball when healthy. This is it, the Indians window to win their first Series since 1948. Santana and reliever Bryan Shaw are free agents after 2017, Miller after ’18. And while Carrasco is under control through ’20 and Corey Kluber through ’21, the two will pitch next season at 30 and 31, respectively. It would be a mistake to expect them to remain healthy and effective for the rest of their contracts.
Ownership endorsed the additions of catcher Jonathan Lucroy as well as Miller at the non-waiver deadline last season. Lucroy thwarted the plan by invoking his no-trade clause to Cleveland, but Miller cost $9 million per season and now Encarnacion will cost $20 million per, plus the 25th pick in the amateur draft as mentioned above.
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