Last year around this time I wrote a piece arguing for the Indians to sign their flame-throwing starter, Danny Salazar, to a contract extension. The Indians pioneered the practice of buying out young players’ arbitration years and signing them to very team-friendly contracts in the early 90’s, when John Hart was cultivating the powerhouse teams that owned the central division from 1995 to 2001. They have continued this practice (as has most of Major League Baseball) through the current era, with young stars like Carlos Santana, Jason Kipnis, Michael Brantley, Carlos Carrasco, etc., signed to very favorable extensions.
With this Indians coming off a great, albeit heartbreaking, finish to the 2016 season, it is once again time to take stock of the Tribe’s future and a vital component to the Indians’ future will obviously be strong starting pitching. The Tribe rode strong pitching, both starting and relief, through to the 7th game of the World Series. While I still have not emotionally recovered from what transpired this past fall, 2017 figures to see the Indians looking to compete once again, and potentially beyond next season as well. Key to the Indians’ future success will be the front office’s ability to keep young talent on the team beyond the next few seasons once this current core of Brantley, Kipnis and Santana move on. Leading candidates for the “next core” of young stars begins with Francisco Lindor and Salazar.
Danny Salazar is entering his first year of arbitration eligibility this off-season, and he’s entering at a somewhat precarious time because of the health issues that plagued him throughout the second half of last season. 2016 was a tale of two halves for Salazar. The first half of the season saw Salazar dominating the American League. As the All-Star break neared, Salazar’s name was being thrown around as a potential Cy Young Candidate and he was a shoe-in for the All-Star game. Through the first half, Salazar posted a 2.75 ERA, was striking out 10.15 batters per 9 innings, and limited his home runs allowed to 0.77 per 9 IP. However, as the All-Star game approached, it was revealed that Salazar would not be able to pitch in the game because of “elbow discomfort.” No two words can inspire more doom and dread for a baseball fan than hearing that one of the team’s best pitchers is experiencing “elbow discomfort.” Those two words lead to one major assumption… Tommy John surgery.
August was a disaster for Salazar and by mid-September the team placed him on the Disabled List because of a strained flexor muscle in his forearm. I’m no doctor, but from what I’ve read this is a much more preferable injury (if such a thing exists) because it shows there is no ligament damage, which could necessitate Tommy John surgery. Salazar did return for the World Series and pitched reasonably well in his very limited time. So, what does this all mean for Salazar and the front office’s position on an extension?
While arm injuries of any kind are terrifying for a pitcher, all publicly made indications right now point towards Salazar being able to return to form next season without having to go under the knife. Assuming this is in fact the case (and that may be a big assumption) the Indians should dive head first into a contract extension negotiations with Salazar. According to Baseball-Reference, Salazar is Super 2 eligible because he has accrued 2.162 years of service time, meaning he will have four years of arbitration eligibility rather than the typical three.
It is anticipated that Salazar will earn somewhere around $3.7 – $4.0 Million in arbitration this season, likely near the lower end considering the Indians traditionally agree to contracts that are more team-friendly. Given this starting point, Salazar’s fourth year of arbitration eligibility could easily be between $15-$20 million if we take into account inflation of salaries and his potential for improved performance. Breaking this down in a completely off the cuff and purely estimated basis, assuming he stays healthy and performs well, if his first year of arbitration leads to a $3.8 million deal as projected, year two could see roughly $7.0 million, year three could be $10-$11 million, year four $15 million. It’s not unreasonable for these numbers to become a reality given his potential and performance prior to this point. That would lead to the Indians being on the hook for $37 million. If there is one team who would want to avoid shelling out this kind of money when it could potentially be avoided, it’s the Indians.
Last year I opined that if the Indians are to sign Salazar to an extension it would be in the 5-year $20-25 million range, with options for 1 to 2 years. I would maintain similar numbers could be in order this time around. The Indians are well aware of how risky contract extensions can be (see Grady Sizemore, Travis Hafner, Jake Westbrook). We are unlikely to see the club sign Salazar to a 7-year extension, the most likely scenario in which that length of control occurs is through some form of options in the contract. I could see the Indians discussing a 4-year deal around $25-$28 million, with options for 1 to 2 years, giving him an extension similar to teammate Carlos Carrasco’s. Given the fact that Salazar didn’t take nearly as long to become a successful MLB starting pitcher than Carrasco, it’s reasonable that the front office would consider offering more money.
Contract extension prognostication involves a substantial amount of assumption making and estimation. The Indians have been burned by bad extensions in the past and they’ve also committed highway robbery with some of the deals they have made. If the team were able to lock Salazar up for the rest of his arbitration years with a deal that was less than $35 million, I would consider that a coup. At this point, there hasn’t been a whole lot of information coming out of the front office this off-season so it’s not quite clear what the team’s exact plan is. Hopefully it involves ensuring Salazar’s roster spot on the cheap for a few more years.