I’m going to start this the same way I started my argument about the Cleveland Indians adding a center fielder…
The Indians made it to extra innings of Game 7 of the 2016 World Series with their current roster. The opportunity to add a player like Edwin Encarnacion is certainly exciting, but if it fails to materialize, this is still a team that won 94 games and almost the World Series. All that has happened since then is their two rivals in the division pressing the rebuild button. So if the Indians fail to make a large move this offseason, it can be disappointing, but shouldn’t change the fact that they should be very good in 2017.
That being said, Edwin Encarnacion represents a very unique opportunity for the Tribe.
I do not need to spend much time talking Tribe fans into Encarnacion. He has averaged 4.2 WAR over the last five seasons. He hit 42 home runs and 127 RBIs last season. He doesn’t strike out at an extreme rate like many power hitters, and knows how to take a walk. These are both traits that play up in the Indians’ contact-heavy lineup. He’s a great player. My voice gets a little higher just talking about him in a Tribe uniform.
Carlos Santana can play first base or designated hitter, but the Tribe is devoid of a partner for him. The Tribe’s farm system has injected the major league club with an influx of talent of late, with Francisco Lindor, Jose Ramirez, Tyler Naquin, and Roberto Perez playing major roles during 2016. The farm system also looks to graduate outfielder Bradley Zimmer and utility man Yandy Diaz during the 2017 campaign. But the first base and designated hitter are areas which are lacking in Indians’ current farm system.
This need is exacerbated by the fact that Santana is in the last year of his contract. So the Indians not only need a first baseman or designated hitter this offseason, but will need two going into next season as well.
Stop me if you’ve heard this one before, but the Indians also have a need for right-handed hitters. We saw what adding Mike Napoli to the middle of the Tribe’s order did to balance out their lineup, and Encarnacion would be that on steroids. OK, not literally. Bad analogy. He’d be a great fit—how about that?
The Indians have to sign a player at this position this offseason, and the gap between Encarnacion and everyone else is very, very wide.
Due to the number of players available at the position, as well as a sudden increase in the demand for relief pitchers (thanks to the Indians), Encarnacion’s cost has been depressed from what would be expected. He turned down a four-year, $80 million contract from the Blue Jays, and reports indicate he will likely have to settle for much less than that this offseason.
Let’s say Encarnacion could be had at three years, $65 million. Assuming each win-above-replacement player (WAR) is worth $8-9 million on the open market, this contract should still provide surplus value. Even if you assume that due to age (Encarnacion will turn 34 prior to the 2017 season) and other factors (change in park, etc.) Encarnacion averages 2.5-3 WAR per year over the length of the contract, a contract at this level would still provide market value.
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Due to his age and the depressed market, Encarnacion is also likely to sign for only three to four years. At only age 34, the age curve is certainly a concern, but similar players have sustained success late into their careers. This shorter contract mitigates the risk to the Indians. Often, it’s the years, not the annual salary that forces the Indians out of the market on 4-win free agents. This is an instance where the shorter contract helps the Indians get out from under the deal if it goes the way of Nick Swisher or Michael Bourn.
Of course, this doesn’t account for the draft pick attached to signing him. The Tribe would have to forfeit the 25th overall pick, a value Terry Pluto speculated at $10-20 million. This certainly adds to the cost, and a team in a market like Cleveland certainly needs to value those picks and prospects more than others, but with the lack of any real replacements in the pipelines, the Tribe is likely going to have to spend inefficiently on the free agent market or through trades to fill this hole.
The Indians just added a minority owner. They made a deep run into the playoffs, hosting a number of home games which brought the team an influx of income. The team’s finances changed this offseason, and the way we expect to operate the team should also likely change to match. They have been clear in the past that they re-invest baseball earnings back into the team, so expecting an increase in spend after a year with increased revenue is not a “DOLANZ CHEAP” rant.
This is not to expect the team to deficit spend. They have market constraints, and a payroll that organically increased due to contract raises. But as the ghosts of Chris Johnson fall off the payroll and as Santana nears free agency, the future should bring some small payroll flexibility.
There are also ways to shed salary without a massive negative impact to the roster. Bryan Shaw has pitched 282 innings over the last four years, is in the final year of team control, and due an estimated $4.5 million in arbitration this season. Lonnie Chisenhall is a solid contributor, but can likely be replaced with Naquin, Zimmer, Diaz, or Abraham Almonte. He is due an estimated $4.1 million this upcoming season. By shedding those two salaries, the team can save $8.6 million for this upcoming season without sacrificing much in terms of production.
The Indians operate in ways that are cautious and limit risk. When fans scream for trades and free agents, the front office must act more responsibly. I would argue this is a time when not taking advantage of market conditions would be the irresponsible thing to do. A player is available at a position of need at a discounted rate in a year when the Indians have an influx of revenue to pay that player. Sure, it’s a risk to tie-up future resources, but you also have to question if there will ever be an opportunity to use those resources in a more efficient way, or at a better time. Is future payroll flexibility an important asset three or four years from now when the rotation has aged out of their prime?
The time to strike is now. The Indians don’t need Encarnacion to compete for a World Series, but this is a unique opportunity to greatly improve those odds.