The Most Team-Friendly Contract in Baseball: Jose Ramirez

Cleveland Indians fans are all too familiar with the realities of pulling for a small market baseball team. 2007 American League Cy Young winner C.C. Sabathia was traded the next season, a deal which netted Michael Brantley. 2008 American League Cy Young winner Cliff Lee was dealt the next season, a move which netted Carlos Carrasco. These moves, while ultimately positives, were met with sincere disdain for Tribe ownership, perpetuating narratives about ownership’s willingness to invest in their franchise.

While the last couple years have seen the Indians a little more active in free agency, financial limitations are still intact. Carlos Santana might be departing for greener, as in the color of money, pastures. Bryan Shaw’s open market price will far exceed the Indians comfort zone. Though the Indians are poised to contend, they’ll have to grit their teeth through December as pivotal components are wined and dined by other clubs. Resource allocation becomes paramount and is decidedly an area in which Indians brass has found great success.

Corey Kluber’s deal is laughably cheap, yet somewhat understandable. Though Kluber was sporting new Cy Young hardware at the time of the extension, he was nearly 28 years old thanks to a late welcoming to the majors. It is understandable in the sense that a major league pitcher nearing 30 eyed the deal presented and caved to the idea of a safety net that would protect his earnings should an unthinkable arm injury occur. Kluber, though, does not have the most team-friendly contract in baseball, mostly due to questions about age and health.

The title of most team-friendly contract in baseball belongs to infielder Jose Ramirez. His contract is set up as follows:

  • 2018 – $2,428,600
  • 2019 – $3,750,000
  • 2020 – $6,250,000
  • 2021 – $9,000,000
  • 2022 – $11,000,000 (team option)
  • 2023 – $13,000,000 (team option)

This contract, signed in March 2017, allows the Indians to control six peak Jose Ramirez years for well below market value. Without the deal, a player like Ramirez would have fetched much more when he was initially supposed to hit free agency, following the 2020 season. 2018 would have been his first year of arbitration and would have allowed for a much higher salary than this long-term deal, thanks to his MVP-caliber 2017 season. Sure, you could play the card that no one saw his 2017 coming, but even if he produced at the clip he did in 2016, his 2018 arbitration salary would likely have outweighed the money figure in the deal he signed.

When comparing this contract to others across the league, the degree to which it is team-friendly becomes glaringly obvious. Aaron Judge still has two pre-arbitration years remaining but will likely surpass Ramirez’s totals in the arbitration years, and that extra year of free agency will probably match Ramirez contract in total alone. Jose Altuve has two dirt cheap option years remaining but will cash in big when he hits free agency after the 2019 season. Simply, having a young MVP candidate locked up for three years beyond arbitration, especially at such a low rate per year, is a major coup for the Indians.

The incentive for signing this deal on the Jose Ramirez end is two-fold. First, he was not a signing bonus baby. As a 17-year-old non-prospect, he inked with the Indians for a mere $50,000 boon, paling in comparison to highly regarded international teens. As a result, that cash cow that sustains other young talent was not present throughout his days of meager minor league pay. Hitting the major leagues bumped him up to league minimum salaries in excess of half a million dollars but the eyes on the payday prevailed. Presumably, the payday was long awaited. Second, an added benefit to signing years of free agency away is the guarantee. If injury or poor play, however unlikely, were to dispel Ramirez’s abilities, the safety net provides financial assurances throughout the remainder of the deal.

By agreeing to this extension, Jose Ramirez did the Indians a huge favor. Players of his ilk fetch six-figure deals on the open market. With the average win above replacement costing around eight million dollars, projections value Ramirez in excess of thirty million dollars next season. Sure, arbitration salary would have been only a few million dollars, but it speaks volumes about the level of surplus value the Indians are receiving.

Ramirez should have waited, at least one year, to sign a deal of this sort. Mortgaging away arbitration years is fools gold for a healthy player entering his prime earning years. Had he waited one more year, there is little to no chance he agrees to a deal that takes him three years beyond team control. There is little risk from the team side on this proposition. With Ramirez’s plate profile, it’s difficult to envision a scenario in which this contract ever looks ugly, barring injuries. Further, betting on a 25-year-old like Ramirez’s health would be enticing to anyone, even the risk-averse.

A no-brainer for Chris Antonetti and Mike Chernoff, Jose Ramirez will be cheaply controlled through 2023 thanks to a perplexing decision from Jose Ramirez and his agent, Rafa Nieves. Indians fans will reap the rewards for years to come.