The Indians may play their games in the American League, but during the off-season, they might as well be a AAA team. Many fans feel slighted, bored or disappointed by the lack of moves made during free agency, but the free agent market is only for the Major League contenders. While many players have signed already this season, they have been to a very small amount of teams. Of the 17 players to sign for at least $10M before the start of the Winter Meetings, two or more signed with the Tigers, Red Sox, Orioles, Dodgers and Blue Jays. Outside of these, the only players to sign for $10M or more per season went to the Cubs, Giants and Diamondbacks.
The market for high end free agents is incredibly small. Only ten teams began 2015 with a pay-roll above $125M and a couple of these teams, the Nationals and Phillies in particular, have spent mostly internally. Every team that has signed more than one free agent was among the group that spent over $125M last year, except the Orioles (who only resigned their own free agents) and only the Cubs and DBacks were below that mark of all who signed a player to a deal of at least $10M per year.
The $125M mark from 2015 is an interesting barrier to look at as the average team cost almost exactly $125M, but only the top third of teams spent this much individually. Along with one third of the teams making up one half the money spent in baseball, the top five teams (16.7%) spent 27.2% of player salaries. This number will almost certainly be even higher in 2016 as the top team, the Dodgers, have already added Hisashi Iwakuma and Brett Anderson for more than $60M total over the next three years.
To look at the Indians more closely, their salaries have essentially maintained for the past fifteen years. They have never been players in the free agent market and outside of the 2001 season, where some superstars were in their final years of arbitration, the Indians have been between $34 and $88M each year since 2002. Below is a look at the team salaries in the AL Central over the past five seasons as well as the highest and lowest in baseball outside of the Central.
From 2013 to 2014, the Indians, White Sox, Royals and Twins were all essentially at the same level of pay, averaging $89M between them. Since then, the three non Cleveland based teams have increased spending slightly, but compared to the top spenders, these teams are still aren’t even in the league as those at the top. Even the Tigers spent almost $100M less than the Dodgers in 2015, an amount greater than the salaries of nine teams including the Indians.
At the same time, those limited teams on top are spending like crazy. While there is enough money for those on the bottom to spend a little, like said above, they can generally only afford one superstar level player. Take the Twins for example. They have four players in what is now the average, slightly above replacement level contract between $8 and $15M, but only one in superstar range above $20M. That player is Joe Mauer, who Minnesota went out of their comfort range to retain after losing Justin Morneau. A team like the Yankees or Red Sox would never have to worry about losing any long term veterans, but the Twins had to make a choice. It turns out, that choice was probably the wrong one. Since signing, he has been worth just an average of 2.9 WAR per season, had to move to first base (where he is less valuable than catcher) and missed considerable time to injury.
It seems many teams have at least one of these guys and most of the time it winds up being a mistake. If you can’t afford more than one megacontract, you probably can’t afford any. The Phillies are perhaps the perfect example of this, although they are more of a mid spending team. By retaining a couple superstars, including Cole Hamels and particularly Ryan Howard, they have completely undermined their ability to rebuild. While it would have been a bad look to allow Howard to leave after five straight play-off appearances, but since he signed the deal in 2012, they haven’t returned again and Howard’s $25M has been worth a total of -3 WAR over the past four seasons and he still has a minimum of $35M owed for the next two seasons. Going into 2016, Howard’s $25M is almost half the Phillies $54.8M guaranteed salaries and his $10M buyout for 2017 is almost half of their salary obligations for that year as well.
Just for fun, the above charts show the current breakdown of their expected 2016 roster by dollar. Arbitration amounts are based off MLBTrade Rumors predictions and the final 11 roster spots are averaged to $600K as we can’t know what they will be until much later in the off-season. The difference between the two is to show what happens when you add in a free agent on a $25M deal. Assuming the Indians would be willing to actually pay the extra money, that player would be making more than a quarter of the total team salary and that could be a problem.
During the 2015 season, there was obvious discontent in the locker room that completely manifested itself after the trade of Nick Swisher and Michael Bourn. The two veterans who never established themselves in Cleveland wanted to be team leaders simply because they were older or paid more than the rest. In similar fashion, Indians fans expected them to be the top producers on the team and others on the roster couldn’t have been happy about making a significantly lower amount than two guys who were very literally the worst players on the team at times.
The chart above could be one of the the most telling in baseball. The columns in red are money, the blue is value to the team on the field. Using the same salary numbers as above compared to their 2015 production, it is incredibly obvious that that small section of money devoted to prearbitration eligible players is creating the vast majority of production on the field. These players, like Francisco Lindor, Roberto Perez, Danny Salazar, Trevor Bauer and Cody Anderson are not replacement level players just because they are being paid like them. The older players provide value as well, but cost more and free agents cost even more.
Based off the Indians, you may think that in baseball, there is nearly a 1:1 ratio between dollars spent and WAR, but in today’s free agent market, that’s very far away from the truth. In actuality, most low level free agents are getting between $7 and $10M per win added while the top players are getting less per win, but more total. You can imagine throwing one of those deals on the chart above. You would have to extend the top, as even the most mediocre of free agents are currently commanding salaries above $15M per year, but what they aren’t doing is providing the value of the younger players.
For everyone bellyaching about the money players are getting: It’s their fair share. Baseball is swimming in cash. This is how it should be.
— Jeff Passan (@JeffPassan) December 5, 2015
Passan said this last week in response to the huge deals signed by David Price and Zack Greinke and spoke to some Indians fans specifically to say their team is included as well. Even assuming Cleveland is pocketing the values others are spending like crazy now, it’s hard to believe they have enough to raise the total team salary above $125M and it wouldn’t take too many mistakes to place the Indians in a Phillies like place where they can’t afford to field a full roster thanks to one or two mega deals.
Essentially, this is not to give the Indians an excuse as to why they shouldn’t sign players to giant deals, but it does provide some evidence as to why they don’t. It also shows why they are extremely hesitant to trade a pitcher. At the moment, they are getting similar value to the best pitchers in the league for less than $6M per year compared to deals like Greinke for $34M per year. If they did trade a starter, they would be then forced to replace the player internally (less production) or externally (higher cost and less production).
Since the Indians aren’t in the same financial league as some of the rest of the league, they have learned to dominate their own league. They are among the best in the league in getting value for their dollar and unless something major happens in the financial distribution of the league, they will have to be or relegate themselves to fringe Wild Card contender for the rest of the franchise.