Recent Benchmark Will Impact Justin Masterson Negotiations

Aug 1, 2013; Cleveland, OH, USA; Cleveland Indians starting pitcher Justin Masterson (63) pitches against the Chicago White Sox at Progressive Field. Mandatory Credit: Ken Blaze-USA TODAY Sports

Can Justin Masterson and the Indians Find Common Ground?

In the overall scheme of things, it probably doesn’t matter that the Indians signed Justin Masterson. They may have saved a million dollars, plus the cost of however many plane tickets they would have needed to go to the arbitration hearing, but Masterson was going to be here this season either way. Signing him now will have little impact on whether he signs a long-term deal beyond 2014.

So now the Indians need to decide how much they are willing to invest in Masterson over the long-haul.

It seems that the deal Homer Bailey signed with the Reds will serve as a benchmark for Masterson’s negotiations. If that deal is for six years and $105 million, Masterson will be justified in assuming that he can get at least that much as a free agent after this upcoming season. It would be silly to assume that the Indians will get any sort of hometown discount, so the decision becomes quite simple for the Indians: is Masterson worth 16-18 million dollars a year for five or six seasons?

Aug 23, 2013; Cincinnati, OH, USA; Cincinnati Reds starting pitcher Homer Bailey (34) reacts to a pitch call during the second inning against the Milwaukee Brewers at Great American Ball Park. Mandatory Credit: Frank Victores-USA TODAY Sports

Let’s be clear: in today’s market, a true ace on the open market can easily earn close to twenty million dollars per year. Ten major league starters made more than twenty million last year; a couple of others have signed deals that will put them in that category next year. Bailey, for example, would never come up in any discussion of elite pitchers, and he is poised to earn nearly that much. So there are two questions:

1. Do the Indians consider Masterson a true ace?
2. Are they willing to spend what it takes to keep such a pitcher?

As to the first question, Masterson ranked 19th in the American League in WAR, 15th in ERA, and twelfth in WIP. 62% of his starts were quality starts; by comparison, ten American League starters were about 70%. By those measures, it is difficult to argue that Masterson is one of the ten best starters in the league. In addition, one must remember that 2013 was the best year of Masterson’s career. He was terrible in 2012 and decent in 2011. It may be prudent to see how Masterson pitches in 2014 before deciding to pay him like an ace.

Of course, a good year will only drive his asking price up higher.

Based on his 2013 stats, and the lack of a consistent track record prior to that, Masterson will probably not be in position to get a deal worth 20 million dollars per season as a free agent, unless he takes another step forward in 2014. However, something in the neighborhood of 16-18 million dollars is not unlikely. Bailey’s deal and the one signed a year ago by Anibal Sanchez with the Tigers (five years, 80 million) are probably good benchmarks for what Masterson can expect. Which comes back to our second question: are the Indians willing to spend that much?

Well, Nick Swisher will make fifteen million this season, and will continue to do so for two more seasons, the last of which he will play at the age of 35. If Masterson were to sign the same deal that Sanchez did, he would be making sixteen million in the season he turns 35. One can argue whether it is riskier to pay a pitcher or an everyday player big dollars in their mid-thirties, but pitchers who can strike out nearly two hundred batters are harder to find than hitters who can hit twenty home runs, and the market reflects that scarcity.

June 3, 2013; Bronx, NY, USA; Cleveland Indians starting pitcher Justin Masterson (63) pitches during the first inning against the New York Yankees at Yankee Stadium. Mandatory Credit: Anthony Gruppuso-USA TODAY Sports

Masterson has been durable thus far in his career, which make such a deal somewhat less risky. Also, by 2019, when he would be in the final year of such a contract, number three starters will probably be making sixteen million. My guess is that if Masterson were willing to take such a deal, the Indians would be willing to pay it, although the fifth year may give them pause. The way MLB revenues seem to be trending, even a small market team like the Indians should be able to fit such a salary under their budget.

However, Masterson will probably seek to use Bailey’s deal as a benchmark in his negotiation. This is entirely sensible on his part since his numbers compare favorably with Bailey’s.

So, is the extra 2-3 million per year enough to make the Indians say no, especially with the sixth year?

In a vacuum, the additional money won’t make or break the finances of the team. But to some degree this is like buying a house; each side has a line that they won’t go past, and if those lines don’t cross a deal won’t happen. My sense is that sixteen million a year comes pretty close to the line for the Indians; if Masterson wants much more than that they are likely to let him walk.

Is that the right move? I believe the Indians could afford to pay Masterson 18 million. However, this is only a good move if Masterson is truly an ace (yes, I think the Reds paid too much for Bailey). Masterson’s 2013 numbers put him on the verge of ace status, but not quite. Since 2013 is the only season where Masterson approached this status, I would need to see an even better season in 2014 before I committed to the type of deal it will take to keep Masterson in Cleveland.