Offseason Journal: Gonzalez and prospects dealt for Luplow, Moroff

When I mentioned that the Indians were going to be active this winter, I didn’t mean this type of move:

The Indians acquired infielder Max Moroff and outfielder Jordan Luplow from Pittsburgh in exchange for utility man Erik Gonzalez and a pair of 19-year-old pitching prospects. Right-handers Tahnaj Thomas (No. 30 on the Indians’ Top 30 prospects list per MLB Pipeline) and Dante Mendoza will head to the Pirates’ farm system as part of the deal.

Parsing the comments by Chris Antonetti at the above link, it’s clear that the object of the trade was Luplow. With the Indians losing five major-league outfielders to free agency, they desperately need help there. And preferably affordable help. Luplow has less than a year of major-league service time (affordability), bats right-handed (potential platoon partner for Tyler Naquin if nothing better comes along), and can play all three outfield positions.

The issue of course is that neither Luplow nor Moroff has shown much offense at the major-league level. But then again, neither has Erik Gonzalez, the major-league player the Indians dealt. All three players have either good defensive scouting reports or good defensive results at the major-league level. As for what these three could do with regular playing time, we don’t know. Fangraph’s Steamer projects Luplow at 0.3 WAR with 237 PA, Moroff at 0.2 WAR with 85 PA, and Gonzalez at -0.3 with 196 PA.

Based on that, and given that Gonzalez is out of option years while Luplow and Moroff both one remaining, you can see why the Indians needed to include two very young prospects to make the deal work.  Both Thomas and Mendoza are teenage pitchers who threw in Arizona last summer. Thomas is the more highly regarded of the two, ranking #26 in Fangraphs’ post-2018 organization rankings (with a Future Value of 40). Given how young he is, and how risky pitching prospects are, that FV of 40 isn’t that bad at all. But any contribution he’ll make at the major-league level won’t be happening for at least another 3-4 seasons, while the two players the Indians get back will help in 2019…at least marginally.

For I don’t see either Moroff or Luplow being everyday players next year, unless something goes catastrophically wrong with the rest of the roster. Moroff is a middle infielder by trade, so even if he does replace Erik Gonzalez as the backup infielder, he’s not going to play much, not with Francisco Lindor and Jose Ramirez around. Even if Jason Kipnis is still here and playing second place, Terry Francona isn’t going to make a concerted effort to get him into the lineup. Likewise, Luplow, who as I mentioned above is the reason the Indians made this trade, at best looks to be a fourth outfielder, complementing the two starting corner outfielders, whoever they may be. And even if the Indians see some hidden upside in him, they just aren’t going to pencil him in as a starting outfielder given his major-league numbers (.640 OPS in 209 PA). It bears repeating that both players do have an option year remaining, so they could be beaten out at those reserve spots by others on the roster and the Indians would be able to keep them in the organization. So the team does get a bit more 25-man roster flexibility by deal the out-of options Gonzalez for two players who do have option years.

Here’s my latest 25-man/40-man roster, with both Moroff and Luplow projected on the major-league roster. The Indians still need to add 5.0 wins in order to get back to their 2018 totals, and have about $7M in payroll space to do it (see below for why this changed).

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Other roster notes:

Jordan Bastian confirms that Corey Kluber’s 2019 salary will be $17M, and also that his 2020 and 2021 team options will be more expensive as a result of his Cy Young Award finishes over the past couple years. This is reflected in the roster above, and shrinks the amount of “free money” to roughly $7M, assuming that the 2018 payroll is also the 2019 payroll.

I’ve also added to the roster the number of option years left on each player, using Roster Resource’s data. The number in parenthesis to the right of the player indicates the number of option years remaining. Past 5 years of service time, a team cannot option a player, so that’s why you don’t see any by veterans like Leonys Martin or Dan Otero. But teams can run out of option years well before a player accumulates 5 years of service time, so players like Danny Salazar, Neil Ramirez, and Tyler Olson also cannot be optioned. I don’t see Ramirez lasting the winter on the 40-man roster, but Olson might, so his status will be important next spring as the bullpen spot battles heat up.

 

 

Offseason Journal: Tradespace preparation

On Friday, the Indians declined to make Qualifying Offers to any of their pending free agents (Josh Donaldson was ineligible, as he’d been traded in 2018), including Michael Brantley, but even that wasn’t the most interesting news of the day.

This was:

Olney was also the first to report that the Indians weren’t going to tender a Qualifying Offer to Michael Brantley. The tweet above was followed up the following article at ESPN.com, which I recommend reading in place of the initial tweet. It gives a much better picture of what the Indians are signaling to the public. Assuming of course, that these leaks were intentional (which I believe they are). The Indians generally have been a tight-lipped organization, so something this frank is quite a surprise. But after thinking about, I understand why this leak happened.

This reporting is not designed to let other teams know what the Indians are planning, as Olney mentions that they had already told other teams about their general situation, but to prepare the fans for what otherwise may have been a shocking set of moves. I’m not sure that the Indians mentioned any of the named players specifically in the article, but you don’t have to be an insider to figure out what players are meant by “veterans”. Kluber and Carrasco are as valuable for their contracts as for their outstanding performance (not to mention the paucity of top-tier starting pitchers on the market), and Gomes and Perez are both admired for their defensive skills. Encarnacion and Kipnis are less valuable because of their contracts, but they are still good players. Kipnis in particular may be attractive for a team looking for a short-term fix at second base.

It has been my goal in this series of offseason posts to lay out the details of what the team faces this winter, and it’s nice to get as concrete a confirmation as you can have that my previous guesses are on the right track. I would have loved to have to heard the opposite from the team, that they were going to increase payroll another $20M or so in order to keep Michael Brantley and add at least one back-end reliever, but that doesn’t seem to be in the cards.

The Indians’ 2018 payroll was right in the middle of the pack of MLB teams ($136-137M, depending on which place you look), and it looks like that’s going to be a hard cap, at least for 2019. These aren’t the 00s clubs that routinely finished among the bottom ten teams in the league in payroll, but they aren’t the Yankees, Red Sox, or Dodgers, either. The Indians will be hosting the 2019 All-Star Game, so that should theoretically mean a bump in season tickets (as ASG ticket priority will undoubtedly be tied to them), not to mention revenue from the festivities themselves, but that’s probably only going to be a one-year bump. 2018 attendance actually fell a tiny bit from 2017 (thanks to a lot of early-season homestands), and that probably weighed more heavily in budgeting meetings.

But if the Indians were to shed payroll by trading a core player, they would risk entering into a payroll death spiral, with attendance falling precipitously as fans would see the loss of a familiar star rather than logic behind the move. That is why I think you saw the Olney story yesterday. The timing was such to explain not only the Brantley non-move, but also to prepare the fanbase for the types of moves that the Indians haven’t made since 2013. Over the last several years, the Indians’ roster has been remarkably stable, at least in terms of keeping the core together. They have let free agents go (Carlos Santana, for instance), but otherwise have not had any inclination towards trading a key player. If anything, they have acted more like a big market club in the past couple of years, readily trading top prospects for short and medium-term help(Andrew Miller, Brad Hand, among others), and even signing one of the more high-profile free agents of the 2016-2017 offseason (Edwin Encarnacion).

But eventually, as young players start to get raises, and as you buy more and more players at market rates, and as the revenue doesn’t rise as fast as the payroll does, a team like the Indians were going to have to make some difficult decisions. The reckoning comes quicker for a mid-market team than for a big-market club (coincidentally, the Cubs are in the same situation this winter), but lamenting about this disparity does not give you more money to spend.


A Sidebar: The (new) Qualifying Offer and why I think the Indians passed on Brantley

The 2017-2021 Collective Bargaining Agreement changed the Qualifying Offer process significantly, as its previous incarnation proved a millstone around the necks of many mid-level free agents. No longer do clubs signing a player who rejected a QO have to give up their first draft pick, among other changes that help free agents find new teams. To go into every single detail would bore practically every baseball fan, so I’ll just leave a link to this LGT article for those who live for roster and transactions minutiae. But there is one thing that is worth knowing in order to understand more about the Brantley decision.

  • A team receives a pick after the first round (#31-35) if the they receive revenue sharing (which the Indians do) AND the player receives a contract for at least $50M from another team. If the player receives a contract for less than that from another team, they receive in compensation a pick after the 2nd Competitive Balance Round, which has historically been in the #75-85 range.

So if the Indians thought that Brantley wouldn’t get more than a 3-year, $45M contract, their upside was getting in essence a third-round pick (along with its bonus money allotment). The downside would be Brantley accepting the offer, and painting the team into a corner. The 2018-19 Qualifying Offer is $17.9M, meaning that the 2019 Tribe payroll would already be $5M ahead of what it was in 2018 ($142M vs $137M). Now they do have the ability to cut salary via non-tendering arbitration-eligible players (such as Danny Salazar, who is set to make $5M), but they’d rather not have to do that, as just about everyone left on the roster are players that could help the team. It would also make it that much more difficult to get salary relief in trades (such as Jason Kipnis), as clubs would know the Indians have no room to negotiate.


With all that being said, here’s what the 2019 roster looks like if the Indians stand completely pat:

 

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I’ve replaced the 2018 bWAR actuals with the 2019 Steamer (Fangraphs) projections (fWAR), which is going to be more useful for players who didn’t get much playing time in 2018. For instance, Steamer projects Yandy Diaz to be worth 2.3 wins above replacement. Based on the Steamer projections, the Indians need to add 5.6 wins just to get back to their 2018 totals. And given the state of the AL Central last year, I don’t foresee it being as easy to earn those wins next year. On the salary side, the Indians can add $10-12M in payroll to reach last year’s totals. Given that WAR on the open market was worth $8-9M last year, the Indians aren’t going to be able to improve themselves much in free agency. That is why you are hearing these stories about trading a couple veterans to not only shed payroll, but improve the roster.

 

Offseason Journal: Carrasco’s option exercised, Guyer’s option declined

 

(live link to spreadsheet, with transactions list)

Today the Indians made decisions on two contract options. They exercised the 2019 option on Carlos Carrasco, which was as easy a decision as will be made this winter, but declined the 2019 option on Brandon Guyer, which was a bit a surprise to me, even taking into account the budgetary difficulties that the Indians will be facing this offseason.

The guaranteed portion of Carrasco’s contract ended in 2018, but the Indians have two team options that can keep him on team control through the 2020 season. The base value of the 2019 team option was $9.0M, but due to his fourth-place finish in the 2017 Cy Young voting, that option grew to $9.75M, but that’s still a tremendous bargain for an elite starting pitcher. As always, Cot’s Contracts (a great resource for transaction aficionados) has the details if you’d like to look more deeply into them.

Brandon Guyer’s situation is a bit simpler. The Indians had a single 2019 team option worth $3.0M, but instead they declined it, saving $2.75M in the process (Guyer will receive a $250K buyout). As Guyer now has over 6 years of service time, he’ll become a free agent in a couple days. I was surprised that the Indians declined the option because the $3.0M price tag, even for a role player, wasn’t high at all. The Indians certainly wouldn’t be able to sign a better fourth outfielder at that price, so that they elected to take the savings should tell you quite a bit about the budget uncertainties this winter.

From indians.com reporter Jordan Bastian:

The Indians front office is not going to let the public know what the actual salary limit will be, as that would hamstring in various negotiations throughout the winter, but declining Guyer’s option, as small as it was, does seem to be a sign that the team will be prioritizing savings in all forms in order to patch more important holes. The Indians don’t exactly have a stable of young corner outfielders ready to fill the role that Guyer played. Granted, Guyer’s role might not be needed by the time the Indians are done making moves this winter. Lonnie Chisenhall, who was Guyer’s main platoon partner, is also a free agent, and there’s no guarantee that Jason Kipnis will remain in the outfield next year (nevermind the roster). That makes this tweet make a bit more sense:

The outfield right now is basically a blank canvas. Center Fielder Leonys Martin is the closest outfielder you could term as a lock to be on the Opening Day roster, and he missed the last two months of the season to a life-threatening bacterial infection. So if the Indians do acquire two corner outfielders who happen to bat from the right side, there’d be no need for a Brandon Guyer. But even if that were so, they could have easily picked up Guyer’s option and traded him later should the outfield configuration have made him superfluous.

As opposed to the chaotic outfield, the rotation remains the bedrock of this roster, with Carrasco’s contract allowing the Indians to maintain one of the strongest starting staffs in baseball. A starting pitcher of Carrasco’s caliber would be worth at least double the $9.75M the Indians will be paying him in 2019, and the 2020 option isn’t that much different ($9.5M base rate, at $10.25M now and could jump higher based on where he finishes in the 2018 Cy Young voting). And the Indians don’t even have to make a decision on that option until after the 2019 season.

Offseason Journal: Setting the Parameters

 

The offseason begins today, and with it an avalanche of free agent speculation, trade rumors, and general strategic talk. I think the Indians will be much more active this winter than they have the last two offseasons, my basis for this being their 2018 performance (in both the regular and postseason) as well as the payroll itself.

I hope these two charts will clearly illustrate why I think this will be a wild hot stove season.

(Disclaimer: Past performance doesn’t correlate perfectly with future performance, both on an individual or a team level, this is just to illustrate the constraints the Indians find themselves in at this point in time.)

First, let’s look at the team’s performance in 2018.

(live version can be found here)

The above is one of my typical Excel charts listing the Indians’ 25-man/40-man rosters. There are a couple new things added that may be useful in providing some context that has been missing from these rosters: a comparison of total team Wins Above Replacement to the team’s competition in the American League. After all, what good is a statistic unless you have something to measure it against? I averaged the two flavors of WAR for each AL team, and ranked them at the bottom-right of the chart.

The Indians finished fourth in the AL by this measure, showing that if anything they should have had a better record (thanks, bullpen). The number used in comparison with the rest of the league is the total output of all players on the 2018 team, even those who had long-since been released by the team (the Oliver Drakes, the Alexi Ogandos, etc.)

I bring up these 2018 team numbers in order to focus the scope of offseason prognostication somewhat. I submit that if the Indians accumulate 50.6 WAR in 2019, they’ll make the playoffs again. Heck, they may make the playoffs if they hit 45.0 WAR if the rest of the AL Central continues to languish, but I don’t want to assume that, and neither should the Cleveland front office. Heck, if the competition in the AL Central gets better, it will be harder for the Indians to replicate that performance. So for the sake of this exercise, assume that the Indians will need to at least get to 50 wins above replacement.

This second chart concentrates more on the financial end of the equation.

 

The Indians ended 2018 with a roughly $137,400,000 payroll. The chart isn’t capturing the exact number, because the salaries of released players aren’t included, and many of the players on the list only made a partial salary (as they spent portions of the season making a minor-league salary), but it’s close enough for my purposes. Of that $137.4M salary, about $45M is going away via free agency, but a large portion of that savings is going to be eaten up by organic (arbitration and contract salary increases) growth.

To approximate the 2019 payroll if the Indians stand completely pat (letting all free agents walk, keeping everyone else), I’ve added back salaries for internal replacements for the free agents; for example, Tyler Olson/Neil Ramirez/Cody Anderson/Danny Salazar replacing the three free agent relievers plus Josh Tomlin. I calculate that the Indians, if they keep everyone on the roster that isn’t a free agent, will have an Opening Day payroll of $128,500,000, leaving the team about $9-10M to spend on bringing in new players if the salary budget remains the same in 2019.

Given that the free agents were worth 5.5 bWAR (and that includes the -0.9 bWAR that Josh Tomlin “contributed”), they aren’t going to be able to pay market value by signing free agents to make up for that lost production and be able to maintain their 2018 payroll (the market rate was between $8-9M/WAR last year). They should be able to replace some of that production with lower salary players (Yandy Diaz, for example, could help on that front as an everyday player), but there aren’t a lot of young players on the cusp of stepping into full-time roles. Maybe Tyler Naquin finally has a breakout season in right field, maybe Cody Anderson becomes the next Bryan Shaw, and maybe Danny Salazar becomes an elite closer, but I wouldn’t bet on all of these things happening.

So the Indians will need to both cut payroll and add talent. Cutting payroll could be as simple as non-tendering players like Danny Salazar, who is probably going to make $5M in arbitration, trading players like Jason Kipnis or Yonder Alonso in partial salary dumps, or even dealing core players like Trevor Bauer or Corey Kluber for total salary relief and young/talented players. Note that I’m not endorsing trading Bauer or Kluber unless the absolutely perfect deal comes around, but with the Indians’ circumstances, it’s a possibility. The Indians could also strip mine their farm system (where the talent is heavily concentrated in the lower rungs of the system) in order to patch the holes, putting all their eggs in the 2019-2020 baskets, all but ensuring the years after that will see a total rebuild.

One other thing to keep in mind is that several of the big market teams, after a couple years of restraint, are going to be extremely aggressive in free agency. The Yankees in particular are poised to spend wildly after having gotten under the luxury tax threshold in 2018 (thus avoiding a 50% surtax). That will affect not only the big names in free agency, but will have a trickle down effect on the lower tier free agents. That will make things more difficult for a team like the Indians to spend in free agency, but it might also make players like Kipnis and Alonso more attractive to teams that don’t want to spend the big bucks on a free agent.

So buckle in, Tribe fans…it’s going to be an interesting hot stove.