The Diff: Looking at extension examples for the Indians and Jason Kipnis

The Diff

The Diff is your weekly WaitingForNextYear look into the amazing world of sports statistics. For a complete log of articles over the last 12 months, click this link.

The Diff

This week has generally been an exciting one for Cleveland Indians fans. Beloved (yet probably overrated) outfielder Michael Brantley was signed to a long-term contract. The deal covered the Branley’s remaining arbitration seasons and guaranteed at least one free agency year. Many are thrilled about the team’s commitment to a fan favorite. With that deal out of the way, it’s now time to discuss the next young Indians position player extension candidate: 2013 American League All-Star Jason Kipnis. This deal might not be so easy to negotiate.

The necessary background

Jason Kipnis is a soon-to-be 27-year-old second baseman who just earned his first All-Star nod in 2013. The Chicago native comes from a very high-upside pedigree and was a second-round pick in 2009 out of Arizona State University. He cruised through the minors – skipped mid-Class A entirely – and played no more than 92 games at any one level. He made his major league debut in late July 2011.

In 337 career major league games since, Kipnis has established himself as one of baseball’s best second baseman. In just over two full seasons of play, he has a .270/.349/.424 hitting line with 67 doubles, 38 home runs and 66 steals. He is generally regarded as an average-ish defensive player. He has 11.0 wins above replacement, according to Baseball-Reference.com.

Pertinent to the overall topic of an extension, it is necessary to know that the consideration of a Kipnis deal isn’t just all blogosphere rumor-starting. There have been several confirmations of such talks.

Last March, reports circulated that the Indians indeed were talking to Kipnis’ camp about a possible long-term extension. FOX Sports’ Ken Rosenthal mentioned it in the same article along with extension talks with Brantley. Those extension discussions were eventually unsuccessful, as MLB Daily Dish’s Chris Cotillo reminded us during the December Winter Meetings.

Then, two weeks ago, the Indians media again reported that negotiations could restart during spring training this year. Likely, however, the talks wouldn’t carry over into the regular season.

By not reaching a deal last season, the Indians are likely looking at getting less of a value for Kipnis this time around. One season ago, he had not yet had his breakout year of 5.9 WAR and the ever-important All-Star designation. A pre-2013 agreement would have been riskier for the team, but now it will be much more costly per year. Now, Kipnis enters the middle of his prime and negotiations could get tricky over the true value of his future play.

MLB.com’s Jordan Bastian spoke with Kipnis earlier this week about the topic and what he saw in the Brantley deal. Here was one quote about re-opening extension talks.

“Why would I not listen?” he said. “Yeah, I’m open to hearing what they have to say or what they have to offer. It’d be stupid not to. I know they’ve got some arbitration cases to finish right now. I think once everyone’s done with that and spring starts flowing along, we’ll start talking again. Of course I’ll listen.”

Of course, the Indians do have a substantial history of finalizing similar deals with players early in their careers. As the most recent poignant example, can easily take a look at the creative contracts given to position players Asdrubal Cabrera and Carlos Santana in April 2012. The maneuver was a staple of GM John Hart’s teams in the ‘90s. Brantley then was able to work out a deal exactly one week before his first scheduled arbitration hearing.

The relevant comparisons

Both for arbitration and arbitration-overlapping extensions, it’s necessary to create a set of comparable players and signed contracts. This will help in estimating a ballpark figure for a Jason Kipnis deal.

In January, Let’s Go Tribe looked at other MLB players that have recently signed long-term extensions one year before reaching arbitration eligibility. That is Kipnis’ status right now. The four players analyzed: Andrew McCutchen, Starlin Castro, Allen Craig and Cameron Maybin. They have a variety of ages and backgrounds, but the research provides some solid information on very recent examples for Kipnis.

Around the web, Beyond The Box Score, MLBTradeRumors, Grantland and FanGraphs have all written thousands of words on Kipnis’ value within the context of the game. I’d recommend reading back through all of these great articles.

For this article, I looked into the top six second baseman deals per annual salaries and the process leading up to those deals. All six of these deals have occurred within the last decade. All six players are still active today. Because of his standout 2013 season, Kipnis’ camp is sure to use these deals as sample discussion points in negotiations.

All but one of these six players reached a long-term agreement – including at least one free agency year – before an arbitration hearing. They played for a variety of teams and have had differing levels of success since signing their big contracts, but they provide a great sample set for comparison. Below is a chart of their year-by-year MLB trajectory. Then, I’ll share their individual stories. (Click to enlarge the image below.)

mlb second basemen

The player profiles

Chase Utley: The oft-injured Phillies star had one of the best primes for any second baseman in MLB history. He was absolutely sensational from 2005-10 – he averaged 7.6 WAR per season – yet was never top six in MVP voting. His career has largely been hampered by injuries ever since.

In January 2007, just before arbitration, he signed a massive seven-year deal for $85 million that covered all of his arbitration eligibility and four free agency seasons. In August 2013, despite the injuries, he then signed a base two-year extension for $27 million that guarantees his 2014 and 2015 salaries. Then, this current deal carries individual one-year vesting options at $15 million annually for 2016-18.

Brandon Phillips: Remember him? The former Expos prospect’s MLB career got off to a disjointed start, of course. His first full two seasons were 2003 with Cleveland and 2006 with Cincinnati. Because he was so young when he first got started in Cleveland, he was still fairly young comparatively for free agency.

After his breakout 2007 season, he signed his first contract in February 2008 on the verge of arbitration. It was a base four-year deal for $27 million. It guaranteed his first free agency season and had an option for the second. Then, in April 2012, he signed a new deal, replacing his already picked-up team option for that season. This was a six-year extension for $72.5 million that runs through the 2017 season.

Robinson Cano: This Dominican Republic native became one of baseball’s biggest superstars because of his brilliant seasons with the New York Yankees. He made his MLB debut in early 2005 and has been one of the game’s best players since and especially over the last five years.

He agreed to his first deal in January 2008. It was an option-laden contract worth up to a six-year deal for $55 million. It covered his four seasons of arbitration (since he was a Super Two) and had options for the first two years of free agency. After picking up those options, he became a free agent this offseason. The Mariners then signed him in December 2013 to a historic 10-year deal at $240 million.

Dan Uggla: Remember when he was good? Uggla was viewed as one of baseball’s best infielders during his prime, mostly with the Marlins organization. Now, after his horrendous 2013 season with Atlanta, his contract is viewed as of the worst in the game.

Uggla’s first arbitration season of 2009 was handled in a hearing where he won his argument for a $5.35 million salary. He reached a one-year deal at $7.5 million for his second arbitration season. Then, after rejecting a deal from the Marlins, he was traded to Atlanta where he signed a five-year deal for $62 million in January 2011. This covered his final arbitration season and, unfortunately for the Braves, lasts through 2015.

Ian Kinsler: Although he played in supersized Texas, Kinsler has perhaps been one of baseball’s most underrated stars this decade. He’s a three-time All-Star and that’s probably two fewer than it should be. He’s now a member of the Detroit Tigers organization after the mega November 2013 trade that sent Prince Fielder to the Rangers.

In February 2008, one year prior to arbitration, he reached agreement on a base five-year deal for $22 million. It covered his three arbitration seasons and guaranteed the first free agency year. It carried a team option for the second. In April 2012, he then signed another five-year extension for $75 million. This replaced that previous team option for 2013 and carried through the 2017 season. There again remains a team option with a possible vesting guarantee for 2018.

Dustin Pedroia: This list has featured superstars synonymous with the Phillies, Yankees and Rangers. Pedroia is the archetype Boston Red Sox superstar of the 21st century, right alongside surprise success story David Ortiz. In just his second season, Pedroia won the 2008 MVP and has been a star ever since.

Following that MVP season, the two sides agreed to a base six-year deal for $40.5 million. Again, this was one year before arbitration and marked one of the largest dollar-figure deals ever for a pre-arbitration contract. This deal covered three arbitration seasons and guaranteed two free agency years, with an option for the third. Then, in July 2013, he signed another eight-year extension for $110 million, replacing his previous 2014 guarantee and stretching through the 2021 season.

The next steps

No matter what, in just a few years, Jason Kipnis will be paid a lot of money to play the game of baseball. His situation compares directly to a few of the second baseman examples above. But his deal is certain to be unique in its own way too.

On the ever-important topic of age, Kipnis compares most significantly to Chase Utley. As a long-time college player, Kipnis was already an old-ish 24 years old when he made his MLB debut in mid-2011. That means he’ll turn 31 right around Opening Day 2018, his first free agency season. That’s closest to Utley on this list. Four of the others were just approaching their 30th birthday upon free agency.

On career trajectory thus far, Kipnis is most similar to Ian Kinsler. Kinsler played a full slate of 120 games in 2006 as a mostly average player, but had 4.1 WAR in his sophomore season and was an All-Star in his 4.6 WAR junior season. Kipnis only played 36 games in his debut season of 2011. But then he had 4.0 WAR in 2012 and was an All-Star for his great 5.9 WAR year a season ago.

Among all of these players, only Dustin Pedroia made significantly more than the usual $500K major league minimum before reaching his arbitration years. He earned $1.5 million in his final pre-arbitration season of 2009 with his rare deal, but that’s mostly as a result of shockingly winning the 2008 MVP.

So Kipnis will again likely be paid the minimum for his baseball services in 2014. Based on the above examples and other research, here is my best projection for his year-by-year arbitration valuation: $4.5 million (2015), $7 million (2016) and $10.5 million (2017). That’s $21 million over three years. After that, he’s due to earn the full extent of free agency value in baseball, which is currently estimated to be about $6-7 million per WAR.

For both the Indians and the player, that means a fair base five-year extension – min. for 2014, arbitration for 2015-17, guaranteed free agency year for 2018 – would probably be about $35 million. Per usual, there likely would then be a team option and buyout attached to the 2019 season, his second in free agency. That would make the total guaranteed value closer to about $37 million.

Do I think this is likely before Opening Day 2014? I’d give it about 70% odds right now. Probably closer to 90% sometime before hitting the arbitration table in February 2015. The Indians have a long, long history of signing young position players to extensions. If Kipnis has another sensational 2014 season, his price tag will only go up further. That’s certainly going to be on the mind of Kipnis’ camp. And the Indians don’t necessarily have all that much leverage in these conversations.

In the next 3-5 years, the cost of a free agency win and arbitration control could go up substantially. That’s the pivotal reasoning for teams as they work to lock up young talent at controlled cost levels.

With the unknown future status of Justin Masterson, however, and expiration of the Nick Swisher and Michael Bourn contracts after 2017, one could question whether the Indians still will be a contender in 2018. That will depend heavily upon the next crop of upcoming minor league talent. Early indications and recent history suggest it might not be that impressive.

Regardless, Jason Kipnis is the best player on the Cleveland Indians. He was so in 2013 and as he enters his age-27 season in 2014, he’ll likely be so again. Teams do everything possible to sign such talent and control them for as long as possible. Now it’s just a matter of finding the magical dollar number. Looking at the past deals for baseball’s best second basemen helps as an easy guide for both sides.

Hat tip to Ed Carroll and Jon Steiner for their research feedback for this article.

  • mgbode

    great breakdown Jacob.

    I wonder how much it would cost to have random people subtly mention Uggla’s collapse during whatever few days we are in heavy negotiations. Would love to have Kipnis locked up so we don’t have to read about his contract for a few years.

  • Ed Carroll

    Not sure Uggla’s the best comp, but as Jacob points out, the Indians have approached him before about an extension, and likely will again. Might not happen this year, but I’d bet, barring an injury or trade, that an extension happens at some point between now and before his arb2 year.

  • EyesAbove

    Remember when there was some debate as to whom we should call up first, Cord Phelps or Kipnis?

  • mgbode

    :) you missed the joke. I was only saying that to remind Kipnis how fleeting production can be (so to make him more likely to want security). that’s all.

  • mgbode

    :) you missed the joke. I was only saying that to remind Kipnis how fleeting production can be (so to make him more likely to want security). that’s all.