Contracts & Salaries, Part 1: A Compendium

We all like to rant and rave about what the Tribe is or isn't doing in the offseason. Every team's personnel decisions are influenced heavily not just by player performance, but by existing contracts and salary commitments ? both for individual players and across the whole roster. This issues are often under-reported or misrepresented ? or simply misunderstood ? even by professional baseball writers.

This post is the first in a series that will give an overview of the Indians' roster situation for this offseason ? what decisions do they have to make, what decisions have already been made for them, what are their options, and what are the key business issues in each decision? We're going to start by breaking down the entire 40-man roster based on each player's contractual status entering 2006. The data is compiled from many sources, but I would be remiss if I didn't recognize Cot's Baseball Contracts, a tremendous resource.

Only players currently on the 40-man roster are listed, which notably omits Ryan Ludwick, Billy Traber, Jeff Liefer, Jason Young and Kyle Denney. Those five are still in our system (at the moment) but were removed from the 40-man roster in the past year. I don't expect any of them to be added back to it this offseason, with the possible exception of Traber.

This group is the core of most fan discussions and many front office decisions ? who to keep, and at what price, and how to replace them if we don't. The Tribe can offer any of these players arbitration, and if they accept, they are essentially contracted for another season with salary to be determined later. Arbitration generally is offered to free agents only in two situations: one, when the player is extremely unlikely to accept rather than opt for free agency (Millwood, Wickman), and two, when the player would be unlikely to earn an exorbitant salary even in arbitration.

Based on their reasonable 2005 salaries and good expectations for 2006, I expect the Indians to offer arbitration to all but Gonzalez and Hernandez. If a player leaves after being offered arbitration, the team he leaves often receives one or two quality draft picks as compensation, based on the quality of the free agent lost. I'll add this data once it's available. It's safe to assume that Millwood will be a Type A free agent (two high picks), and hopefully we'll also get a couple of B's and a couple of C's out of this group.

A mutual option such as Boone?s is not much different than having no option at all, since almost inevitably one side will decline it. It?s just a nice way for the two parties to say that they like each other. Riske is under contract for 2006, but only if the team chooses to offer him one, in which case his salary will be set in arbitration. The two sides can avoid arbitration by agreeing to a contract for one or more years.

You may notice that there is no mention of any 2006 options here. The Indians had 2006 options on Sabathia, Boone and Belliard. Sabathia's 2006 option was locked in as part of his contract extension back in May. Boone had a vesting option that would have triggered around Sept. 1; the Indians agreed to pick up the option preemptively in exchange for a $750,000 reduction in salary, a smooth move by the Tribe and a nice gesture by Boone. While there has been no official announcement about Belliard's option, Shapiro has stated publicly that it will be picked up.

Martinez will become a free agent in 2010 if his option is declined. Hafner, however, will not yet have enough service time to be a free agent in 2008 if his option is declined. The team can decline the option and offer him arbitration, and he is required to accept it. The same applies to Blake and Westbrook in 2007 (see previous table).

I try to look at these things unemotionally, but I have to say, that Hafner contract almost makes me weep with joy.

Sabathia, Westbrook, Blake and Hafner are all under guaranteed contracts at least for 2006. This means they already have set salaries and cannot be non-tendered. The other five players can be non-tendered or offered arbitration, or the two parties can agree to a set contract for one or more years. Bard?s arbitration status is not yet clear; he may have to wait until 2007.

Players with more than three years in the majors can't be assigned to the minors without their consent, regardless of how many option years they have remaining. Martinez is already under multiyear contract, even though he otherwise would not have been eligible for arbitration until the 2007 season. The arbitration year estimates assume that each player will be in the majors consistently starting in 2006. There are no guarantees of this, particularly for the likes of Tallet and Dubois. In their favor is the Tribe's need to replace free agents with inexpensive pieces. Any of the four players in the 2010 group could qualify in 2009 if he spends nearly all of 2006-2008 in the majors. The same goes can be said of any player added to the 40-man roster for the first time over the next year.

UPDATE: I updated a few details on the charts. Hafner's salary went up by $200,000 each year for 2006 and 2007, as well as the team option for 2008, for his top-five finish in MVP voting. Vazquez agreed to a set salary, avoiding arbitration, while it appears that Josh Bard will not be eligible. Jose Diaz and other recent additions to the 40-man roster were added to the list of reserve players.

Next: Why all this stuff matters.

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