The Indians announced today that they have signed Fausto Carmona to a three-year guranateed extension through 2011, while also extending his commitment to the Indians through the end of the 2014 season, weeks before his 31st birthday.  Carmona becomes the longest-committed Indian on the active roster, and he's one of ten who are signed through 2012 or beyond.  (Travis Hafner is committed through 2013, as are rookies Asdrubal Cabrera, Craig Breslow and Jensen Lewis.  Grady Sizemore is committed through 2012, as are second-year players Ryan Garko, Rafael Perez, Andy Marte and Franklin Gutierrez.)

Carmona's contract is guaranteed through 2011, paying a total of $14.5 million over in addition to his $500,000 salary for 2008.  The deal further gives the Indians three successive single-season club options for 2012, 2013 and 2014.  No buyouts have been reported for the three club options, but the option-year salaries will increase if Carmona is in the top five in the Cy Young voting in two successive years.

Signing bonus:  $750,000 in 2008, in addition to $500,000 salary.
Guaranteed salaries:  $2.75 million in 2009, $4.9 million in 2010, $6.1 million in 2011.
Club options without incentives:  $7 million in 2012, $9 million in 2013, $12 million in 2014.
Club options with incentives:  $9 million in 2012, $11 million in 2013, $14 million in 2014.

To put these numbers into context, this past offseason saw Carlos Silva, a decent but thoroughly unexceptional starting pitcher, sign a four-year deal with the Mariners for an annual salary of $12 million, and of course our own Paul Byrd is making $8 million based on a deal signed two years ago, a deal that is now somewhat under-market.  In fact, Carmona's potential salary for 2012-2014 are only 3% higher than Westbrook's guaranteed salary for 2008-2010, even though salaries are likely to climb by 40% over the four years in between the two deals, and Westbrook's deal is a slightly under-market and team-friendly to start with, and Carmona's money isn't even guaranteed.

Carmona will be paid a maximum of $48 million over seven seasons, from 2008 through 2014, if all options and bonuses are exercised.  This is reportedly the richest deal ever given to a pitcher not yet eligible for arbitration, continuing the Indians' recent trend of setting new industry benchmarks for rewarding talented young players.  If Carmona continues to be a top-20 starter, he may well have earned more than the $14.5 million guarantee through arbitration by the end of 2010, let alone 2011.  In this way, "lockup contracts" such as this generally reduce a team's overall payroll commitment, or at least have a neutral effect, such that Carmona's extension should not adversely affect the Indians' ability to acquire or retain other players.

Although not seriously considered by Cy Young voters, Carmona arguably was the most effective pitcher in the AL in 2007, possibly in either league, posting a 151 ERA+ that was better than Sabathia's or Beckett's – in any season of their careers.  At the same age of 23, Sabathia had already produced almost four whole good seasons in the majors, but on the other hand, Sabathia didn't even approach Carmona's 2007 level of dominance until he was 25, and he has never matched it.  Though obscured by Sabathia's Cy Young campaign, Carmona's season was probably the best by any Indians starter of the past 35 years, dating back to Gaylord Perry's stellar 1972 Cy Young season, and seriously rivaled only by Dennis Martinez's 28 starts in 1995.

Carmona was an enigma in the minors, dominating hitters in 2003 at the tender age of 19 in Lake County, but with low strikeout rates that generally indicate that a pitcher will be much less effective at higher levels.  His 2004-2005 performances in Akron and Buffalo appeared merely solid but were actually exceptional considering his youth.

He started the 2006 season in Buffalo as the Indians' first depth option for the big-league rotation, but after April, it became clear that the Indians were relatively solid in the rotation but deeply impoverished in the bullpen.  So Carmona became a big-league middle reliever, and he very quickly emerged as a dominant setup man.  He posted a 1.65 ERA in his first five weeks in that role – and 0.00 for the next four weeks – making him the heir apparent closer when Bob Wickman left in a deadline deal.

As a closer, however, Carmona famously produced perhaps the worst single-week performance ever seen in the majors.  Indians officials said that Carmona allowed his mechanics to get out of whack during that week, and they returned him to Buffalo to stretch himself back into a starter.  He ended the year where he started it, as a spot starter in the majors.  For that one week as a closer, Carmona's ERA was a staggering 37.13 over four games.  For the rest of 2006, however, his ERA  was an above-average 4.12, including seven starts and a stretch of 22 relief appearances.

In 2007, early injuries to Cliff Lee and Jake Westbrook opened up a spot for Carmona, and he secured that spot with stellar performances in April in May, reminiscent of his 2004 stint in Lake County – low run totals coupled by low strikeout totals.  Carmona surged even further after May, however, with his K rates spiking from 3.32 to 6.73, coupled with a groundball rate that easily led the majors.  Since July 1 of last year, Carmona has a 2.18 ERA over 19 starts.

Carmona ended the 2007 season with just under two years of major league service time and would have been arbitration eligible as a "Super Two" player at the end of 2008.  The Indians already controlled his rights through 2012.  Without a multi-year deal, clubs essentially have a series of one-year options on all their players until they reach free agency, with an arbitration panel setting the one-year salary if the two sides can't agree.  Arbitration produces higher salaries than multi-year deals, but the player is never guaranteed more than one year at a time.

With a deal like this, the Indians essentially exercise their 2009, 2010 and 2011 "options" on Carmona, guaranteeing him certain salaries regardless of his health or performance.  In return, the Indians get reduced salaries than Carmona would have received in arbitration, and they also get options for 2013 and 2014 that they otherwise would not have had.

Grady Sizemore's deal similarly extended his commitment to the Indians for two additional years, but in his deal, only the final year is non-guaranteed, not the final three.  The Indians generally do not believe in guaranteeing contracts for longer than three years for any pitcher, and just a year ago, they similarly gave Jake Westbrook an extension guaranteed three years beyond the current season.

For this past offseason, Carmona was the only young player obviously in line for a lockup contract.  Garko and Gutierrez will not reach arbitration for another two seasons, and unlike Sizemore and Peralta, their 2007 performances were not so extravangantly productive as to inspire an early strike on a long-term deal.  Cabrera, Perez and others likewise can be signed to longer deals after 2008 if their performances warrant it.