When the Indians acquired Ubaldo Jimenez from the Colorado Rockies near the end of the 2011 season, he was signed through the 2012 season with options for 2013 and 2014. However, Jimenez had a clause in his contract that the 2014 option would become a mutual option (rather than just a team option) if he happened to be traded. That means that even if the Indians decide to pick up his $8 million option for next season (which they’ll likely do, just in case), Jimenez could void his end of the deal and become a free agent. I’ve seen a lot of Indians fans say that Jimenez “owes” the team the 2014 option since he played so terribly in late 2011 and 2012. While that is a valid argument, we need to be realistic here – it’s very unlikely that he picks up his share of the option. Coming off such a fantastic season, he’s in line for a multi-year deal and he’ll find someone to give it to him.
We just need to look at two of the deals pitchers received last season to get an idea of what Jimenez may command on the open market. Because of the massive slump Jimenez experienced in 2011 and 2012, two fair comps may be Edwin Jackson and Kyle Lohse. Jimenez’s 2013 was probably more dominant than those two players’ 2012 seasons, but I think when you figure in some of the concerns about Jimenez regressing they are fair comparisons. Jackson, who was on a one-year, $11 million deal with the Washington Nationals in 2012, signed a four-year deal with the Chicago Cubs for $52 million. Lohse, coming off five seasons with the St. Louis Cardinals, signed a three-year, $33 million deal with the Milwaukee Brewers last offseason. Let’s compare Jackson and Lohse’s 2012 stats, with Jimenez’s 2013 stats: Jackson, age 30, went 10-11 with a 4.03 ERA, a 1.21 WHIP, and a 2.0 bWAR with Washington in 2012. Lohse, age 35, went 16-3 with a 2.83 ERA, a 1.09 WHIP, and a 4.3 bWAR with the Cardinals in 2012. Jimenez, age 29, went 13-9 with a 3.30 ERA, a 1.33 WHIP, and a 2.7 bWAR in 2013.
There is one major difference between Jackson and Lohse during the offseason between 2012 and 2013 – Jackson was not given a qualifying offer by Washington, while Lohse was given a qualifying offer by the Cardinals. Qualifying offers were something new that came with the new Collective Bargaining Agreement a couple of years ago. In the past, free agents could be ranked as an “A” free agent or a “B” free agent; if an outgoing free agent was offered arbitration by their former team, and declined arbitration, the team would receive a draft pick. If the player accepted arbitration (which was rare, but happened) then the team would negotiate a one-year deal with the player. If you traded for a player mid-season, you could still expect to get compensation when that player went to free agency. (For example, the Rangers could get a draft pick for Matt Garza under the old setup, they will be ineligible for one under the new CBA.) The way qualifying offers work now – major league baseball averages the salaries of the top 125 paid players, and that becomes the amount for a qualifying offer. So for the 2013 offseason, a qualifying offer will be worth $14.1 million (an $800K increase over last offseason, when it was $13.3 million). A team can make an outgoing player a qualifying offer – the player then can choose whether or not they want the one-year, $14.1 million deal, or if they want to decline the qualifying offer and hit the open market. If they decline it, their former team is owed a draft pick. Last offseason, the Atlanta Braves had made a qualifying offer to Michael Bourn, and the New York Yankees had made a qualifying offer to Nick Swisher. Since the Indians finished in the bottom 10 in terms of record, their first-round pick was protected (although they did lose later round picks).
So there are pros and cons to making a player a qualifying offer. If it’s a player that’s almost guaranteed to to command a multi-year, big-money deal, you’re probably safe giving them a qualifying offer. For example, Robinson Cano will probably be a qualifying offer no-brainer this offseason. If it’s a player you don’t think is quite worth $14.1 million, you may not want to make them the qualifying offer; you run the risk that they accept it and you overpay. For another Yankees example – they probably don’t want to make Phil Hughes a qualifying offer; he’s not in line to get a huge deal this offseason and he may accept the offer. One thing that players saw last season is that the qualifying offer almost worked like a weight around their necks in some cases. Kyle Lohse is the most dramatic example of this – his agent Scott Boras thought he would cash in, but teams were hesitant to pay him a lot of money AND lose a draft pick. As a result, he went unsigned until almost the entire length of spring training; he didn’t sign with the Brewers until the end of March. Even though he was able to get a multi-year deal in the end, he still made less money last season ($11 million) than he would have if he had accepted the qualifying offer from the Cardinals ($13.3 million).
Now that we have all of the background info on qualifying offers, and players that serve as suitable comps, we can ask: should the Indians make Jimenez a qualifying offer if he declines his end of the option? It’s a risk, because it would be about $6 million more than the Indians would pay beyond the $8 million option price. Offering him a multi-year deal is also kind of a risk, because is the 2013 Jimenez the one we would see moving forward? There are a lot of teams that are desperate for pitching and have bigger wallets than the Indians – would one of them massively outbid the Indians even if they made him a multi-year deal? Jackson is a good comp because he and Jimenez are about the same age, and he’s had some down seasons as well. If he was able to get four-years, $52 million, I imagine Jimenez could command the same.
In my opinion, I would make Jimenez the qualifying offer. In the worst case scenario, he accepts it, regresses dramatically, and the Indians have wasted the money. It’s still only for one year though, it’s not like they’ll be stuck with some kind of overpaid albatross for five years. The Brett Myers contract ($7 million, 1-year) ended up terribly for the Indians, but guess what? They’re done with him…he’s gone and not their problem anymore because it was just a one-year deal. If the Indians strongly feel the 2013 version Jimenez will be sticking around for a while, a qualifying offer may depress his value on the open market, as it did with Kyle Lohse, and give them a better chance to resign him. At one point, Boras was demanding a much greater salary for Lohse; Boras often gets some team somewhere to cough up those big deals. This time, he was unable to do so.
The Indians need to make sure they solidify their starting rotation, and I think they should try to sign at least one of Ubaldo Jimenez or Scott Kazmir. I’d rather be safe than sorry with a qualifying offer – even if a player accepts it, it won’t destroy you for years. It may depress a player’s market, and in the worst case scenario, they decline the offer, sign elsewhere, and the Indians collect a draft pick.