What is Justin Masterson worth?

Indians beat writer for MLB.com, Jordan Bastian, published a piece earlier today that suggests there’s a good chance the Indians will go to arbitration with 2013 All-Star Justin Masterson, and if not with him than with someone else in the organization. The reason to focus on Masterson, however, is very clear: the divide between what the Indians are offering and what Masterson is seeking is rather wide.

How wide?

Masterson’s camp submitted a proposal that would pay the right hander $11.8 million in 2014, which would be a significant raise over the 5.6-ish million he made last season. The Indians, on the other hand, countered with an offer of $8.05 million. In other words, the distance between what Big Masty wants and what the Indians are offering is nearly 70% of his total salary from 2013. It’s a big gap.

But in the wake of Masahiro Tanaka getting $22 million a season from the New York Yankees today, let’s talk about what pitchers are worth and try to come up with a fair figure for Masterson.

Before we decide what to pay Masterson, however, we need to establish who he is as a pitcher and what he has brought to the table in his career. Because they’re the most relevant statistics, let’s look at his 2013 numbers:

Justin Masterson (2013): Age 28 season. Selected to All-Star team. 14-10 record, 3.45 ERA, 193 IP, 195 Ks, 109 ERA+ (Remember, ERA+ of 100 is roughly equal to a league average pitcher).

Based on this season alone, I am inclined to agree with Masterson’s [agent’s] assessment of his value. Indeed, a quick perusal of American League pitchers last season reveals a very good comparison: 2013 Jon Lester; let’s take a look at his stats:

Jon Lester (2013): Age 29 season. 15-8 record, 3.75 ERA, 213 IP, 177 Ks, 109 ERA+

Conveniently enough, both Masterson and Lester are at the same point in their arbitration eligibility, with 2014 being the last year before they can test free agency. Lester made $$11.6 million last season, and will make $13 million in 2014. Once again, it seems like Masterson’s camp has a better read on his value in the current market. But then I remembered a few things:

1) It’s probably easier for a top of the line starter to get paid in Boston than it is in Cleveland. Just the facts of life, folks.
2) Jon Lester finished 4th in Cy Young voting in 2010, which probably accelerated his pay scale as he entered arbitration.
3) Justin Masterson does not have nearly the same track record of success as a Jon Lester

That #3 point is very important. Let’s break down the 4-year averages of several pitchers who all compare favorably to Masterson in 2013:

2010-2013 Season Averages: (2013 Salary info in parentheses)
Justin Masterson: 10.75 Wins, 12 Losses, 4.07 ERA, 198 IP, 163 Ks, 98.5 ERA+ ($5.6M salary, 2015 Free Agent)
Jon Lester: 14.5 Wins, 10 Wins, 3.82 ERA, 204 IP, 188 Ks, 113.5 ERA+ ($11.6M salary, 2015 Free Agent)
Matt Garza: 10 Wins, 8.25 Losses, 3.74 ERA, 166 IP, 145 Ks, 107.25 ERA+ ($10.25M salary, 2014 Free Agent)
Bud Norris: 8 Wins, 11.5 Losses, 4.38 ERA, 171 IP, 161 Ks, 91.25 ERA+ ($5.3M salary, 2016 Free Agent)

Lessons from that little exercise:

1) Matt Garza is surprisingly good, except for the half-season he missed due to injury.
2) Good lord is Bud Norris overpaid.
3) Over the past 4 years, Masterson hasn’t even been a league-average pitcher when you take the big picture into account.

If looking just at Jon Lester made Masterson’s proposal fair in comparison, looking at all four of these pitchers together has somewhat of an opposite effect. The best direct comparison for Masterson is Matt Garza, who made $10.25 million in his final year before free agency, but Garza is almost indisputably a better pitcher than Masterson, if a shade less durable. Regardless, I don’t think Garza missing half a season in 2012 should make up for the considerable gaps in ERA and ERA+.

Additionally, you have to remember that the ball is still in the Indians’ court. Barring injury, Masterson will be pitching for the Tribe in 2014 regardless of what happens between the club and player in these frosty winter months. This is not an open market and Masterson should not be entitled to his demand because he’s a gamer or a leader or a great teammate or anything else. The Indians know that whatever they have to pay Justin this season will have a big impact on ongoing negotiations to secure a contract extension. Think about it: it’s easier to negotiate a 3 year/$40 million contract when a player is currently making $8 million than when he’s making $11 million and looking for a raise.

Ultimately, however, I think all the talk of a contract extension will be for naught. The Indians need players to give them a hometown discount, not the other way around. If the gulf is this wide now, I shudder to think what Masterson will think of his value in an open market.

Here’s what I’d do:

If I’m the Indians and I think I can eventually sign Ubaldo to a reduced contract (3 years at $14 mil per), I really have no choice but to stick to my lowball offer and go to arbitration. I don’t like it, but chances are I’m not re-signing Masterson anyway, so I have nothing to lose.

Now, if I don’t think I have a chance to sign Ubaldo (and Tanaka to the Yankees may very well change this perspective from where it was a day ago), I almost have no choice but to lock up Masterson now. I’d offer $11 million in 2014 for Masterson to give up a year of free agency and sign for $14 million in 2014, with a mutual option for $17 million in 2015.

Either way, $11 million is slightly too much for a sometimes-great pitcher in a closed market. It’s a really sticky situation, though.

Share your thoughts below…