A week ago at this time the future of right-hander Ubaldo Jimenez as an Indian was cloudy.
The Indians needed to make a decision on Jimenez’s $8 million mutual option for 2014 within three days of the conclusion of the World Series, one they officially made on Friday when they picked it up. Jimenez then vetoed it.
With the option out of the way, Jimenez officially became a free agent, but it had yet to be determined if he would be tied to any compensation if he signed with another team this offseason. After Monday’s announcement that the Indians extended him the qualifying offer, everything is now much clearer. Teams know they will have to fork over a first round pick to sign him, and the Indians know if he leaves they will get a pick between the first and second round as compensation.
The qualifying offer is a new wrinkle added to free agency last year that effectively replaced the old Type A and B free agent system. In order to avoid teams piling up picks for losing several free agents and with no risk incurred by the former team, the new Collective Bargaining Agreement now calls for any team who wishes to receive compensation for an outgoing free agent to offer a one-year qualifying offer. Last year the qualifying offer was $13.3 million and this year it is $14.1 million – a figure determined by averaging the top 125 salaries in baseball.
Jimenez, 29, now has until 5pm ET on November 11th to decide whether to accept or decline the qualifying offer. If he accepts, he is bound to the deal for the upcoming season and then would become a free agent again after it. If he declines – which is expected - then any team that signs him loses their first unprotected pick in the upcoming draft (the first ten picks of the draft are protected) and the Indians get a compensation pick between the first and second round of the 2014 Draft.
The Indians also did not offer a qualifying offer to their other top free agents, left-handed pitcher Scott Kazmir or right-handed reliever Joe Smith. As a result, both are free to sign with any team without any risk or penalty to the signing team nor will any compensation be coming to the Indians if either one signs with a new team.
So where do things go from here?
As of 12:01 a.m. today, Jimenez, Kazmir and Smith are free to talk to and sign with any team. The same goes for the numerous other free agents around baseball. The Indians are still in contact with all three players and are interested in bringing them back, but the deal has to fit within the confines of their budget.
The Indians have about $70 million already tied up in players they are committed to for 2014. Last season they operated under an $80 million payroll, and they will probably be right around that figure next season. That means they probably only have about $10-20 million to spend this offseason, which is not a lot when you consider they need a starting pitcher, a backend bullpen arm and at least one bat for the lineup.
With those finite funds, it looks like only one of Jimenez, Kazmir and Smith can be retained, and the best possibilities to return are probably Kazmir or Smith (and in that order). But the Indians will face stiff competition for both players from teams looking for bullpen help or a solid rotation arm.
It is well documented how much Jimenez struggled in 2011 and 2012, but beyond that he has had four very good seasons in the past six years. He has front of the rotation stuff and his recent success from this past season will be enough for some teams to believe he is back to his old ways. Additionally, he is only 30 years old and has proven durable over the past six seasons making at least 31 starts a year. All of that adds up to a pitcher that will be in the upper echelon of starting pitchers sought out this offseason in both the free agent and trade market.
But the draft pick compensation cost surely will give some teams pause when it comes to entertaining whether they sign Jimenez or not.
Teams will really need to be certain Jimenez is not only worth the risk of big money on multi-year deal, but also worth the hit to their draft plans next year – a draft considered to have a better pool of players than in recent years.
Take the Philadelphia Phillies for example. They picked right in the middle of the draft his year at #16 overall and had a $6 million bonus pool to sign all of their picks in the first 10 rounds - $2.3 million of that pool coming from the slot value of their first round pick. Had they signed a free agent last offseason tied to a qualifying offer and lost their first round pick, they would have also lost $2.3 million in bonus pool money. This would have meant they only had $3.7 million to spend on their top 10 round picks, so it is a double whammy of losing the pick and money to sign other potential picks.
This is the dilemma that Nick Swisher, Michael Bourn, Kyle Lohse and Adam LaRoche found themselves in last offseason. They were free agents, had been extended qualifying offers by their teams, and opted not to accept them. What transpired was a limited market for all four players because teams did not want to part with a high round pick and a loss in their bonus pool. LaRoche eventually re-upped with the Nationals on a much smaller deal than anticipated and then Swisher, Bourn and Lohse signed below market deals.
Jimenez is viewed as a much higher ceiling player and a front of the rotation starter, so he probably won’t go through what those players went through last offseason. The elimination of a first round pick is crippling to a team’s draft plans, but as we saw last offseason it did not scare teams away from signing the likes of B.J. Upton, Rafael Soriano, and Josh Hamilton who had draft pick compensation tied to them.
With free agency officially underway, Jimenez along with Kazmir and Smith are in for a wild offseason. All of them have no idea at the moment what team they will call home in 2014 and beyond. The Indians themselves have several scenarios with players they may resign, sign or acquire in a trade, but even they don’t really know how things will play out.
So while the offseason picture is much clearer for teams and players with regard to who is available in free agency and the cost to acquire them, the picture is still fuzzy and just coming into focus with where the likes of Jimenez, Kazmir and Smith land. With the GM Meetings and Winter Meetings all coming up in the next several weeks, the fun is just getting started.
