Getting beyond Scott Boras and his sniping, the Indians are going to have to fill some major holes this offseason. They aren't necessarily looking to replace players; they're trying to replace production. For example, Kevin Millwood posted a 6.3 WARP in 2005, his highest total since 2002. There's a pretty good chance that even if the Indians retain him, they won't be getting the same production.
To hammer the point home, I've created a little chart showing the three-year averages of the top starters in free agency. WARP is playing-time dependent, so a year missed to injury will affect the average, but durability is almost as important in some respects as on-field results. After all, you're paying the guy whether he pitches or not.
While this in no way is a system for picking free agents, it does shows you the volatility of starting pitchers. Just imagine for instance if Esteban Loiaza had been eligible for free agency after the 2003 season instead of 2004. It turns out that the Nationals signed him to a $2.9M contract last offseason, and got a great return out of it. On the other hand, Carl Pavano posted a 8.2 WARP in 2004, by far a career high. He had fortunate timing, because he was a free agent, and landed a lucrative four-year deal from the New York Yankees.
I did the same thing for the 2004 free agents (Excel file, click on the "2004 SP" tab), and compared their 2005 WARP with their 2002-2004 averages. Of the 33 pitchers who signed major-league contracts, only 11 exceed that three-year average. Kevin Millwood and Scott Elarton were two of those eleven. Only one pitcher (Roger Clemens) made more money than Kevin Millwood and bested his 2004 campaign (Pedro Martinez was 0.1 off his 2004 total).
In other words, free agent pitchers are at best a crapshoot, and at worst, a spin at the roulette wheel. And in a thin pitching market, teams will be hard-pressed to find anything resembling a bargain. So, how do you navigate this minefield? I guess I have three guidelines:
(1) Sign a pitcher who's durable. If you're going to invest three years and $30M in a guy, make sure he's going to stay on the mound for those three seasons. Sign the injury risks to one-year deals, or better yet, to minor-league deals.
(2) Don't pay for outliers. It isn't really worth it to pay a pitcher $10M a year knowing you're getting a $6M/year pitcher. This is otherwise known as the Carl Pavano rule.
(3) Look beyond the Win-Loss record and the ERA. Some pitchers may look worse because they pitched in hitter-friendly ballparks, while others may have weaknesses masked by spacious home parks. Also look at statistics like BABIP, which can deviate from season to season. Another aspect to look at is team defense, which can inflate or deflate the ERA.I don't really know if any of the guys on this list, especially the top half, are going to be considered bargains because the market is so thin. That being said, a couple pitchers might come more undervalued than the others. For example, Byung-Hyun Kim pitched in front of one of the worst defenses in baseball (ranked by defensive efficiency), pitched half his games in the most hitter-friendly environment in baseball (Coors Field), yet pitched pretty well.