The Indians may or may not be willing to spend more on their 2014 payroll, but if they are, that money will almost certainly be spent on another starting pitcher. Ubaldo Jimenez's price has fallen to the point where he is reportedly only seeking a 3-year deal for something like $39 million. I've already said that since extension talks with Justin Masterson have been tabled, the Tribe should prepare for him to leave following 2014, and instead bring Jimenez back. If it turns out that Jimenez is still too expensive though, or a 3-year commitment is too much for ownership, Bronson Arroyo is a cheaper alternative.
Do Indians need another pitcher?
Masterson, Corey Kluber, Danny Salazar, and Zach McAllister are pretty close to inked into the rotation, but after that the options are Carlos Carrasco, who was a disaster as a starter in 2013 (but did well out of the bullpen); Trevor Bauer, who's gone from being a top 20 prospect to falling entirely out of most top 100 lists; Josh Tomlin, who was last an effective starter in 2011; and Shaun Marcum, who was effective until 2013, when injuries slowed him (injuries which might keep him from being ready for the start of the season).
I suppose need isn't accurate, strictly speaking, but the Indians sure could use another starter.
What kind of contract will it take?
Arroyo has reportedly been holding out for three-year offers, but hasn't got many (any?). It seems quite possible he'll settle for two years, likely for $10 million or so a year. Who knows what his preferences are in terms of location, etc., but 2 years, $20 million with some sort of vesting option for a third year would probably get it done. Without the option, that represents roughly half the investment Jimenez is likely to require.
Arroyo was not given a qualifying offer, so the team that sign him will not have to give up a draft pick.
What kind of upgrade is Arroyo?
Arroyo has been as dependable as any pitcher in baseball, with 199+ innings pitched for nine consecutive seasons. No pitcher is a sure thing for 30+ starts, but Arroyo is about as close as they get. His ERA+ in those nine seasons has been between 90 and 110 seven times, with one outlier on the high side (2006) and one on the low side (2011). He's got very modest strikeout numbers, but he's become one of the best pitchers in baseball at avoiding walks (only Cliff Lee and Bartolo Colon have a better BB/9 rate over the last two years). He's given up a lot of home runs, but some of that is due to pitcher in Cincinnati, a home run haven. Moving to Cleveland (or almost anywhere) should help with that.
Some are always wary of bringing a pitcher to the American League from the NL, and while I think that's often overblown, it should be pointed out that he's struggled in interleague play. He's made 18 starts against American League teams over the last 5 years, with an ugly 6.01 ERA. 18 games isn't a huge sample, that ERA is a huge difference from the 3.82 ERA he's had in 144 starts against National League teams in that time.
I think Arroyo represents an upgrade, especially if another pitcher gets hurt (and two from among Carrasco, Bauer, Tomlin, and Marcum are needed), but he looks like a dependable #4 to me, for better or for worse.
Ubaldo, Arroyo, or neither?
The Indians look like an ~85-win team to me, which is exactly the kind of squad that should look to upgrade, even if by only a couple wins, because the wins could be the difference between making the postseason or not.
I'm not the one writing the checks, but I'd prefer to pay Ubaldo an extra $3 million a year, and I'd be willing to guarantee the third year, based on him having a higher ceiling, and having shown he's capable of succeeding in the American League (even if it took longer than we would have liked).
If Ubaldo is not an option, but Arroyo is, I'd prefer him to signing no one, but I wouldn't go for a third year on anything but the kind of option he'd only reach if he's pitching very well.