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What would a contract extension for Corey Kluber look like?

What would it take and should the Indians go for it?

Joy R. Absalon-USA TODAY Sports

Corey Kluber has turned into the ace of the Tribe rotation, and one of the best pitchers in baseball. He's 3rd in the AL among pitchers in fWAR (FanGraphs), 4th in WARP (Baseball Prospectus), and 5th in bWAR (Baseball-Reference). He's among the top ten in ERA, ERA+, FIP, and K%, among other metrics. In short, he's having the best season by an Indians pitcher since Cliff Lee in 2008, when he won the AL Cy Young.

The Indians have already locked up a number of their core players for years to come. Including team options, Carlos Santana is under team control through 2017, Michael Brantley through 2018, Jason Kipnis through 2020, and Yan Gomes through 2021. All of those guys are making what look to be below market value money, due to the team's willingness to guarantee them that money years before they hit free agency.

Looking at the last season and a half, those are four of the team's top five players. Kluber is the other player in that group.

What might an extension for Kluber look like?

Kluber is in his second year of pre-arbitration, which means the Indians can pay him the league minimum again in 2015, and then go through arbitration with him in 2016, 2017, and 2018. I went through and tried to find all the pitchers who signed an extension during the last three years, when they were within a year of Kluber in terms of service time, meaning they were either about to enter arbitration for the first time, or had one or two more seasons of pre-arbitration to go. I may have missed one or two, but this is what I found, with the guaranteed years/money of the deal, the number of pre-arbitration years covered by the extension, the number of free agent years covered, the player-age in the first season of each extension, and each pitcher's career WAR heading into the first season of the extension:

Player Years/Money Pre-Arb Years FA Years Age in Year 1 fWAR
Madison Bumgarner 5/$35M 1 1 23 9.1
Gio Gonzalez 5/$42M 0 2 26 6.7
Derek Holland 5/$28.5M 1 1 25 5.3
Cory Luebke 4/$12M 2 0 27 2.3
Jon Niese 5/$25.5M 1 1 25 4.6
Jose Quintana 5/$21M 2 0 25 5.3
Chris Sale 5/$32.5M 1 1 24 6.5
Julio Teheran 6/$32.4M 2 1 23 2.4

As you can see, five years is the standard for this type of extension. It should be noted that all of those extensions also included team options. Teheran's had one option, the other seven all had two club options. Other than Luebke (lower) and Sale (higher), all of those option years were for between $10-12 million.

Bumgarner, Holland, Niese, and Sale were all at the point Kluber would be, were he to sign an extension that began next year. Kluber is already at 7.7 fWAR, and if he keeps pitching the way he has, he'll top any of the fWAR totals these other pitchers had when their extensions began. Factor in a little inflation to account some of those deals being signed 2-3 years ago, and something like 5 years, $33-37 million is probably what it takes, with the Indians getting a couple team options too, for $10-12 million each.

On the other hand, Kluber will be 29 next year, making him older than anyone else on the list, and at least four years older than most of them. I don't think that does a lot to lower the annual cost, but it might mean it makes more sense to go only 4 guaranteed years. The last year of this sort of extension is usually the most expensive, so 4 guaranteed years might run $24-28 million (with the Indians till being able to expect a pair of team-option years)

What if they go year-to-year instead?

If the Indians choose to go year-to-year, they can pay Kluber ~$500,000 next year. Looking at comparable starters who've recently had their first year of arbitration (a group that includes Justin Masterson, Rick Porcello, Stephen Strasburg, and Doug Fister), I think it's fair to think Kluber would earn $5-6 million in his first year of arbitration if his 2015 is similar to how he's done during his career to date. Starting pitchers going up an average of ~70% in their second and third seasons of arbitration eligibility, which means the Indians can expect to pay Kluber anywhere from $28-34 million over the next four seasons, if they go year-to-year and Kluber stays healthy and pitches something close to the way he has to date.

What should the Indians do?

A quick summary of the figures I've come up with:

My best guess at an extension: 4 years, $26 million or 5 years, $35 million, with two team options for $10-12 million either way

My best guess at the year-to-year cost, if Kluber stays healthy: 4 years, $31 million, then he's gone

The injury risk isn't really worth it to save just the $5 million difference in my best guesses above, but If Kluber keeps pitching the way he has this season though, that year-to-year cost is going to be higher, maybe totaling as much as $40 million (that's a very high-end possibility, but David Price is going to earn more than that in his final three seasons before free agency).

If you think what we're seeing this year from Kluber is real, or even 80% real, I think the potential savings are worth the risk. When you add in a couple team-friendly option years, I think the Indians should definitely be pushing to get an extension done, with the four-year option being best in my view, because of Kluber's age. The Indians would then have their five best players all locked up with cost certainty for another 3-5 years, with options to keep most of them longer. Roll the dice and get the cost certainty, then go about bringing in the other pieces needed to contend in those years.