The Cleveland Indians and reigning American League Cy Young winner Corey Kluber have reportedly discussed a longterm deal, but seem to have been unable to come to any sort of agreement, and so this morning Kluber was given a one-year contract, for something close to the league minimum of ~$550,000.
If you're unfamiliar with baseball's financial structure, that figure may shock you, but because Kluber does not yet have three years of service time, he is not eligible for arbitration, and the team is under no obligation to pay him more than the minimum. (It's possible the team is giving him a bit more than that, as something of a goodwill bonus, but at this point that has not been reported.)
Kluber will be eligible for arbitration in 2016, 2017, and 2018. If his 2015 is anywhere near as good as his 2014 was, he'll be in line for something like $10 million next season, with substantial raises in each of the two following seasons if he continues to be among baseball's best pitchers. On the other hand, if he were to suffer a career-ending injury this year, he's have nothing else coming to him.
Because the risks and rewards are so high for both sides, there's a fair amount of incentive to meet somewhere in the middle and agree to an extension that assures the player of financial security for life, while giving the team the opportunity to save a lot of longterm money by locking a player in for less than he'd be worth on the free market.
I was hoping to see a four-year extension for ~$32 million, with one or two team options at the end.
There's nothing to prevent the two sides from continuing to talk, and it's possible such an extension will still be worked out ahead of Opening Day. In-season extensions are more rare, and so if nothing changes in the next three weeks or so, we'll probably be waiting til next winter to see what develops.