A Financial Look At How The Indians Got Here

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In August of 2015, the Cleveland Indians were hamstrung. The Tribe uncharacteristically splurged during 2013 free agency and made a nice little run to the 2013 AL Wild Card game. The recipients of the Indians surprising generosity, Michael Bourn and Nick Swisher, played a part in the Tribe’s 2013 success. However, that quickly changed as their poor production and injury issues soon became arduous for the Indians and their payroll.

Back in 2014, then-GM Chris Antonetti set into motion a series of events that would enable the team to escape from the burden of Bourn and Swisher’s contract and move forward to where we are today. The Tribe sent both Bourn and Swisher to Atlanta along with $10 million in cash in return for 3B Chris Johnson and his exigent contract. The move relieved the Indians of approximately $21.5 million in total payroll obligations. In the final months of that 2015 season, the Indians traded away David Murphy, Brandon Moss, Swisher and Bourn.

According to baseballprospectus.com, The Indians opening day payroll in 2015 was approximately $87 million. Counting the $10 million in cash sent to the Braves in the Swisher/Bourn deal, and the $7.5 million owed to Chris Johnson, the Tribe shaved around $8 million off of the 2016 payroll alone. They then used $7 million to acquire Mike Napoli and another $5.25 million to add Rajai Davis. Not many noticed, but the Dolan’s and Antonetti were already spending. The 2016 opening day payroll was approximately $96 million (baseballprospectus.com).

We all know what happened in 2016. The Indians thrived and despite losing Michael Brantley for all but 12 games of the season, the Tribe took us on a captivating ride of momentous proportions, coming within a play of winning an epic World Series. The Indians kept on spending, too, as they acquired relief pitcher Andrew Miller and who was owed the rest of his $9 million dollar contract and LF Brandon Guyer’s prorated $1.2 million. It all paid off in the end, though, and not just on the diamond as it turns out.

Fox Sport’s Ken Rosenthal reported that a rival executive believes the Indians made between $15-20 million on their playoff and World Series run. That included eight additional home games and all the playoff revenue that was generated from it. To make the entire Indians financial picture clear, it is also important to note that the Indians were advantageous in finding a minority owner and investor when they brought in Missouri-based entrepreneur John Sherman as vice chairman, helping Paul Dolan with the team’s payroll.

Credit should be given to the Indians front office, as they have clearly realized they have a world series lineup that is at least under their control until 2018, most of which until 2020. The window was open and wide enough to offer Edwin Encarnacion the 3 year, $60 million dollar deal that brought him to Cleveland. Encarnacion will make $20 million a year for three years and the Indians have a team option for a fourth year. It would pay him another $20 million if exercised or would pay Encarnacion a $5 million buyout if not. Ultimately, the deal pays him $65 million dollars guaranteed. It is the biggest contract in Indians history. This kind of deal becomes less risky when the pieces are in place around him for that same length of time.

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The Indians are projecting that their 2017 opening day payroll will be approximately $135 million. This is a significant jump from just last season but it is truly remarkable when one considers that the Indians opening day payroll in 2004 was under $35 million dollars.

The Indians ranked 28th in attendance last season, which makes this whole thing really a leap of faith by the Dolans. Cleveland showed up big in the postseason and made us proud, but 28th is hard to fathom.

The Cleveland Indians are a terrific organization. They are the model for all mid-market organizations around Major League Baseball. The moves they have made to recover from two bad signings and get to where we are now is truly amazing. The Tribe should be applauded and rewarded with filled seats every night this summer.

By: Brad Ward

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