Castro: Tribe hoping for huge return on EE investment

January 5th, 2017

CLEVELAND -- The term Indians team president Chris Antonetti used to describe the $60 million investment that the ownership made in was "leap of faith." Perhaps, because this press conference was almost immediately followed by another -- the one announcing that Billy Joel will be playing Progressive Field this summer -- "A Matter of Trust" would have been more apt.

Anyway, you get the idea. In adding Encarnacion to an American League pennant-winning roster, the Indians are hoping for a level of fan engagement and are financially extending themselves in a way that hasn't happened in decades. One night of Billy Joel throwing on a suit and banging on the piano keys is bound to put people in the seats. But the local nine has had a much more difficult time getting that kind of love night after night.

"We hope we can continue to build on the support and enthusiasm around the city during the postseason," Antonetti said. "And we hope the support will continue with heightened attendance at the ballpark."

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The barrier-breaking bottom line is that the Indians have done everything they can conceivably do to inject bodies into their ballpark.

Progressive Field is currently under renovations for the third consecutive offseason, the last phase of a dramatic and expensive reimagining of the facility that has accommodated the group-gathering and social-media-minded tastes of the times.

The front office built a contender on a budget and used resources from its fruitful farm system to land , the midseason acquisition who put the team over the top and into the World Series for the first time in nearly two decades.

And now, with sound baseball logic but against all reasonable financial logic, the club has brought in one of baseball's biggest bats to amplify the middle of the order.

You might have heard that the World Series run and the Encarnacion addition have ushered in an uptick in season-ticket sales. That is true. The Indians' base was around 7,500 in 2016, and it is currently just shy of 11,000. In the first day after the Encarnacion news broke, the Indians sold roughly 500 season tickets. This would have qualified as a month's worth of action in the not-too-distant past.

Of course, the upticks cover only a fraction of Encarnacion's 2017 salary. And what this all points to is a conversation that has been had in these parts for a long time. We know the Indians are never going to challenge the 455-game sellout streak that began in the 1990s, when the ballpark was new, the Browns were gone, the local economy was strong and the team was fantastic. But will the Tribe ever consistently fill Progressive Field's seats again?

And if not now, when?

The Indians, it turned out, had a World Series-caliber roster without , and and, obviously, without Encarnacion, whose former Blue Jays they bounced in the ALCS. Add all those guys to the mix (albeit with Mike Napoli and Game 7 icon out of the picture) and you've got something both special and, given the whims of this particular sport, uncomfortable -- a prohibitive favorite in the weak AL Central.

Relative to the Major League marketplace, the Indians scored a coup with the Encarnacion deal, which breaks down as follows:

• $5 million signing bonus

• $13 million salary in 2017

• $17 million in '18

• $20 million in '19

• $25 million club option or $5 million buyout in '20

So it's actually "only" a $60 million guaranteed commitment, not the $65 million originally reported.

Juxtapose this deal against the price tag of Encarnacion's fellow free agent, (four years, $110 million) or merely consider how unimaginable it appeared mere weeks ago, and it's back slaps and attaboys all around for owners Larry and Paul Dolan, minority owner John Sherman, Antonetti, general manager Mike Chernoff and manager Terry Francona.

But the Indians know they're taking a monumental risk here.

Ownership knows it is going to take another deep October run to make it even remotely worthwhile. And significant attendance escalation would actually only add to the Encarnacion cost, as he can make as much as $1 million more per year based on attendance-related bonuses built into this deal.

The Indians have been compared to the Royals in their hope of turning a crushing Game 7 loss into a championship the following year. But the comparison also begs us to consider what is happening to the Royals right now, as they begin the painful process of paring down their payroll and, along with it, their hopes of getting back to that stage soon. The Indians' roster is maturing and, therefore, getting more expensive, and the Encarnacion contract will be both a boon to their lineup and a challenge to navigate around. Even without Encarnacion, the 2017 payroll was going to jump more than $20 million -- with zero additions -- to account for in-house salary increases.

That's the backdrop that made Encarnacion's move to the Indians seem so inconceivable. And Encarnacion's agent, Paul Kinzer, said that while Cleveland and Texas were by far the two most engaged clubs with his client, even he had his doubts that the Tribe could pull this off. But the market conditions worked in the Indians' favor, and then the Dolans happily swallowed hard and gave the go-ahead.

Encarnacion's first choice was to return to Toronto, but the Blue Jays quickly pivoted to after Encarnacion turned down their four-year, $80 million offer at the General Managers Meetings in November. Encarnacion also turned down an offer from the Astros, in the range of $75 million, at that time.

"We didn't know what was going to happen with the Collective Bargaining Agreement," Kinzer said. "We didn't know what the [luxury tax] limitations on teams would be. People are saying we overplayed our hand, but we didn't know what the hand was."

Encarnacion, entering his age-34 season and tied to Draft-pick compensation in a market loaded with right-handed bats, lost all hand in contract talks, making his initial hope of a nine-figure deal prove impossible. He got an attractive last-minute offer from the A's -- two years, $50 million with an opt-out after the first year and a third-year club option -- but the Indians' superior competitive situation and improved proximity to his native Dominican Republic won out.

And so, the Indians won the sweepstakes. But the win is not without its drawbacks, including the 25th overall Draft pick that was surrendered (cost-controlled young talent is the lifeblood of an organization in this market size) and, of course, the fact that this is the largest contract this team has ever given a single player.

So there is both excitement and anxiety in the Tribe's front office right now, because a team not prone to going all in has done exactly that. Call it a leap of faith or a matter of trust, but, to borrow yet another Billy Joel line, the Indians looked at their 2017 outlook and said, "This Is the Time."