It’s not personal, Johnny. It’s strictly business.
Johnny Cueto turns 29 on February 15. He’s coming off a tremendous season, one of the best for a starting pitcher in the long history of the Cincinnati Reds. The club signed the right-hander out of the Dominican Republic as a free agent in 2004. He debuted against the Arizona Diamondbacks on April 3, 2008, a game I attended. Cueto struck out ten and walked none that night. Five days later against the Brewers, eight strikeouts and no walks. Zero nerves, zero walks. Twice.
Three years later, fresh off a surprising divisional championship in 2010, the Reds and Johnny Cueto agreed to a contract extension. The deal was for $27 million over four years (2011-14), plus a $10 million team option for 2015. The 5’11” pitcher was about to enter his first year of arbitration. So with the option year included, the Reds bought out two years of Cueto’s free agency. $10 million was a pile of money for an organization that at the time was spending just $76 million for 25 players.
Whatever comfort the millions of dollars provided the player and his family, the deal was a bonanza for the club. Over its initial four years, Cueto earned roughly 15 WAR (average of FanGraphs and Baseball-Reference), which had an open market value of about $80-85 million over those years. If Cueto enjoys another 5 WAR season in 2015 for the Reds, it would mean an additional net gain of $25 million.
The parties are nearing the end of that 2011 agreement. Johnny Cueto becomes a free agent in 2016. To make matters worse, team control over three other starting pitchers — Mat Latos, Mike Leake and Alfredo Simon — expires at the same time. Homer Bailey is the only member of the 2014 rotation signed beyond the 2015 season. People refer to that as a “window” in close proximity with the word “closing.”
But like other buildings with windows, the Reds can remodel. They won’t let all four pitchers leave. At least one, probably two, will sign extensions this offseason. Beyond that, the next (cheaper) generation of pitchers will take its turn.
Knowing that the Reds pitching staff won’t disappear in a puff of free agency doesn’t make the decisions the next few months any easier. And the uncertain health status of Latos, Bailey and Tony Cingrani makes action all the more treacherous. But as the team and its fans have learned the past 18 months, inaction can be equally perilous.
The single most important decision the Reds confront this offseason regards Johnny Cueto’s fate. Of the four pitchers, he offers the biggest upside, to the Reds and trade suitors.
The parts move together, however. What the Reds do with Johnny Cueto is influenced by how they decide to manage the other pitchers. For example, if they sign Mike Leake and Mat Latos to long-term deals, they can rule out signing Cueto. That said, here are the Reds options for how they can handle #47:
Option 1: Let him walk
The Reds could simply let Johnny Cueto finish out his contract. They’d pocket 34 more regular season starts (plus the postseason, right?), hope Cueto wins 20 games again and see how far that gets the team. After the season, before they parted ways, the Reds would make him what’s called a qualifying offer (QO) for 2016 of about $16 million.
[Per the league’s collective bargaining agreement, the QO number each year is determined by averaging the top 125 salaries in the game. The commissioner’s $22-million salary doesn’t count. This year, the QO amount was $15.3 million. Last year, $14.1 million. The QO rule is designed to protect teams that lose top players to free agency. Last year, the Reds made a QO to Shin-Soo Choo, but not to Bronson Arroyo. If Cueto stays healthy and good, he’ll get one.]
Under this scenario, when Cueto turns down his QO and signs with another team, the Reds will receive an extra draft pick, timed to come at the end of the first round. That draft selection may or may not end up helping the Reds in the near future.
Option 2: Sign him again
The Reds could negotiate another extension with Johnny Cueto.
A few days ago, Cueto expressed interest (through his translator) in staying with the Reds. “I feel good here. I like it here. I like the fans. I like the stadium, even though the stadium is small, I like this stadium. I pitch good here. I want to stay here, yes.” (C. Trent Rosecrans)
How much would this cost? Judging by recent contracts signed by Cole Hamels and Zack Greinke, Cueto would likely receive offers in the range of 6-years, $150 million on the open market. Just maybe because of his age — Hamels and Greinke were 29, Cueto would be 30 — the duration would be only five years. Just maybe because the Reds could offer Cueto the security of a new contract before he has to take the mound in 2015, they get a little average annual value (AAV) discount.
But even with those generous assumptions, a Cueto extension with the Reds would cost $23 million AAV for five years.
Maybe that’s in the organization’s plan. But I doubt it.
Like Shin-Soo Choo, who I think the Reds had intended to re-sign when they traded for him, Johnny Cueto had too great of a season right before the Reds needed to negotiate. His thrilling Cy Young-caliber performance, punctuated by that improbable eighth-inning hit and win number 20, priced Cueto right off our team.
Don’t judge the Reds harshly for not negotiating with Cueto last offseason. He’d been on the DL three times in 2013. No one knew for sure back then if Cueto could stay healthy while pitching with his new super-twisty motion. If you were one of the few agitating for an extension twelve months ago, you were wrong, based on what was known at the time.
I’m not even sure the Reds should sign a 30-year-old pitcher to an expensive five- or six- year deal, even if they could. They’d benefit more by putting that $100 million-plus toward a couple hitting upgrades between now and 2020.
Option 3: Trade him this winter
Johnny Cueto would be attractive to any contending team. As a pitcher with Cy Young stuff who costs (risks) only $10 million, Cueto would offer that team a low-risk alternative to a nine-figure, long-term free agent contract for John Lester, Max Schurzer or James Shields.
In exchange, the Reds could receive an established impact hitter in return, or a tippy-top prospect and more. Or, they’d look for a combination – a second-tier player who can help them in left field now, for a year or two or three, plus a solid pitching prospect. Caveat on top prospects, though. Studies show that way more than half of top-100 prospects bust. Even among that group of players, generally only the top few prospects have decent returns, and there’s no guarantee.
Trading Cueto would provide needed salary relief. But if that’s the Reds main goal, moving Latos or Leake would save about the same. Buster Olney of ESPN suggests the Reds package Cueto with Brandon Phillips, say to the Yankees, with a player like Brett Gardner as part of the return. Gardner is three years younger, plays left field and a little less expensive than BP. Toronto is another team that could use DatDude and a front-line pitcher.
The downside of trading Cueto is the gap between his pitching performance and that of his replacement. The Reds don’t have an obvious candidate to step into Cueto’s spot. Robert Stephenson isn’t ready. Maybe Dylan Axelrod or David Holmberg would be passable. Maybe Tony Cingrani’s shoulder will heal up and he’ll develop a second and third pitch. Maybe Rasiel Iglesias, who finally pitched for the organization today. Lots of maybe there.
On the other hand, the Reds have tried it for two years without enough hitting and we know how that turned out. No one will replace Johnny Cueto’s performance. But the Reds might yet be better with 162 games’ worth of improved hitting.
Option 4: Trade him in July
The Reds could hold on to Cueto (and the other pitchers) until the trade deadline and then make a move or two if they aren’t in the pennant race. If the hitting (and health) has come around, hold on to the top-rate rotation for the postseason.
In what might be a model for the Reds, the Red Sox traded Jon Lester for Yoenis Cespedes at the 2014 trade deadline. The Cubs traded Jeff Samardzija for one of the top position player prospects in baseball and the Rays traded David Price at the deadline for a nice haul of players. But both Samardzija and Price had 1.5 years before free agency.
Yes, teams can be desperate at the deadline (Milwaukee: Broxton salary dump, who-hoo). But your menu of trade partners shrinks in July. Don’t bother to call the teams out of contention or know they don’t need a starter. The Reds could cast a wider net before the season starts.
And with waiting, there’s a risk that Cueto gets hurt again or, less likely, struggles in the first half, reducing his value compared to the start of the season.
* * *
It’s odd to consider trading — to be willing to trade — Johnny Cueto. He was the Reds MVP last year. Never played for another major league organization. But Cueto’s worth is well known and, most importantly, quantified. Five WAR. That’s a lot, but that’s all.
It’s imperative for the  Reds to follow Michael Corleone’s lead and demystify their thinking about Cueto. The front office, including the owner, shouldn’t overvalue him because he’s homegrown. That’s a sentimental word used recently by Bryan Price and Walt Jocketty. Further, the Reds can’t be paralyzed by absolute prioritization of pitching over hitting. Or by the equally sloppy corollary they won’t be able to replace Cueto.
The mortal enemies of the Reds? Not the St. Louis Cardinals or Pittsburgh Pirates. Try obsolete frameworks, risk aversion and undue love of their own guys. Those are the forces that have defeated our team since the Shin-Soo Choo trade.
Translation: The Cincinnati Reds must be open to trading Johnny Cueto. Wide open and active. If another team makes the right offer, the Reds can’t refuse.
They need a WAR-time front office.