Pulling off a three-team deal involving Encarnacion or Alonso would be a salary saver and would ultimately increase the Indians' chances of trading Corey Kluber or Trevor Bauer without attaching big salary, according to The Athletic's Ken Rosenthal.
Encarnacion, who turns 36 in January, is heading into the final season of a three-year, $60-million deal that includes a $20-million club option for 2020. He played most of the 2018 campaign as Cleveland's designated hitter and slashed .246/.336/.474 with 32 home runs and 107 RBIs.
The 31-year-old Alonso is a first baseman who can also become a free agent after the 2019 season, in which he'll earn $8 million. During 2018 - his first year with the Indians - the former All-Star hit .250/.317/.421 with 23 home runs and 83 RBIs in 145 games.
Diaz appeared in 88 games for the Indians over the past two seasons, manning various defensive positions while recording a .727 OPS at the plate.
Meanwhile, the Indians are continuing to talk trades involving Kluber and Bauer, according to Hoynes, who lists the Yankees, Dodgers, Brewers, and Phillies as the likeliest partners. However, those pitchers are reportedly not being discussed as part of the three-team deals.
Bauer, 27, isn't eligible for free agency until 2021 and is projected to earn $11.6 million through arbitration.
Kluber, a two-time Cy Young winner, is 32 years old and can become a free agent in 2020. He'll earn $17 million in 2019 and has team options for 2020 and 2021.