Players Who Cannot Be Offered Arbitration

Being designated a Type A free agent can be a detriment if the team offers arbitration.  If the player accepts, he's off the market on a one-year deal and has a limited salary range.  If he declines, his new team must surrender a draft pick upon signing him.  Carrying around the added draft pick cost, Juan Cruz and Orlando Cabrera were among those with fewer opportunities as free agents after the '08 season.

As a result, a contractual clause prohibiting the team from offering arbitration if a player receives Type A status has been gaining in popularity.  During the 2009-10 offseason, at least four players had this clause added:

  • Orlando Hudson, Legacy Sports.  Hudson was offered and turned down arbitration from the Diamondbacks after the '08 season, and was surprised he could only find a one-year deal from the Dodgers guaranteeing $3.38MM.  The Dodgers were willing to give up the #17 overall pick to get Hudson at the reduced rate.  Hudson avoided the problem when the Dodgers chose not to offer arbitration after the '09 season.  His agent made sure it would not surface again after '10 by having a clause included in his Twins contract prohibiting the team from offering arbitration if he's a Type A.  Hudson is a Type B right now anyway.
  • Brad Penny, Legacy Sports.  Penny was well-paid by the Cardinals given his 2009 stats, but he also had the "no arbitration offer" clause included.  That might've been optimistic, since right now he's not even a Type B.
  • Justin Duchscherer, Lapa/Leventhal.  The A's offered arbitration to Duchscherer, a Type B, after the '09 season.  He declined and re-signed, and this time made sure the team cannot offer if he's a Type A.  The point is moot, as Duchscherer is below Type B and may miss the rest of the season with hip surgery.
  • Ben Sheets, CAA.  Not only did Sheets snag a huge $10MM guarantee after missing all of '09, he got this clause added just in case he has a season awesome enough to vault him to Type A status.  I'm not sure that's even possible.  Though he's been better recently, he'd need to quadruple his current Elias points (15.175) to reach Type B. 
  • Scott Boras may have been out front on this trend.  He had the clause included in Ivan Rodriguez's one-year, $10MM deal with the Marlins in '03 as well as Carlos Beltran's seven-year, $119MM deal signed in '05.  Beltran is a Type A at this time, but the Mets might not have offered arbitration after '11 anyway.

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2 Comments on "Players Who Cannot Be Offered Arbitration"

5 years 3 months ago

Correct me if I’m wrong, but didn’t Penny’s contract say that the Cards wouldn’t offer him arbitration only if he was a “Type A”? Thought I read that after the signing…

5 years 3 months ago

Not that I agree 100% with Fangraphs or anything but …

2005 – Paid $11.6m … Worth $7.4m
2006 – Paid $13.6m … Worth $27.5m
2007 – Paid $13.6m … Worth $20.8m
2008 – Paid $18.6m … Worth $31.9m
2009 – Paid $18.6m … Worth $13.9m

That puts him at $76m earned over the 5 years (avg $15.2m). He’s been worth $102m ($20m). He’s still got a 1.75 years left so the deal might not look great once the contract is over. However, if he even plays halfway decently until 2011 this will have ended up being a great contract for the Mets.