Explaining Non-Tenders

Matt Capps, D.J. Carrasco and Kelly Johnson were all non-tendered last offseason. One year later, we’re well on our way to welcoming another class of non-tenders to the club. It can be a confusing kind of transaction, so here’s an explanation of what exactly a non-tender is.

To tender a player a contract is to offer a contract, but non-tenders refer to a specific kind of offer: offers of arbitration. Rules and precedent shape the kind of salary a player can expect through arbitration, so players under team control usually get raises through the process. 

For example, Joey Votto isn’t eligible for free agency yet, but he and agent Dan Lozano have some say in his future earnings. If the Reds offered Votto $750K in arbitration this offseason, Lozano and Votto could counter with a $4MM proposal and win. Arbitration can be expensive for teams, since a player’s salary depends in part on his previous earnings and comparable players.

Players generally earn $400K or so for their first few major league seasons, so they’re usually relatively cheap in their first arbitration seasons, but players entering their second, third or (for super twos) fourth arbitration seasons stand to make more money if they’re tendered an offer. 

If an arbitration eligible player hasn’t performed well, but projects to earn a considerable amount, his team will likely consider a non-tender. That means they have turned down the option to negotiate a contract with that player through arbitration, but it doesn’t mean the player’s going to sign elsewhere.

Jonny Gomes and Jack Cust both re-signed with their former teams after being non-tendered last winter. Both took paycuts, so the Reds and A’s saved money, but they risked losing the players to rival teams. (After a player is non-tendered he hits free agency and can sign anywhere.)

It’s complicated, but here’s what you need to know: teams non-tender players when they would rather risk losing the players to another team than go through the potentially expensive arbitration process.


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13 Comments on "Explaining Non-Tenders"


mikephillies
4 years 11 months ago

could the phillies non-tender kyle kendrick (going to be a super 2) and have the 5th start be somebody like vance worley, instead of paying kendrick 2 or 3 million?

RedbirdRuffian
4 years 11 months ago

This system of arbitration is extremely flawed and is a major reason why salaries continue to escalate. I am all for the players getting more than their fair share of the revenue pie; one of the flaws is that the comparison to “comparable players” supposedly reflects the marketplace but the teams with the huge revenue streams (mostly because of TV money) like the Yankees, Mets, Cubs etc skew the market causing teams like the Padres and Pirates to to be unable to afford to keep enough cornerstone players long enough to be competitive for any length of time. Prime example is Derek Jeter; next year Yanks will pay him $20 mil plus in a market where at his age and with his numbers he could maybe get $10 mil at most. Jeter’s salary will be a factor in determining future Pirate and Padre (and the rest of the league) salaries via arbitration.

Zack23
4 years 11 months ago

“Jeter’s salary will be a factor in determining future Pirate and Padre (and the rest of the league) salaries via arbitration.”

Yes, if the Pirates/Padres have a SS with service time of 15 years and comparable numbers. Jeter’s new contract has NOTHING to do with 22-24 year olds getting arbitration.

4 years 11 months ago

What skews “the market” is the fact that there is NO “market” until a player reaches free agency. Players have one potential employer, and one only for up to six years in the minors and then six more years in the major leagues. Clubs can count their blessings that all players are not free to sell their services to the highest bidder from day one.

Correct, Zack. Under NO circumstances can an arbitrator even consider the salary of a player that has reached his free agent years for comparison purposes. For a player that is not yet eligible for free agency, the arbitrators will consider the salaries of players NOT TO EXCEED those in the category with one more year’s service time. They may not consider what free agents, or free agency eligible players get paid. CBA, page 18.

4 years 11 months ago

Why not? He could be one of the comparable players used as an example to jack up the arb price.

ZoinksScoob
4 years 11 months ago

First off, teams can, in fact, non-tender players who are NOT yet arbitration-eligible; it’s a way of getting marginal players off the 40-man roster in case they want the space to sign free agents, protect players from the Rule 5 draft, etc. I believe that there were one or two non-arbitration-eligible non-tenders last season (I could be wrong, but I’m pretty sure I’m right.) A team can non-tender any player over which it has contract control (i.e., anyone without a long-term contract and not eligible for free agency.)

There are other factors with regard to arbitration. One of them is time on the DL, which can be used against a player in a hearing. Two moves that went quietly unnoticed yesterday: the Cubs placed both Geovany Soto and Tyler Colvin on the 15-day DL. Teams have expanded rosters, so there was really no need for either player to go on the DL, since replacements could be recalled without the moves. So why did the Cubs bother? Because Soto will be arbitration-eligible this winter, and Colvin is a young player under club control. In both cases, the DL moves give the Cubs a little bit of leverage in negotiations leading up to arbitration. However, in Colvin’s case, it probably won’t make that much of a difference, since his injury was due to flying bat shrapnel rather than a torn hamstring or something that could be considered chronic.

“Comparable” players refers mostly to service time as opposed to statistics. So an arbitration-eligible player can have a subpar year, but still get a hefty raise in arbitration if his service time is equivalent to that of other players having good years. That’s the part of arbitration that needs to change; baseball is a performance-based game, and as such, performance should drive salaries in those cases.

However, it is rare (if, in fact, it has ever happened) that a player would be given a decrease in salary via arbitration, despite a bad year. In fact, a player can only get a maximum 20% cut in salary in arbitration. So if a 4th or 5th year player, making $3 MM, has a bad year, the WORST that can happen (if he’s not non-tendered) is that he’ll make $2.4 MM the following year… but again, that is unlikely to happen, and he’ll still probably get a raise in arbitration.

That’s the reason you see lots of non-tenders these days; once a player is a free agent, there are no restrictions to how much his salary can be cut from the previous year. If a feeding frenzy develops to sign that player, he still might get a raise, but more likely, he’ll have to settle for some kind of “make good” contract for the coming year in order to cash in bigger down the road.

MadisonMariner
4 years 11 months ago

I was going to write my own reply to this article, but zoinks said a lot of what I wanted to say(and, really, what the article should have said.)

First of all, this quote from the article:

“To tender a player a contract is to offer a contract, but non-tenders refer to a specific kind of offer: offers of arbitration.”

isn’t even correct, as zoinks said. Non-tendering a player means releasing that player’s contractual rights and making him a free agent, and that player is on the 40-man roster, and is typically arbitration-eligible, but not always. To confirm what zoinks said, it has happened that a player with 2(or less) years of MLB service time has been non-tendered. Darrell Rasner with the Yankees a few years ago is one such example. In cases like that, rather than keeping the player in question on the 40-man roster and renewing the contract with a small pay raise, the player is just not offered a contract for the next year and becomes a free agent. In Rasner’s case, the Yankees signed him to a less expensive minor league contract within a month.

4 years 11 months ago

Hello? This post doesn’t explain what happens if someone is non-tendered, but still within his first 6 years of service time. Obviously a player becomes a “free agent” and can sign with any team after being non-tendered, but does the new team retain control of that player for the difference between ML service time and 6 years? Is that negotiable? Please add some value here.

Zack23
4 years 11 months ago

The new team reatins control between the 6 years.

Look at Wang. Yankees non-tendered him, Washington signed him, if they choose to offer him arbitration he can’t refuse and have FA, he’s under the Nationals’ control

Marc_from_Brooklyn
4 years 11 months ago

I thought that, in theory, all free agents could negotiate any terms, including that the option to become a free agent after the season despite insufficient MLB seniority to otherwise do so. Hisinori Takahashi did that with the Mets before this year. Of course, most non-tenders, released players, and minor league free agents don’t have the leverage to make such demands and end up subject to the usual collective bargaining agreement rules.

4 years 11 months ago

True, but any free agent that just got non tendered is not about to have the kind of leverage to bargain for his own freedom after just a year. Part of the attraction of such a player is that he has a couple years of “club control” left.

4 years 11 months ago

One other point that is noteworthy with respect to non tenders is that a club must offer the player at least 80% of the amount of his previous year’s salary, and the offer must be made by December 12th.

My view of the Tigers possible non tenders:
– Joel Zumaya missed most of the season (again) on the DL, as did Zach Miner with the Tigers. Zumaya is third year arb eligible and made 915 K in 2010. He is a dominant reliever when healthy, but there are injury concerns going forward. Maybe the Tigers don’t want to offer him 732 K, although they’d probably risk that much, and don’t want to risk arbitration with him. A third year eligible relief pitcher could get a couple million, if healthy, but Zumaya has hardly earned a raise and has been anything but healthy. I think he will be tendered a contract at around $ 1 million, and we’ll be reading the same warm n fuzzy stories next spring about how he’s healthier than ever, then he’ll go back on the DL.

– Zach Miner is first year eligible and made 405K- just above the major league minimum in 2010. He also has injury concerns after missing the entire season on the DL. He may get $ 700 K to $ 1 million in arby. Maybe the Tigers would rather move on and go with one of the many young guns on the farm.

– Brad Thomas was signed as a free agent out of the Korean league last winter, and he made $ 1 million in 2010. Even though he has not accrued enough service time to be eligible for arbitration, he would have to be tendered a contract offer of at least $ 800K. In fact, he can be automatically renewed since he is not yet arb eligible. I’d be moving on, because I think the Tigers have better talent on the way up than Thomas. The Tigers may give him his walking papers after the season and become a free agent if they can’t trade him for value before then.

Marc_from_Brooklyn
4 years 11 months ago

I thought that, in theory, all free agents could negotiate any terms, including that the option to become a free agent after the season despite insufficient MLB seniority to otherwise do so. Hisinori Takahashi did that with the Mets before this year. Of course, most non-tenders, released players, and minor league free agents don’t have the leverage to make such demands.