Free Agent Arbitration Primer
What does it mean when we say a free agent was offered arbitration? When a team offers arbitration to one of its own free agents, it is offering the player a 2010 contract at a to-be-determined salary. Last year, out of 24 such offers, only two players (Darren Oliver and David Weathers) accepted.
One reason "offering arbitration" to free agents is confusing is that the actual process of arbitration rarely comes into play. Even with Oliver and Weathers last year, the sides agreed on 2010 salaries without arbitration hearings. In an arbitration hearing, a third-party panel must choose between one salary figure submitted by the team and another submitted by the player. These hearings only take place if the sides cannot agree on a salary. Clearing up a common error: if a free agent accepts arbitration, the team and the player can submit any salary figure they want.
If most free agents turn down arbitration offers, why do we care? Turning down an arbitration offer makes draft pick compensation possible for the team losing the free agent. Free agents can be classified as Type A, B, or nothing. Check our list to see the current designations, and click here to see the stats the Elias Sports Bureau uses to assign them.
Shortstop Marco Scutaro will be our example of a Type A free agent. Say the Blue Jays offer him arbitration, and he turns it down because he feels he can do better than a one-year contract if he hits the open market. Say also that the Red Sox sign Scutaro, and do not sign any other Type A free agents. In this case, the Blue Jays are given Boston's #29 pick in the June 2010 draft as well as a pick in a supplemental round that takes place after the first round. It's important to note that the supplemental pick is squeezed into the draft but it does not come from the Red Sox. Therefore, the Sox only surrendered one pick to sign Scutaro, even though the Blue Jays received two.
In the Scutaro example, the Blue Jays were given Boston's first-round draft pick. With Type A free agent draft pick compensation, only first-round picks outside of the top 15 are eligible to be taken by another team. The first 15 picks are protected. In those cases, the team gives up its second-round pick. For example, if the Astros sign Scutaro, the Blue Jays get their second-round (#41) pick rather than their protected first-round (#8) pick. Here's the 2010 draft order; note that the first 16 picks are protected next year because the Rangers will receive a compensatory pick for failing to sign Matt Purke.
Now, if one team signs multiple Type As from other teams, as the Yankees did last year, draft pick compensation gets muddier. Click here to read up on that.
We'll use outfielder Marlon Byrd as our Type B example. Say the Rangers offer him arbitration and he turns it down in search of a better contract. Say also that the Cubs sign Byrd. The Cubs do not give a draft pick to the Rangers. The Rangers do gain a draft pick – it is squeezed into the supplemental round. Therefore, signing a Type A free agent who was offered and turned down arbitration costs one draft pick, but signing such a Type B does not. Players who were not offered arbitration do not have draft pick compensation. Same goes for players who were designated neither A nor B.
Another cause for confusion: we have a different concept that also uses the word "arbitration." When we say Felix Hernandez is arbitration-eligible, we mean that he has between two-plus and five-plus years of service time, and therefore has some say in his salary. Hernandez is under the Mariners' control. The only question is what they will pay him next year, and that's the one similarity with free agent compensation. Felix and the Mariners each submit salary figures, and if they can't agree an arbitration panel must choose one.
Upcoming deadlines: on December 1st (by 11pm CST), we'll learn whether teams offer arbitration to their free agents. Expect 20-25 offers. By December 7th, those 20-25 players must choose whether to accept. Expect only a handful to accept. Those who accept are no longer free agents.
The unrelated non-tender deadline is December 12th. That is when teams decide whether to tender a contract to arbitration-eligible players. These players have fewer than six years of service time, and are under team control for 2010 if the team wants them. If not, the players are non-tendered and become free agents. We'll be adding many names to the free agent list on December 12th.
Blue Jays Offer Arb To Scutaro, Barajas
The Blue Jays offered arbitration to free agents Marco Scutaro (A) and Rod Barajas (B), tweets Michael Silverman of the Boston Herald.
Most believe Scutaro will turn down the offer in search of a multiyear contract. If so, the team signing him will have to give up a draft pick. The Jays could net two picks for Scutaro and one for Barajas, assuming both turn down the arb offers by December 7th.
Keep this in mind with Scutaro – while he is a Type A, his 83.069 number is outranked by Rafael Soriano, John Lackey, Mike Gonzalez, Johnny Damon, Jason Bay, Jose Valverde, and Matt Holliday. It is possible the Blue Jays will not receive a first-round pick for Scutaro, instead getting a second or even third-rounder along with their supplemental pick.
White Sox Do Not Offer Arb To Dye, Dotel
The White Sox will not offer arbitration to Jermaine Dye (A), Octavio Dotel (A), Scott Podsednik (neither), or Ramon Castro (neither), tweets White Sox VP Scott Reifert. None of these decisions come as a surprise. Note that teams interested in Dye and Dotel can now be certain that the players will not cost draft picks.
Gregg Zaun To Sign By Week’s End
Free agent catcher Gregg Zaun did an interview with Canada's The Sports Network (hat tip to DRays Bay). Asked when we'll hear news of his signing, Zaun replied:
It'll be done before the end of this week, before the Winter Meetings. All I can say right now is there is more than one club involved and not all of them are in the American League.
Today we'll learn whether Zaun, a Type B free agent, is offered arbitration by the Rays. My guess is they won't, mainly because they already turned down his $2MM club option. Where do you think Zaun will land? The Blue Jays, Royals, Mariners, Giants, Astros, Nationals, and Mets might consider offering up a starting job.
Padres Do Not Offer Arb To Brian Giles
The Padres will not offer arbitration to Type B free agent outfielder Brian Giles, MLB.com's Corey Brock learned from GM Jed Hoyer. Backup catcher Henry Blanco, who is neither A nor B, also will not get an offer. Brock says the Padres would like to re-sign Blanco, but Ken Rosenthal of FOX Sports believes he's close to a deal with the Mets.
Giles was an easy decision after he fell off a cliff in 2009, hitting just .191/.277/.271 in 253 plate appearances while earning $9MM. Giles dealt with a knee injury during the season.
D’Backs Attempting To Trade For A Starter
The Diamondbacks "are more focused on trades than free agents" in their search for a starting pitcher, according to a source of Ken Rosenthal and Jon Paul Morosi of FOX Sports. The writers suggest the D'Backs will look for a cheap back-end rotation type, speculating on non-tender candidates Dave Bush, Brian Tallet, and Tim Redding. It sounds like the D'Backs don't want to give up a ton in trade, as they're reluctant to meet the asking price for Edwin Jackson and haven't inquired on Pirates starters Paul Maholm and Zach Duke.
Back on November 12th, we named about 30 potentially available starters, including Tallet and Bush.
Phillies Sign Brian Schneider
The Phillies signed catcher Brian Schneider, according to Mandy Housenick of The Morning Call (hat tip to Jon Heyman). He signed a two-year deal, according to MLB.com's Todd Zolecki. Zolecki says Schneider will earn $1.25MM in '10 and $1.5MM in '11 for a total of $2.75MM. Schneider grew up a Phillies fan, which was part of the reason he was willing to accept a role backing up Carlos Ruiz rather than start for another team. The Rockies were known to have interest, but that was also for a backup job.
Schneider, 33, hit .218/.292/.335 in 194 plate appearances for the Mets this year, catching 437 innings. He dealt with knee, back, and calf issues. He earned $4.9MM in the last year of a four-year, $16MM deal signed in January of '06. In November of '07, Schneider was traded by the Nationals with Ryan Church to the Mets for Lastings Milledge.
Mets Talk: Cora, Catchers, Krivsky
Let's gather up the latest Mets hot stove links…
- Joel Sherman of the New York Post, Jesse Spector of the New York Daily News, and Ken Davidoff of Newsday all trashed yesterday's signing of Alex Cora for $2MM. The basic premise is that every dollar counts when you're up against a payroll limit, and uninspired signings like Cora, John Grabow, and Ramon Hernandez for $2-3MM hurt.
- In that same blog post, Davidoff says the Mets "like Matt Holliday, but it's pretty apparent that they're not going after him the way they pursued Carlos Beltran five years ago."
- The Mets are poised to add Henry Blanco and Chris Coste as backup options, but Davidoff says their top free agent target is Bengie Molina. If he's offered arbitration today and turns it down later, Molina would cost the Mets' their #40 draft pick (unless they also sign a higher-ranked Type A who turned down arb, in which case their #40 pick would go to another team and the Giants would get #71). Davidoff notes that Gerald Laird and Chris Snyder were Mets trade targets in the past, and that other free agent catchers would not cost a draft pick. Bart Hubbuch of the New York Post says the Mets are interested in Type B free agent Rod Barajas.
- Roch Kubatko of MASN talked to Orioles president Andy MacPhail about Wayne Krivsky leaving his special assistant position with the O's for a better position with the Mets. Knowing that Krivsky wants to be a GM again, does this put more pressure on Omar Minaya?
Rockies Offer Arb To Betancourt, Marquis, Not Torrealba, Beimel
The Rockies offered arbitration to reliever Rafael Betancourt (Type A) and starter Jason Marquis (Type B), according to Tracy Ringolsby of Inside The Rockies. They did not offer to Yorvit Torrealba (B) or Joe Beimel (B).
The Marquis decision comes as a mild surprise. Ringolsby says there are indications he will reject the offer in search of a multiyear deal, which would net the Rockies a supplemental pick.
Betancourt rejected the Rockies' two-year, $7MM offer earlier in the offseason, so this arbitration offer gives them a chance to either keep him on a one-year deal or receive two draft picks for their loss. The Rox already rejected Betancourt's $5.4MM club option, so they might be thinking he'd get less than that in arbitration. From Betancourt's point of view, he'll be a lot less attractive to other teams if he turns down the Rockies' offer.
Rockies Eyeing Justin Duchscherer, Miguel Batista
It's just one line at the end of Troy E. Renck's Denver Post column, but here's a few fresh Rockies targets: righties Justin Duchscherer and Miguel Batista. Renck says the Rockies are "trolling for pitching depth of all types" given the uncertainty with free agents Rafael Betancourt, Jose Contreras, and Joe Beimel.
Duchscherer is also known to be on the radar of the Pirates and Red Sox after missing the '09 season with hip and elbow surgeries and clinical depression. We learned what Batista is up to in yesterday's Geoff Baker article for the Seattle Times. Batista said he's heard from a few contending clubs.
Also of note: MLB.com's Thomas Harding talked to Rockies GM Dan O'Dowd, who indicated there's a slight chance the Rockies reach an agreement with Garrett Atkins in advance of the December 12th non-tender deadline. Maybe the Rockies could release Atkins and then re-sign him without the restriction of the 80% rule?