Explaining Ranked Free Agents & Draft Compensation
Teams must offer arbitration to ranked free agents by 11pm central time tonight if they hope to obtain compensation picks in the 2011 draft. Here's an explanation of how the process works.
Teams can choose to offer arbitration to their free agents after each season. If the player accepts, the team will get the player on a one-year deal at a figure determined by the arbitration process. Typically, players who accept arbitration get raises. If a player rejects arbitration, his former team gets nothing but compensation picks.
A player can either be classified as Type A, Type B, or nothing based on his stats from the previous two seasons in certain categories, depending on his position. For example, first basemen, outfielders and DHs are rated based on the following categories: plate appearances, average, on base percentage, homers, and RBI.
If a team signs a Type A free agent, they have to surrender a draft pick to that player’s former team. If the signing team placed in the bottom half of MLB teams, their first round draft pick is protected and they surrender a second round pick instead.
Sometimes, teams sign more than one Type A free agent who declined arbitration from his former team. In that case, one team gets a top compensation pick and other teams lose out. The team losing the highest-ranked free agent obtains the best pick the signing team can offer and other teams fall in line behind the team that loses the top-ranked player. In extreme cases, a team hoping to snag another club's first round pick can be stuck with their third rounder. The Blue Jays might have hoped to get a pick in the #15-20 range from another team for A.J. Burnett after the 2008 season, but since the Yankees had already signed C.C. Sabathia and Mark Teixeira, the Jays received the #104 overall pick from the Yankees.
Regardless of where Type A free agents sign, their teams obtain a supplementary round pick in the following year’s draft (plus the aforementioned pick from the team that signed the player).
A free agent can also be classified as a Type B based on his stats. Teams don’t have to give picks up to sign Type B free agents, but teams that lose Type Bs obtain supplementary round picks in the next year’s draft.
Another rule to consider for Type As and Type Bs: the "losing" team receives draft pick compensation without offering arbitration if their free agent signs before the deadline for teams to offer arbitration to departing free agents (now November 23rd). For example, the Blue Jays didn't have to decide whether to offer John Buck arbitration; he signed early with the Marlins, so Toronto gets a supplementary rounder in 2011.
There’s also a third possibility – the free agent is not classified as Type A or B, and there is no draft pick compensation.
Over the years, many quality players have been drafted as the result of free agent compensation. Recent examples include Huston Street, Phil Hughes, Clay Buchholz and Colby Rasmus.
Last year, Rafael Betancourt, Carl Pavano and Rafael Soriano were the only ranked free agents to accept arbitration out of 23 offers. Today, 21 teams will decide whether to offer a total of 63 players arbitration. Click here to view Tim Dierkes' predictions and here to make a few of your own.
This post is a modified version of one Tim Dierkes wrote in July, 2008.
Minor Deals: Rupe, Mariners, Villarreal
We'll keep track of the day's minor signings, trades and claims right here:
- The Orioles agreed to sign right-handed reliever Josh Rupe to a minor league deal, according to Jeff Zrebiec of the Baltimore Sun. The 28-year-old appeared in 11 games for the Royals in 2010, posting a 5.59 ERA with eight strikeouts and seven walks in 9 2/3 innings. The 2002 third-rounder also posted a 2.92 ERA with 8.4 K/9 and 4.0 BB/9 in 52 1/3 Triple-A innings.
- The Mariners signed right-hander Yusmeiro Petit, left-hander Chris Seddon and outfielder Mike Wilson as minor league free agents, according to the team. All three players receive invitations to big league Spring Training. Petit, who turned 26 yesterday, has a 5.57 ERA with 6.9 K/9 and 2.9 BB/9 in 229 1/3 big league innings over the course of four seasons. He last pitched in the majors for the 2009 D'Backs.
- The Dodgers added right-handed reliever Oscar Villarreal as a non-roster invitee, according to Steve Dilbeck of the LA Times. The 29-year-old hasn't appeared in a major league game since 2008, but he has logged 336 innings in the major leagues. He has a respectable 3.86 ERA with 6.3 K/9 and 3.6 BB/9 in 258 appearances.
Royals Interested In Kevin Millwood
The Royals are interested in Kevin Millwood, according to Dan Connolly of the Baltimore Sun (on Twitter). The right-hander has averaged 31 starts since his first full season in 1998, so GM Dayton Moore likely sees him as a back-of-the-rotation innings eater.
Millwood has an All-Star appearance and an ERA title to his name, but at this point he's likely to post an ERA near 5.00 with about 6.0 K/9 and 3.0 BB/9. In 190 2/3 innings as an Oriole, he posted a 5.10 ERA with 6.2 K/9 and 3.1 BB/9.
The Rockies have also expressed interest in Millwood, who could potentially benefit from a move to the NL. Since the Orioles didn't offer the 35-year-old arbitration, they won't obtain a compensatory draft pick if he signs elsewhere.
Vazquez Seeks One-Year Deal; Marlins In Pursuit
Javier Vazquez wants a one-year deal, according to ESPN.com's Jayson Stark. The right-hander could be looking to re-establish his value and hit the open market a year from now in search of a bigger payday.
Vazquez has turned down at least one offer worth about $20MM over two years, according to Stark. The Nationals, Cubs and Rockies have expressed interest in Vazquez, but another club appears to be in the lead for his services.
Talks with the Marlins have gotten "hot," according to Stark. Ken Rosenthal of FOX Sports confirms on Twitter that the sides had extensive discussions about a deal. We heard last week that there's mutual interest between the team and the pitcher, partly since the Marlins play relatively close to Vazquez's native Puerto Rico.
The Yankees offered Vazquez arbitration, but he appears to have agreed to turn it down and, because he is a Type B free agent, no team will have to surrender a pick to sign the 34-year-old.
Yankees Have Offered Jeter Multiple Deals
Brian Cashman told Newsday's Ken Davidoff that the Yankees have offered Derek Jeter multiple deals and received one counter-offer (Twitter link). One of the deals the Yankees proposed was worth $45MM over three years, but Jeter's representatives didn't seem to like it. Agent Casey Close told Mike Lupica of the New York Daily News that he found the Yankees' negotiating strategy "baffling."
Earlier today, Cashman told Wallace Matthews of ESPNNewYork that Jeter should test the open market if he believes the Yankees aren't offering him fair deals. Now, Cashman tells the Newark Star Ledger that he doubts Jeter truly wants to remain in the Bronx (Twitter link).
"He should be nothing but a New York Yankee," Cashman said. "He chooses not to be."
But the Yankees' tough talk may subside eventually; Jon Heyman of SI.com hears on Twitter that the team is likely to offer more than $45MM. If you ask Joel Sherman of the New York Post, Jeter's position in the negotiations is essentially "I am Derek Jeter, pay me."
Yankees Have Yet To Offer Cliff Lee A Contract
6:01pm: The Yankees have not made Lee an offer and the Yahoo report below is inaccurate, according to Mark Feinsand of the New York Daily News (on Twitter).
12:29pm: An industry source told Yahoo's Tim Brown yesterday that the Yankees offered Cliff Lee "nearly $140MM over six years, but Lee continues to hold out for a seventh year." Brown does not appear to have full confidence in the source, as the item was placed low in the column and he notes that he was unable to confirm the offer with the Yankees or Lee's agent. We found the link via Joe Pawlikowski of River Ave. Blues, who has a good take on the rumor.
On Sunday, Nick Cafardo of the Boston Globe wrote, "Word is the Yankees are in the $115 million-$120 million range for five years."
It seems likely that the Yankees are willing to give Lee a $23-24MM salary, allowing him to top C.C. Sabathia and own that record for a while, not counting Roger Clemens' pro-rated $28MM in 2007. But if Lee wants to beat or match Sabathia's $161MM for the highest total contract ever given to a pitcher, he needs that seventh year despite being four years older than Sabathia was when he signed. Lee's agent Darek Braunecker could also attempt to duplicate Sabathia's opt-out clause. Braunecker famously negotiated such a clause into A.J. Burnett's five-year, $55MM deal with the Blue Jays.
Mets Notes: Collins, Wright, Davis, Bay, K-Rod
The Mets formally introduced Terry Collins as their new manager today. Here's the latest on Collins and the team he'll take over (all links go to Twitter):
- Collins' deal runs through 2012 with an option for 2013, according to Andy Martino of the New York Daily News.
- Mets GM Sandy Alderson told Jim Bowden of Siruis XM Radio that the Mets don't have untouchables, but aren't likely to trade David Wright, Ike Davis or Jason Bay.
- Alderson also said the Mets could spend over-slot on the draft if necessary.
- The Mets expect Francisco Rodriguez to be the closer in 2011, Alderson told Adam Rubin of ESPNNewYork.com. K-Rod has a 2012 option that vests based on games finished and health, but Alderson says that won't affect the way the team handles him.
Red Sox Rumors: V-Mart, Varitek, Crawford
The latest on the Red Sox, including details on the team's final offers to the Tigers' newest free agent signing:
- The Red Sox offered Victor Martinez a three-year, $36MM deal and a four-year $42MM deal before he signed in Detroit, according to MLB.com's Ian Browne.
- As Scott Lauber of the Boston Herald points out, the Red Sox could bring Jason Varitek back in 2011, even though they declined to offer him arbitration. Click here for all the updates on which ranked free agents were offered arbitration.
- Wondering how the Red Sox have handled ranked free agents under Theo Epstein? Alex Speier of WEEI.com has all the details.
- Red Sox manager Terry Francona told the Dale & Holley Show on WEEI that he's confident the team will be strong by Spring Training, even though Epstein and the rest of the front office have some needs to address now.
- Francona called Carl Crawford a "game changer," not unlike Johnny Damon.
- The skipper also suggested that reports about Marco Scutaro's availability don't mean "anything."
- Francona was careful not to say much about Justin Upton, but he did repeat that the Red Sox value their own young players highly.
Mariners Not On Justin Upton’s No-Trade List
4:08pm: The A's, Indians, Tigers and Royals are the teams on Upton's no-trade list, according to Rosenthal (on Twitter).
TUESDAY, 3:40pm: The Mariners are not on Upton's no-trade list, according to his representatives at Reynolds Sports (on Twitter).
MONDAY: Justin Upton has four teams on his no-trade list, tweets Ken Rosenthal of FOX Sports: the Athletics, Mariners, Tigers, and Royals. A previous Rosenthal report had included the Indians instead of the Mariners. Rosenthal tweets that the Mariners indeed have interest, but they'd be very reluctant to meet Arizona's starting point of Dustin Ackley.
The Royals, Blue Jays, Marlins, Orioles, Red Sox, and Yankees are reportedly among the other interested teams. On Friday, Joel Sherman of the New York Post reported that the D'Backs were approached by 15-16 teams about Upton at the GM Meetings, five of which "showed a strong inclination to push talks further along." The Yankees are not among the five.
Pettitte Leaning Toward Returning To Yankees
Free agent lefty Andy Pettitte is leaning toward a 2011 return to the Yankees, tweets Ken Davidoff of Newsday. Back on November 11th, Pettitte told Matt Musil of KHOU.com, "Right now, I can tell you my heart's right here in Deer Park, [Texas]."
In the more immediate future we'll learn if the Yankees will offer arbitration to Pettitte, a Type A free agent. Today GM Brian Cashman told ESPN's Wallace Matthews only one of Pettitte, Derek Jeter, Austin Kearns, and Mariano Rivera is likely to get an offer, and that's Wood. Pettitte was a Type B free agent a year ago and was not offered arbitration by the Yankees.
Pettitte would add stability to the Yankees' rotation. The 38-year-old lefty posted a 3.28 ERA, 7.0 K/9, 2.9 BB/9, 0.9 HR/9, and 43.9% groundball rate in 129 regular season innings this year, missing time with a groin injury.