Arbitration Fallout: Randy Wolf

Are the Dodgers in a terrible, horrible, no good financial state because they did not offer Randy Wolf arbitration yesterday? Apparently not. Take it away, Ned Colletti:

"The decision by the Dodgers not to offer arbitration to pitcher Randy Wolf or any of their other free agents Tuesday should not be viewed as a sign that their uncertain ownership situation is affecting them financially, General Manager Ned Colletti said.

"Our decision was made strictly from a baseball perspective," Colletti said.

Wolf was arguably the Dodgers best pitcher last season and one of the premier free agents on the market. It seemed to be a no brainer to offer Wolf arbitration given his 2009 performance, the number of teams thought to be pursuing Wolf, and there was virtually no chance that Wolf would have accepted arbitration from the Dodgers given how much of a lock he is to land a multi year contract.

If this is truly just a baseball decision, then this shows me that the Dodgers don't believe that Randy Wolf will be able to duplicate his performance. If they honestly thought that Wolf was as good as his performance was this season, then they would have had no problem paying $10-$12 million in 2010 for a front line starting pitcher. But because the Dodgers do not view Wolf as a #1 or #2 starter, they opted to keep their payroll flexibility instead of potentially committing a large salary to Wolf in the unlikely event that he accepted arbitration. As a result, the Dodgers will not gain any draft picks if another team signs Wolf. Bummer.

From Wolf's perspective, this has to be great news. He is now set to fully capitalize on a career year now that teams do not have to surrender any draft picks to sign him. Wolf is one of the only top free agents that will not require draft pick compensation to sign, which immediately makes him more of a commodity on the market.

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Arbitration Fallout: Adrian Beltre

Surprise, surprise. The Mariners offered Adrian Beltre arbitration:

"Hours before the deadline for offering arbitration to ranked free-agent players to ensure compensation in the form of coveted picks in the 2010 First-Year Player Draft, Seattle offered arbitration to third baseman Beltre while not offering it to left-hander Bedard.

This means that if Beltre -- ranked a Type B free agent by the Elias Sports Bureau based on performance over the previous two seasons -- declines the arbitration offer by 11:59 p.m. ET on Monday and ends up signing with another club, the Mariners will receive a "sandwich pick" between the first and second rounds of next June's Draft."

One would think that Beltre's $12 million dollar salary in 2009 would have prevented the Mariners from offering him arbitration, but I guess the Mariners' affinity for Beltre coupled with their increased financial flexibility allowed them to offer Beltre arbitration.

But make no mistake here, this decision is a calculated risk by the Mariners. They are banking that Beltre will settle for nothing less than a multi year contract and that he will not bite at their arbitration offer.

Considering Beltre's age and stature on the free agent market, one would expect him to have no problem getting a multi year deal, which would be good news for the Mariners. Even though the market for free agent third basemen is quite deep this winter, Beltre is one of the best ones because of his age, defensive ability, and power.

But this is why this move is a risk for the Mariners: there is a chance (albeit a small one) that Beltre will accept the arbitration offer, thinking that he can earn $12 million+ in 2010 and if he puts together a good season in 2010, he can be one of the top free agents on the market. Beltre is a very talented player, but he is coming off a injury plagued 2009 season and I think if he plays his cards exactly right, then he could wind up with a huge contract next year, when he will be just 31. And who knows, by then the economy might be on the upswing and more teams might have the ability to spend.

So even though all signs point to Beltre declining the Mariners arbitration offer, I can definitely see the logic in Beltre accepting this deal next Monday.

What do you think? Did the Mariners make the right move?

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Arbitration Conundrum: Placido Polanco

The deadline for teams to offer free agents salary arbitration is today, which means that some teams will have fascinating decisions to make. There is significant economic risk involved in offering a player salary arbitration, especially in a weak economy. For more information about arbitration, click here.

(Placido Polanco, Type A free agent)

Scenarios:

1. Tigers offer Polanco arbitration and he accepts; Tigers control his rights for at least 2010 and possibly longer if they come to terms on a new contract. Polanco's 2010 salary will be determined by either arbitration or through negotiation. Polanco earned $4.6 million in 2009 and would likely command somewhere between $6-$8 million in salary arbitration.

2. Tigers offer Polanco arbitration and he declines; the Tigers will receive draft pick compensation if Polanco signs elsewhere; Polanco is still able to sign with the Tigers as well.

3. Tigers refuse to offer Polanco salary arbitration; the Tigers can still sign Polanco, but they would receive no draft pick compensation in return


VERDICT: Do not offer Polanco salary arbitration

Here's why:

RISK

-Lose an effective second baseman

-No free agent compensation

REWARD

-While the Tigers might be weakened in the short team, not offering Polanco arbitration is the right move when you consider how poor the Tigers finances are.

-Give Scott Sizemore, a younger and cheaper option, the opportunity to excel at second base.


If the Tigers were in a better financial situation, then it would be much easier for the Tigers to justify bringing Polanco back for another season. At this stage in his career, Polanco is still a very useful player to have around, which makes this decision all the more difficult for the Tigers. There's a good chance that if the Tigers offered Polanco arbitration, that he would sign with another team and the Tigers would be awarded draft picks as free agent compensation. Despite this, the Tigers are not in the financial position to take risks right now that could potentially tie up money and force them to trade away one of their high priced players (Granderson, Jackson, etc.)



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Hypothetically Speaking: The Adam Jones Contract Extension

Even though we're only in December, Adam Jones has to be one of the offseason's biggest losers so far. Jones narrowly missed out on being arbitration eligible, losing the final "super two" spot to Mike Fontenot of the Cubs. As a result, the Orioles do not have to give Jones a large raise and can instead simply renew his contract.

At the same time, this sets up the ideal scenario for Jones and the Orioles to come to terms on a contract extension. The Orioles can lock up Jones before his price tag becomes too large and Jones can get a raise in 2010 and a nice amount of guaranteed money for the future.

Let's take a look at the goals for each side:

The Orioles

1. Lock up Adam Jones long term

2. Buyout all of his arbitration years

3. Buyout 1-2 of his free agent years

The Adam Jones Camp

1. Big money contract

2. Pay increase in 2010

3. Guaranteed money

So how about this deal for Jones and the Orioles?

(5 years/$30 million) with $14 million dollar team option for 2015

Here is the contractual breakdown:

2010: $1 million
2011: $3 million
2012: $5.5 million
2013: $9.5 million
2014: $11 million
2015: $14 million (team option)

Why it works for the Orioles:

1. Retain Jones at a very team friendly price

2. Relatively small commitment to core player

3. If they wait another year, Jones's price tag could be astronomical

Why it works for Jones:

1. Does not have to wait to get paid

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This deal is very similar to the one signed by Curtis Granderson a few years back. Granderson and Jones were in very similar situations because neither guy was eligible for arbitration, but wowed their teams respective front offices with their talents. Even though he has less than three years of service time, Jones has established himself as the Orioles centerfielder of the future because of his incredible combination of speed, power, and tremendous defensive ability/instincts.

By locking up Jones now, the Orioles would be reaffirming their commitment to building a winning ball club and investing in top talent.

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Arbitration Conundrum: Jose Valverde

The deadline for teams to offer free agents salary arbitration is today, which means that some teams will have fascinating decisions to make. There is significant economic risk involved in offering a player salary arbitration, especially in a weak economy. For more information about arbitration, click here.

(Jose Valverde, Type A free agent)

Scenarios:

1. Astros offer Valverde arbitration and he accepts; Astros control his rights for at least 2010 and possibly longer if they come to terms on a new contract. Valverde's 2010 salary will be determined by either arbitration or through negotiation. Valverde earned $8 million in 2009 and would likely command somewhere between $10-12 million in salary arbitration.

2. Astros offer Valverde arbitration and he declines; the Astros will receive draft pick compensation if Valverde signs elsewhere; Valverde is still able to sign with the Astros as well

3. Astros refuse to offer Valverde salary arbitration; the Astros can still sign Valverde, but they would receive no draft pick compensation in return


VERDICT: Do Not Offer Valverde salary arbitration

Here's why:

RISK

-Lose one of the best closers in baseball

-Potential backlash from fans?

-No free agent compensation

REWARD

-Avoid spending $10 million+ on a closer when they are looking to cut payroll

-Potentially can re-sign Valverde to a team friendly contract if the closers market implodes


Even though it would seem that the risks outweigh the rewards here, financial flexibility is crucial to the Astros, who are in the process of slashing payroll. If their payroll is cut $15-$25 million in 2010, that would leave the Astros with a $80+ million dollar payroll. Can the Astros afford to commit at least $10 million of that to a closer? I don't think so, especially when you take into account that the 2010 Astros right now are locked into 4 players for a combined $54 million dollars. Adding another double digit salary would leave very little payroll to address the various needs of the team and arbitration raises.

In addition, with all the quality closers on the market this winter, there is a significant possibility that there will be good deals on the market for those teams that are patient.

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The Importance of Alex Cora

$2 million dollars.

Doesn't seem like much (in baseball terms), does it? Well, in this case, $2 million dollars brought the Mets Alex Cora, a utility infielder with a great leadership pedigree, but limited offensive and defensive ability. Sure, there are some who will bitch and moan about the Mets spending $2 million on a backup middle infielder, but to me, this move is a strong statement by the Mets front office.

And here's why. In 2009, shortstop Jose Reyes missed nearly the entire season with various leg issues and ailments. Eventually, Reyes was forced to undergo surgery in October to repair a torn hamstring. At this point, no one knows how Reyes will recover from his injuries, how he will perform once he comes back, when Reyes will be able to come back, and most importantly, if Reyes will be the same player he was prior to the injuries.

All of these unknowns make Alex Cora a potentially vital player for the Mets in 2010. The responsibility falls on Cora to pick up the slack and play everyday at shortstop for the Mets in 2010 if Reyes is hurt. This contract is a sure sign that the Mets front office trusts Cora to be a steady force at shortstop for a prolonged period of time. No one can honestly expect Cora to fully replace Reyes's production, but clearly the Mets think highly enough of Cora to hand him a $2 million dollar contract in a down economy.

But the real question is this: should the Mets feel comfortable with Alex Cora as their starting shortstop in 2010? Cora's 2009 performance (.251, .320 OBP, 1 HR) reflects that he is a below average hitter at this stage in his career and his -7.8 UZR suggests that he is actually a defensive liability at shortstop. Is this a guy who you would trust to play 100+ games if need be?

That's the two million dollar question.

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Arbitration Conundrum: Benjie Molina

The deadline for teams to offer free agents salary arbitration is today, which means that some teams will have fascinating decisions to make. There is significant economic risk involved in offering a player salary arbitration, especially in a weak economy. For more information about arbitration, click here.

Scenarios:

1. Giants offer Molina arbitration and he accepts; Giants control his rights for at least 2010 and possibly longer if they come to terms on a new contract. Molina's 2010 salary will be determined by either arbitration or through negotiation. Molina earned $6 million in 2009 and would likely command somewhere between $7-$8 million in salary arbitration.

2. Giants offer Molina arbitration and he declines; the Giants will receive draft pick compensation if Molina signs elsewhere; Molina is still able to sign with the Giants as well

3. Giants refuse to offer Molina salary arbitration; the Giants can still sign Molina, but they would receive no draft pick compensation in return


VERDICT: Offer Molina salary arbitration

Here's why:

RISK

-The biggest risk involved in offering Molina salary arbitration is that he accepts and the Giants are forced to pay above market value for a declining and aging catcher.

REWARD

-The reward for the Giants in offering Molina arbitration is twofold:

1. Security blanket: If Buster Posey is unable to handle the catching duties full time next season, then Molina would be an ideal replacement. Also, if the Giants bring back Molina, they could bring Posey along slowly until they know that he is ready to handle the gig.
2. Draft Pick Compensation: Given how weak the free agent crop of catchers is this offseason, it would not surprise me to see a team sign Molina in spite of his Type A status.

The reward far exceeds the risk in this scenario and would be putting the Giants in a position of power no matter what Molina decides to do.

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