Arbitration deadline looms large for clubs

Arbitration deadline looms large for clubs

The first D-Day -- Decision Day -- on baseball's offseason calendar arrives Tuesday, the deadline for clubs to offer salary arbitration to their free agents.

Teams have until 11:59 p.m. ET to decide which of 69 ranked free agents will receive the offer -- an overture rarely accepted by players, but a step necessary for their 2009 clubs to be compensated when they sign elsewhere.

Players offered arbitration will have until 11:59 p.m. ET on Dec. 7 -- the opening day of the 2009 Winter Meetings -- to decided whether to accept or decline.

A year ago, only three of 24 free agents accepted their arbitration offers.

This time, there actually are 70 Type A or Type B free agents, those who are subject to the compensation process. But one, shortstop Orlando Cabrera, has a contract clause prohibiting the Twins from making the arbitration offer.

Compensation for signing away free agents comes in the form of selections in June's First-Year Player Draft. It is a somewhat complex process, but eventually it puts teams in position to gain young talent in return for a departing free agent.

And, still, it is one of the most difficult decisions general managers and their panel of advisers make all year. Correct calls require a shrewd assessment of the market and of players' inclinations.

Because, ironically and in most cases, clubs extend arbitration to players they do not intend to retain.

Speculation is rampant concerning which free agents will be presented with the arbitration option. There are no reliable scenarios; even players who became free agents only because their clubs rejected their 2010 contract options -- such as the White Sox's Jermaine Dye and Colorado reliever Rafael Betancourt -- could be offered arbitration.

Yet the Yankees, who like many clubs prefer to have an active voice in determining their players' salaries, aren't likely to offer arbitration to any of their three ranked free agents -- even outfielder Johnny Damon, whom they may want to bring back.

The risks inherent in making the arbitration offer are clear. It is the only way for clubs to ensure compensation for departing free agents. Yet a price tag of Draft picks could make a player less attractive to suitors, rendering him more apt to accept the offer -- and thus be locked into a team which might not have a need for him.

Yet 2008 case studies do not support the notion that the shadow of arbitration reduces players' popularity.

A year ago, the 24 free agents offered arbitration included some snatched quickest off the market: Francisco Rodriguez (signed Dec. 10, by the Mets), Raul Ibanez (Dec. 16, by the Phillies) and CC Sabathia and A.J. Burnett (Dec. 18, both by the Yankees).

Conversely, many not burdened by the bounty lingered longest on the shelves, including Garret Anderson (signed Feb. 22, by the Braves), Adam Dunn (Feb. 11, by the Nationals), Bobby Abreu (Feb. 11, by the Angels) and Randy Wolf (Feb. 6, by the Dodgers).

Accepting arbitration essentially bounds a player to his 2009 team, taking him off the free-agent market.

In 2008, Darren Oliver (Angels) and David Weathers (Brewers) were the only two to accept of the 24 free agents made the arbitration offer.

Michael Barrett (Padres), Andy Pettitte (Yankees) and Mark Loretta (Houston) had accepted the arbitration offering in 2007, also out of 24 offers. Barrett and Pettitte negotiated new contracts but Loretta's case reached a salary arbitration hearing -- only the second since 1991 involving a free agent.

Teams losing Type A free agents receive a first-round pick if the signing team's Draft order is 16th or lower, as well as a so-called sandwich selection between the first and second rounds. If the signing team has a pick in the first 15 slots, the losing team gets its second-round selection along with the sandwich pick.

Compensation for losing Type B free agents is a supplemental pick between the first two rounds.

Tom Singer is a reporter for MLB.com and writes an MLBlog, Change for a Nickel. This story was not subject to the approval of Major League Baseball or its clubs.