Arbitration decisions will foretell off-season plans

Open Thread: Indianapolis in the middle of winter?
Dreaming of Joe

At certain points in the off-season we learn something definitive about a team’s plans. A week and a half ago teams had to protect players not on their 40-man rosters from the Rule 5 draft. We learned then that the Yankees valued certain players. Today the Yankees must decide whether to offer arbitration to their three compensation-eligible free agents: Johnny Damon, Andy Pettitte, and Xavier Nady. We’ll soon learn what they’re thinking in regards to those players, and perhaps the whole market.

The Yankees surprised many last winter when they declined to offer arbitration to any of their free agents. This meant that they would not collect any draft picks when Bobby Abreu, a Type A free agent, signed with another team. From the Yankees perspective, however, it meant that they had no obligations to these players. Abreu and Pettitte both earned $16 million in 2008, and that would have essentially added $32 million to the 2009 payroll. They decided those funds would be better used towards contracts for CC Sabathia and A.J. Burnett (and later, Mark Teixeira).

Pettitte and Damon this year are different than Abreu and Pettitte last year. After his incentives, Pettitte earned around $10 million this season. The Yankees could offer him arbitration and work with that as a starting point, rather than $16 million. Unlike Abreu, it appears the Yankees would like Damon to return, or are at least considering the option. There’s a far greater chance they’ll offer him arbitration than it was for Abreu, whom they didn’t want back in the first place.

By offering Damon arbitration, the Yankees are accepting that he’ll accept. That wouldn’t be a completely bad thing, as it gives him and the team a couple of options for a 2010 contract. They could work out a one- or two-year deal, or they could go to an arbitration hearing. If they choose the latter, they’d end up with one year of Johnny Damon for, say, $15 million. It’s not ideal, but it’s not terrible for a one-year solution.

Scott Boras does not advise his players to accept arbitration under most circumstances. If Damon declines, the Yankees get a first round or second round draft pick if he signs elsewhere. That reward might not be worth the risk of offering arbitration to a player you don’t want back, but if the Yankees want Damon back it’s probably worth it. With Boras, chances are he declines anyway.

All winter we speculate about what a team might do. Today we get to find out something that they actually do. It’s one of the cooler parts of the off-season. The Yankees will reveal to us a little of what they think when they announce their decisions later this afternoon. The talk about Halladay and Holliday is fun and all, but this is the Yankees actually doing something.

What do we think the Yankees will decide? Mike and I weigh in on the RAB Radio Show later today. You can check back at 3:30, or have it automatically sent to iTunes or your RSS reader.

Open Thread: Indianapolis in the middle of winter?
Dreaming of Joe
  • Tom Zig

    arbitration for Pettitte
    None for Johnny
    None for Nady

    • JGS

      I’ll go with yes for Pettitte and Damon, no to Nady

      • Mac

        +1 For Damon, worst case scenario is you overpay for 1 year. Which is still a great scenario in my book. Hopefully gives the Yanks a chance to see a little bit of A-Jax and doesn’t tie up any money for the 2011 FA class.

  • Camilo Gerardo – your inception? fuck perception, go with what makes sense

    maybe just Nady gets the offer? that would be a very good 4th OF at a good market rate

    • Chris

      The decision on offering or not to Nady should be based almost completely on his medicals. He’s certainly a good enough player when healthy to warrant an arbitration offer. I’m not sure what impact his injury will have on the decision.

      • Count Zero


  • Salty Buggah

    At first, I didnt really want to offer Johnny anything. But now I’m leaning toward offering arbitration to him. Assuming he plays as well as he did in 09, 15 mil won’t be that bad if he accepts. His 09 production was worth $13.6 mil and he lost a LOT of his value on defense. I think he’ll rebound on defense a bit (don’t know why but he can’t be THAT bad after being so good in 08, can he?) so even if his offense declines a bit, his value would be near his 09 value.

    And I really want some draft picks if he goes somewhere else. I love draft picks.

    • andrew

      Well, it’s possible that 2007/2008 were his outlier defensive years and that the negative UZR he had in center his whole career is the true defensive value

      • whozat

        A negative UZR in center is very likely to translate to an at-least-average UZR in LF. So, its probable that Damon’s defense would have played + or ++ in LF for his whole career, until this year. Given his age, it’s possible that he fell off a cliff defensively, but it’s also possible that he could rebound and be average at least in LF next year.

        • Salty Buggah

          I really hope the latter is true. If he was average in LF for 09, he’d be the 6th best LFer in the Majors WAR-wise (he currently is 11th) so offering him arbitration would have been way easier (but then again, he would be more expensive to resign).

          Can you believe that Nyjer Morgan is the 3rd best LFer in MLB WAR-wise because of his defense? Crazy

          • Bo

            Thats why WAR is fairly meaningless.

            • tommiesmithjohncarlos a/k/a Ridiculous Upside

              Yeah… no.

          • Matt ACTY/BBD

            Well, Morgan’s situation is helped by the fact that he played 56 games in CF as well, helping his position adjustment a bit. It was still at -2.0 but would’ve been higher had he spent all of those 56 games in LF rather than playing in CF.

      • Salty Buggah

        No, I was referring to LF. I know he’s completely done in CF for sure. I think he can play well in LF but then again, he IS getting old and 2008 really wasn’t a large enough sample (UZR is only available for his 2007-2009 seasons, though 1/4 of his career innings have come in LF and he had a +2.9 UZR/150 there in 07-09) I guess. Maybe a little bit has to do with the new stadium (despite it being not that different).

  • Abe

    The Yankees should offer Damon arbitration. I think it’s pretty unlikely that he accepts and if that’s the case it will also reduce his value league-wide which will hurt his leverage when negotiating with the Yankees. The worst case scenario is that he accepts and in that case we overpay by a bit for one year but the key is that it’s only one year. Considering the upcoming free agent class, I could live with a one year $15 million deal with Damon.

    • Count Zero

      That’s the heart of it — I see this as a win-win situation and a no-brainer.

  • Bill

    Honestly I don’t even think Boras is arrogant enough to tell Damon to decline arbitration. That’s how much of a no brainer it is that he’ll probably accept.

    Abreu set the market at 2 years 19M, is Damon really dumb enough to decline 1 year 15M from the team he apparently prefers to play for?

    Now Boras almost never tells his clients to accept arbitration, but alot of guys got burned by declining last year. One Boras client that immediately comes to mind is Jason Varitek who ended up with less than half of what he would’ve gotten in arbitration. I’d be surprised if many guys turned down arbitration.

    For me personally. I’d offer arb to Nady and that’s it. Damon will accept and at 15M that’s way too much. Nady will probably decline as he is also a Boras client and won’t really be raking in. Also considering that he can’t guarantee himself a starting role here he may want to field contract offers from teams that will give him the opportunity to play everyday. If we want Damon back we can wait out the market and probably sign him for about 1 year 10-12M with a 2nd year option/buyout. And if not we let Damon go, no big deal.

    • Brien Jackson

      See Varitek, Jason.

      • Brien Jackson

        Huh, I had like 250 words in front of that when I typed it up. Damn laptop mouse.

      • Bill

        Yea I bet Damon saw what happened to Varitek too and I’m sure Boras remembers it. Don’t you think they would be cautious to avoid the mistakes made last year?

    • Rose

      Abreu set the market at 2 years 19M, is Damon really dumb enough to decline 1 year 15M from the team he apparently prefers to play for?

      Very good point. Not to mention all the other corner outfielders that took pay cuts last year. Guys like Holliday and Bay shouldn’t affect Johnny Damon’s dollar value based on talent…but it may affect it based on availability…for those who missed out and are in need.

      For me personally. I’d offer arb to Nady and that’s it. Nady will probably decline as he is also a Boras client and won’t really be raking in.

      No way. I disagree with this. He’s coming off of a second TJ surgery and who knows how he’ll play. I guess it all depends on the role an arbitrator will play with a arbitratee like Nady, who is coming off a season where he didn’t play more than 15 games and coming off major surgery as well. I personally don’t know.

      • Bill

        As I mentioned in antoher post below I should’ve prefaced the Nady thing by saying that this assumes his recovery is progressing well. Which is a BIG assumption. If the Yankees felt like he would be without question good to go in Spring Training I would offer arbitration. If Nady is healthy he’d be a nice option on a 1 year deal at arb money.

        Now with that said its probably way too early to tell how he’ll recover, so in all likelihood we probably shouldn’t and won’t offer arbitration because of those health risks.

  • Tony

    Damon @ 15 is too much, but Nady @ 6 coming off his second TJ is fine.

    People don’t make sense. Offer Damon. He probably declines, and if he doesn’t you’re not locked into him long-term.

    • Bill

      I should’ve prefaced that I would only offer Nady arbitration under the assumption that he is healthy or looks like he will be 100% come spring training which I admit is a BIG assumption. The only way he accepts arbitration is if he still has serious health concerns. However even then they probably decline and wait it out until he can get healthy and get a decent deal from someone.

      I don’t really see why people would think that Damon would really decline arbitration. Does he really believe that there is a 3 year deal waiting out there for him? A 2 year deal certainly, but a 2 year deal at Abreu type money is worse than a 1 year deal of 15M. Damon would have to have an impressively terrible year to do worse than 4-5M next year if he goes year to year. Plus you also have to consider that Damon’s value would plummet if a team had to give up a draft pick for him.

      Accepting arbitration should be a virtual no brainer for Damon. Even with Boras it is still likely he accepts. 15M is an overpay. If Damon wants to come back make him accept a 1 year deal at no more than 12M. If he gets a better offer so be it. He is unlikely to get a better offer than 15M though even if that’s only for 1 year.

      Nady on the other hand I would be surprised if he does accept and if he did I’d really question our medical staff’s evaluation because a healthy or somewhat healthy Nady would likely do better on the open market and there’s no way Boras would push for arbitration in this situation as Nady doesn’t have nearly as much to lose as Damon would and definitely has more to gain by testing the free agent waters.

    • Rose

      When you see Bobby Abreu coming off the year he had…getting 2 years @ $18M or $19M…offering Johnny Damon 1 year at around $16M is foolish. But you can hope that Boras convinces him to decline and go from there.

      There’s always Mike Cameron for presumably much cheaper…then you slide Melky to LF and WALA! You actually might have a better scenario…

      • tommiesmithjohncarlos a/k/a Ridiculous Upside

        I believe the word you’re looking for is “voilá”.

        • Rose

          Ah yes…but I was going for more of the Fonzie-Voilá amalgam…but you caught me, Thomas…you caught me good…

          • tommiesmithjohncarlos a/k/a Ridiculous Upside

            I give because I love.

        • Rose
          • tommiesmithjohncarlos a/k/a Ridiculous Upside

            I chuckled.

  • Jake H

    I would offer it to Damon worst case senario you get him for 1 year yes at a big salary but the damage would only be for 1 year. Also I would offer it to Nady too. I don’t know how any person would give Nady more money since he was hurt this year. If it was me I would tell Nady look your going to take a pay cut because you were hurt.

    • Bill

      Our payroll is already pretty high. If the Yankees want to keep payroll at or near last years total we would not have much flexibility to do much else this offseason. Right now we 166M committed to only 12 players. This salary figure does not include anyone that needs to be tendered a contract, so Melky, Gaudin, Joba, Hughes, and the rest of the 40 man roster. When you add those guys in it probably brings us to about 180M right now. If we sign Damon to 15M we’re at 195M. That’s 7M short of last years payroll. That’s not even enough to sign Pettitte and still stay at last year’s number.

      If the team is willing to raise the payroll this year to fill other holes I’m fine with that, but otherwise Damon at 15M is simply ridiculous.

      At 15M you could sign Matsui and a cheaper LF or another starter.

      Unlike previous years (mainly last year) the Yankees do not have that much financial flexibility to go spend a fortune.

  • A.D.

    At this point I’m pretty fine with whatever the Yanks do, (though I’d find it a bit odd if they offered Nady, Damon, and Pettitte arb).

  • Rose

    Has there ever been a thread on here regarding the phenomenon known as “Walk Years?” Just wondering. I don’t know if it’s some sort of a “schema” where you just notice it more because of the situation or circumstance at hand? Varitek is a good case where it clearly didn’t take place for him…but I seem to recall several players where it’s taken place and in full force.

    Now Damon’s numbers weren’t exactly typical stellar “walk year” type stuff…and he did seem to be breaking down towards the end (only to rejuvinate himself in the playoffs)…but you still sometimes wonder. His defense has been crumbling for some time now…how do you determine or estimate when the bat may follow? Pettitte’s “reinventing himself” helps even though the old addage “you can’t teach an old dog new tricks” makes you believe it’s harder than it seems…Mussina did it and Pettitte seems to be following suit. Nady, if this wasn’t his SECOND Tommy John Surgery, I think you may look at it…at least a little differently.

    In the end…

    Pettitte – Yes
    Damon – Yes
    Nady – No

    • A.D.

      Has there ever been a thread on here regarding the phenomenon known as “Walk Years?”

      There’s definitely going to be some confounding variables on this, for instance, with how FA works for young players, many times they’re hitting FA as the hit/middle of their prime, so it makes sense they have a career year.

      • Rose

        True…but Adrian Beltre, Brett Boone, Javy Lopez, etc? There are always the strange extremely out of place contract year that doesn’t always make sense lol

  • bottom line

    Yes to Damon. Yanks can’t afford to pass up opportunites for high draft picks, especially with Emperor Bud making sniffling and gurmbling noises about slotting future drafts.

    • Bo

      They’ve had the slot system for yrs.

      • tommiesmithjohncarlos a/k/a Ridiculous Upside

        It’s perfectly clear (from context) that bottomline was talking about a hard, mandatory, rookie scale contract NBA-style slotting system and not the soft “pretty please” slotting system currently in place.

  • Matt ACTY/BBD

    I wonder how the decision to offer arbitration to Damon will affect the Matsui negotiations. If Damon accepts, perhaps the Yankees just let Matsui walk, use Damon at DH, and sign another OF (Mikey C?!). However, making Damon a DH lowers his actual value even more and makes overpaying for Damon–even if it’s just for one year–even worse.

    • Rose

      I’d rather have Cameron + Matsui or Damon + Matsui than Damon + Cameron. Matsui is a much better (and probably cheaper) bat than Damon (at DH).

      • Matt ACTY/BBD

        Matsui’s better, but the “downgrade” to Damon wouldn’t be all that sharp; it’s not like they’d be going from Matsui to Juan Miranada or Bernie Williams to (ugh) Tony Womack. It’s also safe to infer that like Matsui in 2009, Damon could benefit from not having to play the field. This would obviously close Damon off from a good deal of–but of course not all of–injury risk and possibly keep him from the normal “wear and tear” suffered by a fielder during the course of the season. That, in turn, could keep his bat healthy and help him avoid a late season slump like in ’09.

        • Rose

          All points are valid…although Damon still can (technically) play the field…and if he were to just DH for us…he would probably be taking an even further pay cut…which he would certainly never do. It’s universally known that Matsui can’t play the field and probably won’t…so it’s easier to pay him DH money than it is Damon. At least IMO.

          • Matt ACTY/BBD

            I’m assuming that Damon accepts arbitration in my scenario.

  • Slugger27

    are we even positive damon would get 15M during arbitration? i mean i know it seems like players always get increases on the previous year, but isnt that usually players who arent yet free agents and still under team control?

    next year damon will be 36, and although he had a good year in 08, hes still a 36 year old corner OF. i mean if the yanks submit 11M and damon submits 15M, i could see the yankees winning that case. is arbitration the same with a guy like him as it is a 26 year old still under team control? in other words, are we sure that hes guaranteed a higher salary than last year?

    • Ed

      You have to justify your salary demands by comparing yourself to other players. Find a player similar to you and say he made $X, so I’m worth about $X too.

      Considering every mid-30’s outfielder that has signed since the end of the ’08 season has gotten $11m or less, Damon would have a VERY hard time justifying a pay increase.

      I think if the Yankees offered $11m in arbitration, they’d win regardless of what Damon asks for. If Damon looks for a raise, $10m would probably win.

      • Sam

        I don’t think that’s what it’s based on. I believe it’s based on how you performed within the parameters of your last contract and people almost never get paycuts. Damon had a good year and therefore would likely get a raise.

        • Ed

          It’s exactly what it’s based on.

          People rarely get pay cuts because most arbitration cases are for players under team control, who receive salaries less than their free agent values. Each time they go to arbitration, they get closer to their free agent value. Within that setup, if you’re worthy of a pay cut, then you regressed really far and probably aren’t going to be wanted back.

  • Mac

    Damon – Yes. No brainer. We would take him at a higher salary for 1 year. Gives us a chance to see a little bit of A-Jax and what he can do before making a longer term solution.

    Nady – Yes. The injury concern is there. But it is still low risk, high reward.

    Matsui – Hell No

    Pettitte – Doesn’t matter. He deserves a slight increase, doesn’t look like he would sign with anyone else anyway.

    • Ed

      Nady – Yes. The injury concern is there. But it is still low risk, high reward.

      There’s about a 30% success rate on Tommy John surgery the second time around, and Nady’s been about league average for most of his career.

      It’s high risk, low reward.

  • Mac

    Low money. 1 Year. He is not a pitcher.

    I don’t consider that high risk.

  • http://WayneD WayneD

    Quote from Mac:

    “Pettitte – Doesn’t matter. He deserves a slight increase, doesn’t look like he would sign with anyone else anyway.”

    This is EXACTLY the type of thinking that lost us Andy to the Astros some years back. We desperately need Andy again next year or we’re royally screwed. And the Yankees need to show some belated thanks and respect for what he’s done in his career here by offering arbitration. If they once again refuse to offer him arb, my bet is that he retires with the one for the thumb.

    If Andy isn’t back, we’ll have to either sign Lackey for more years and dollars than advisable, or trade a bunch of potentially great players for Doc. I don’t like either of those prospect, even though Doc is a phenominal pitcher & would make us unstoppable if our key guys remain healthy.

    CC, Doc, AJ, and Andy might be the greatest starting four in history, but the Yankees are close to their max-out dollar amount on players & signing Doc would make it difficult to fill the LF hole with anyone of real value. But, god, it would be nice to have him, wouldn’t it? What a staff that would be with Hughes or Joba in the five spot. Wow!

    • Mac

      First off, by saying “Doesn’t Matter” I am speaking to this thread which relates to who will be offered arbitration. Not whether or not we should sign him. Whether the Yankees offer Pettitte arbitration is irrelevant to the reason why he signed with the Astro’s in 2004.

      He did not sign with the Yankees in 2004 because the Yankees did not treat him the way he thought he deserved to be treated. He also was not offered arbitration last year and he ended up signing anyway.

      • http://WayneD WayneD

        Mac, I understood your context and I by no means meant to belittle your comment. My concern is how ANDY perceives be snubbed once again on an arb offer. He left in 2004 because he felt he wasn’t treated with the proper respect (and I agree with him on that: the Yankees took his loyalty for granted back then).

        But Andy has his fifth ring now, and I’m sure he’s financially secure, so there isn’t much incentive for him to come back to the Yankees at this point — other than loyalty to the organization. But loyalty is a two way street & it’s time the Yankees shower Andy with gratitude for all he’s done. Overpay he some for one year, he’s earned that gratitude.

        Andy’s no longer a 1 or 2 starter, but he’s still a great competitor, a better than league average 3rd or 4th starter, and one of the best lefties in Yankee History! We need to entice him back for one more year by showering him with affection, not ignore him & hope he comes back.

        Who’s our #3 if he doesn’t come back? Joba? Hughes? Are you kidding me? At this point, do you really want to rely on Joba or Hughes to win the clinching game in every round of the playoffs — like Andy did this year? Hopefully, they both get to that point, but they’re not even close right now.

        One question to everybody: Does anybody know if any pitcher in modern playoff history has ever before won the clinching game in all three rounds? It would seem unlikely, but it would be interesting to know for sure. If Andy’s the only one (or one of 2 or 3), it’s a great trivia question for the future.

  • http://WayneD WayneD

    Just wanted to throw an idea out their for everyone to comment on.

    Trade Joba, Hughes, Posada, and Gardner or Melky (their choice) to Seattle for King Felix. I would even consider (but reluctantly so) substituting Montero for Gardner/Melky. That substitution might well get the deal done.

    Why Posada? Four reasons:

    1) He’s done defensively; he’s getting to be embarassing behind the plate, but he’ still better than anything Seattle has at catcher.

    2) King Felix is young enough & dominate enough to be around for a handful of WS titles.

    3) With a starting four of CC, King Felix, & Andy, we could easily get by with the great defense of Molina & Cervelli behind the plate.

    4) Trading Posada would re-open the DH spot for Matsui for two years. He’s still one of the best hitters in baseball, and he’s definately a better all-around hitter than Posada — and they both carry about the same injury risk at this point in their careers.

    We owe a great thanks to Jorge for all he’s done for the Yankees, but if I see him watch another runner rounding the bases instead of RUNNING to get a passed ball, I’m going to scream! Jorge, run & pick up the freakin’ ball, then throw wherever Jeter, A-Rod, or Tex tells you to throw to! You’re a veteran for god’s sake; I expect that kind of stupidity from Cano or Melky, but not a 13-year veteran!

    • Johnny

      one issue, I think we will trade either Joba or Hughes and not both but could be wrong and I trust Halladay more than Felix but I can be greedy and say why not both right? Hughes in one deal, Kennedy in another. Pujols and Mauer and Beltran could join us next year assuming that is allowed even which is one reason I want Jeter’s extension over with. Sheets vs Lackey though as well as Holliday vs Bay vs Damon. I think Nady is gone but we shall see, an arbitration chance is ok with me for him, Damon needs a deal, not likely going to accept arbitration and Andy and Matsui a nice 1 yr deal each.

    • Johnny

      forgot to mention, you weren’t the only one mad about seeing Posada’s base running skills and smarts during the playoffs.

  • Johnny

    I think the Yankees should flat out try to get a deal done with Damon and Matsui and Andy, Damon a 3 yr deal possible 4th and 1 yr each for Matsui and Andy. I am hoping we can trade for Halladay and then get Lackey or Sheets but next year I think Beltran will be free whom I like more than Granderson and wish we would have signed him a few years ago instead or addition to someone named carl pavano. Mauer is doing the smart thing by putting a deadline on his extension, there’s isn’t a good reason for him not to become a free agent and don’t forget about Albert Pujols as well, Mauer replacing Posada, Pujols splitting time at 1B and being our DH, Beltran our new CF, things could become very very good. Hope we get Halladay though for sure! Let’s Go Yankees! On draft picks sure it be nice to get some but when the team is always going to set presently, you don’t need alot of draft picks so I understand why the Yankees do things that way. Was nice for John Henry to stand up for the Yankees.