The Arbitration Question: To Offer Or Not?


(AP Photo/Kathy Willens)

The free agent signing period officially starts this Sunday, but free agency won’t begin in earnest until later this month when we know which players will force teams to give up a draft pick to sign them. Some are obvious; the Cliff Lees, the Carl Crawfords, the Jayson Werths, those are the ones we don’t have to think about. They’re going to cost you. But with players like Paul Konerko, Carl Pavano, and Frank Francisco, it’s not so obvious. That’s why we have to take the wait and see approach.

Quick primer on the rules: If a team offers one of their free agents arbitration and he signs elsewhere, they’ll receive two draft picks if he’s a Type-A (the signing team’s top pick and a sandwich rounder pulled out of the air) or just one if he’s a Type-B (the sandwich rounder). Of course the player has to decline that arbitration offer for the team to be entitled to that compensation, which is no longer a given these days. Salaries are coming back down to Earth and teams are shying away from older players, so the chances of these guys accepting arbitration has gone up considerably in recent years. But you knew that already.

The Yankees haven’t offered arbitration to any of their free agents in the last two offseasons, and there’s really no reason to expect them to alter that practice now. The last compensation pick they received for losing a free agent came way back in 2008, when they gained a supplemental first round pick for losing Luis Vizcaino (they used the pick on Jeremy Bleich). Yeah, it’s been a while.

Derek Jeter, Mariano Rivera, and Andy Pettitte all qualified as Type-A free agents, and we know that it’s pretty much Yankees or bust for those three. Since the chances of them signing with another club are tiny, I don’t see the point in offering them arbitration. There’s nothing to be gained by it, and an offer would put all of the risk on the Yankees. There are worse things in the world than having those three on well, well above-market rate one-year deals, but I don’t think that’s enough of a reason to assume the risk given the tiny chances of the reward. Perhaps you feel differently.

Javy Vazquez is a no-brainer. He’s a Type-B who made $11.5M in 2010, and of course he was awful (-0.2 fWAR) due to stuff that deteriorated as the season progressed. The best course of action is to simply cut ties and walk away. I know the Yanks considered two draft picks to be part of the deal (he was a Type-A once upon a time), but things didn’t work out. No sense in trying to force the issue, let Javy walk with no stings attached. That leaves two more decisions to be made…

Lance Berkman

When the Yanks acquired Berkman at the trade deadline, he waved his no-trade clause under the condition that they would not pick up his $15M option for 2011. Usually it’s the other way around, the player wants the option picked up in exchange for agreeing to the deal. I guess that means Puma really doesn’t want to stick around and plans on exploring the open market this winter.

(AP Photo/Paul Battaglia)

Under normal circumstances, there’s no way you’d offer Berkman arbitration given his bloated salary and declining production (yes, I know he was pretty good with the Yanks, but his .345 season wOBA was the worse of his career), but this isn’t a normal situation. Berkman’s demonstrated a desire to get out of town by demanding that they decline his rather lucrative option, and unless he’s had a change of heart over the last few months, I think they should offer Fat Elvis arbitration and hope he declines.

Yeah, it’s very risky given his salary and the team’s not infinite payroll, but I think there’s enough writing on the wall to risk it. Granted, it’s not my money, so what do I know. If Berkman was a Type-A instead of a Type-B, I definitely wouldn’t offer because a team is unlikely to give up a high pick to sign him. But since that’s not the case, I say go for it. Be bold.

Kerry Wood

Wood earned $10.5M this year, which is a boat load for a reliever, even a closer (which he was at the start of the year). In fact, he was the seventh highest paid relief pitcher in baseball this season, just ahead of B.J. Ryan. Yeah, the Blue Jays are still paying that guy.

Anyway, Wood (a Type-B like Berkman) will probably be able to find a job closing games somewhere, but he’s not going to sniff that kind of annual salary again. Remember, he was on the disabled list twice before the trade, and his 26 innings with the Yankees were unfathomable lucky (6.23 BB/9, .235 BABIP, 98.1% strand rate). Considering those three things (improbability of finding that much money on the market, his health track record, and unsustainably good performance), I’d wish Kerry good luck and decline to offer him arbitration. If he accepts and you’re stuck with a $11-12M setup man … yikes. The Yanks have money, but that doesn’t mean they should spend it stupidly. Sorry Kerry.

* * *

So assuming the Yanks offer arbitration to Berkman and Berkman only, they’ll receive one extra draft pick next year if/when he declines. Not much, but it’s better than nothing in a stacked draft class, especially when the Yanks are expected to forfeit their first round pick to sign a Type-A free agent of some kind. The deadline to offer arbitration is Nov. 23rd and players then have seven days to accept or decline, so this is going to sneak up before we know it.

Categories : Hot Stove League


  1. Jake H says:

    I would offer it to Berkman and Javy. They both don’t want to be here. No way Javy wants to be on this team. He wants the NL east.

  2. I’m the exact opposite. I don’t offer to Berkman and do offer to Kerry.

    I think despite Berkman’s insistence that his option not be picked up, he’s the one more likely to accept an arb offer because he stands to make less money on the market this winter than Wood does (because he’s part of the glut of marginal 1B/DH guys who never make money anymore, and Wood’s a closer) and because he probably makes more in arb than Wood does.

    Furthermore, if we end up stuck with one of those players thanks to an accepted arb offer, I’d much rather be stuck with the useful Wood than the less useful Berkman.

    • Mike HC says:

      What happened to Pettitte, Lee and chicken feed? That went out the window in just one post?

      Wood for over 10 million would be a terrible scenario in my opinion.

      • I’m anticipating he turns it down and we’re not saddled with him.

        If we are, though, he’s tradeable.

        • Clay Bellinger says:

          He’d surely be tradeable, but I would think the Yanks would have to eat some salary to deal him. As great as he was for us, I don’t see any teams offering him a 1 year $11 mil deal over the offseason.

        • Mike HC says:

          Not even considering the fact that arbitration further hurts a players value, I doubt Wood will get more in free agency than he would in arbitration. I would anticipate he accepts the arbitration offer.

          And I would not consider Wood at over 10 million “tradeable.”

    • Clay Bellinger says:

      Wouldn’t Wood’s arbitration offer be more than he’d get on the FA market too?

      • rbizzler says:

        More money, but a lesser role. And maybe lesser years if there is a team out there dumb enough to offer him multiple years (I doubt it but you never know).

        • Clay Bellinger says:

          True…it leaves a lot in his hands to weigh out though. Does he play it safe and take the say $11 mil arb offer and just be the set-up guy for a good team? or does he go after the 2 year say $14 mil deal and a shot to close again? There’s a chance that he just plays it safe and takes the money.

          • rbizzler says:

            Oh, I agree. If this were say the 2001 offseason, offering Wood arb to Wood would be a no-brainer. It is a shame that FO’s have gotten smarter and the whole notion of a ‘closer mentality’ is fading fast. Teams are willing to throw young 2-pitch guys into that role, when before you needed a ‘veteran presence’ in the back-end of the bullpen.

  3. candyforstalin says:

    no arbitration offers for me, thank you.

  4. Thomas says:

    I wouldn’t offer it to any of the three (Javy, Berkman, Wood). I think any of the three might accept and the cost to the payroll would just be too high for the value they would offer.

    • GermanYankee says:


      offering Javy arbitration would be the dumbest move for quite a while. No way Javy will decline. Hell, for that amount of money he wouldn’t care if the Yanks say the only use they have for him is as the new pitching coach XD

  5. Andy In Sunny Daytona says:

    Hopefully Wood, Berkman and Javy sign with other teams before November 23rd. Instant picks.

  6. Mike HC says:

    “he waved his no-trade clause under the condition that they would not pick up his $15M option for 2011″

    That is like quitting right before you know you are going to get fired. Let us be honest, the Yanks were not going to pick up that 15 million dollar option unless there was literally a gun to Cashman’s head.

    And no way would I offer Berkman arbitration either. I would not be willing to pay him even close to the amount of money I’m sure he would get in arbitration. He is a definite pass for me.

  7. I’d offer to Berkman and Wood, they both are great baseball players that will get signed, worse thing that could happen is they play another year in pinstripes. Just so NO to Javy.

    • Clay Bellinger says:

      I agree that Berkman & Wood would be nice players to have on the squad, but at what price? It would be tough to have such an expensive part-time DH and set-up man digging into the budget. I’d decline on all 3 just to be safe…I don’t think it’s worth the risk.

      • I see the Berkman risk a little more than the Wood risk. However if the Yanks were gonna give up young ML ready talent for Soria for middle/late relief. It’s just money on a 1 year deal, if arb is accepted. I, personally offer to Berkman as well despite the risk, because the reward would be greater. I personally think he’s going back to the Astros but he could play as the 5th OF, couldn’t be much worse than Thames. How much possibly could he make in a arb hearing?

        • Clay Bellinger says:

          I could be wrong on this, but I think the Big Puma’s 2010 salary was like $14-$15 mil and an arbitration offer is rarely less than the previous year’s salary. That makes for an awfully expensive part-timer.

          • Yeah if he makes exactly what he did last year, no way. That is expensive. I thought it was like 60-75% of the last years salary, based on performance and comparable contracts and performance of like players. I’m not really sure exactly how the arb contracts are determined.

  8. Johnny O says:

    I’d do Wood too. He will be a closer somewhere next year after his audition with the Yanks. And while he might not get the $10M per year, he’ll get a multi year deal and this will probably be worth it for him since he’s always one injury away from retirement. I’d bet the Angels give him 2/$16M.

  9. candyforstalin says:

    i’m curious: what do people think berkman will get as a free agent?

    • I think he goes back to the Astros for a team friendly deal. Maybe 3/22?

    • Mike HC says:

      2 years for 16-18 million? 3 for 25?

      • rbizzler says:

        If this is the case, I most definitely offer him arb. If he can get a multi-year deal in a place of his choosing, he is not going year-to-year for a few million extra dollars.

        Per BR, he has made 94+ million bones in his career. I would wager that he would rather choose his own destination rather than soak up a few million extra in a limited role in NY.

        Then again, he could be a greedy SOB and want the extra dough.

        • Mike HC says:

          Wouldn’t it be more than a couple extra million dollars though. He made like 14.5 million this past season. I don’t know how much he would make in arbitration but it could be considerably more than 8 million. Not just a few million extra, not that that is something to sneeze at either.

          • rbizzler says:

            Yeah, but there is value in a multi-year deal. Especially for a guy like Berkman who has made plenty of cash already. The way that the market has looked the last few offseasons, DH/1b types have had a hard time getting multi-year deals. If Berkman can get 2-3 years at decent money (like the 8-9 million that you suggested) in a situation that he likes, I think he takes the stability over going year-to-year.

            • Mike HC says:

              It may very well work out like that. But remember he most probably won’t know the other offers out there when he has to make the arbitration decision. So there is a risk that guys like Thomas and Tommie are right and he will get one for six tops and maybe even less than that. With that being the risk that, it might not be worth turning down the offer.

              Who knows really?

              • rbizzler says:

                Well, hopefully Cash knows and he makes the right call. These situations are exactly why Cash hasn’t offered arb to anyone the past few years. It is a total crapshoot, although with Berkman I would be willing to offer arb with the belief that he would prefer to choose his own destination.

                As Thomas has said below, Berkman only has a week to gauge the market and decide whether or not he accepts arb. My guess is that he would decline, but Cash gets paid the big bucks to put his ass and budget on the line with these decisions.

                • Mike HC says:

                  Yea, it really is an interesting situation to discuss.

                  I guess I would not try to get into the players head unless I had a reliable tip and source that he would turn down arbitration. If it was just a logical hunch, I would go strictly by how I value the player.

    • Thomas says:

      Assumming he is willing to sign for the most money, 1 year $6M with an option at $8 M million.

      • Mike HC says:

        That is the least possible amount he will get. Not the most.

        • He’s a 35 year old DH coming off a .248/.368/.413 season (career lows across the board) who looks like he can no longer hit lefties at all and is probably confined to the AL. He’s in the Pat Burrell zone.

          1/6M isn’t the lowest he’d get; 1/3M is probably the lowest he’d get. And nobody’s giving him 2/16-18M or 3/25M, that’s ridiculous. That’s Granderson/Swisher money.

          • Mike HC says:

            I could be a little high. I think one for 6 seems a little low though. Time will tell.

            • Thomas says:

              This is important. If Berkman (or Wood/Vazquez) think they can get this deal (2 or three years at $8-10M) on the market, then I think you offer the player arb and hope he stupidly declines. Thus, you get the picks, whether or not the player come close to getting his deal.

              It’s not just what the player is actually worth and what the team thinks he is worth, but also what the player thinks he is worth.

              This is one of the reasons I wish the Yankees had offered Abreu arbitration. Cashman correctly predicted the FA market (that the DH/OF would get little money), but Abreu did not. It always sounded like Abreu thought he’d find the 3 year $30-45 million deal until well into the offseason and thus probably would have rejected arb and let the Yankees get the picks.

              • Mike HC says:

                Your strategy is fine, just not the one I would go with. I would look at it strictly in terms of how much I value the player. If I don’t think he is worth the 15 million (berkman) or 11 million (wood) that they will probably get in arbitration, I would not offer arbitration. You can re sign them for better deals on the open market. It does not seem smart to offer to overpay someone pretty considerably just because you think he may turn it down and get a draft pick out of it.

          • rbizzler says:

            I don’t see him as a DH-only type. His defense has always been solid and he actually posted decent numbers at 1b last year at age 34 (3.7 UZR and 6.5 UZR/150).

            Like I said earlier, I think the Rangers are a good fit if they or Vlad decline his mutual option.

        • Thomas says:

          I don’t think a 35 year old, unathletic, average fielding 1B/DH, coming off the worst year of his career (that featured a massive platoon split) will do well on the market. I think he gets a deal similar to Vlad.

  10. Mike says:

    This may be a stupid question, but can a team offer arbitration after the FA has signed? It seems obvious that it’s a no, but considering a FA can sign before the deadline, I was curious if the previous team could grandfather in the arbitration offer somehow.

  11. TopChuckie says:

    If Berkman made the trade contingent on the Yanks declining the option, I would think it was also contingent on not offering arbitration or at least that would have been the logical implication. Berkman: “I’ll come for the rest of this season, but then I want to be free to go where I want.” I suspect back to Houston. The bottom line is the Yankees had to acknowledge and agree they understood he didn’t want to play another full season in NYC for even something in the neighborhood of $15M.

    • All the more reason to offer arbitration. If he didn’t want to play for 15M, he def won’t play for less.

      • Thomas says:

        Berkman said he wanted to be free to choose where he plays. He may still be willing to play in New York, he just didn’t want to be forced to play there if the Yankees picked up his option.

        Also, if he were to accept arb his salary would increase from the $14.5M he made last year. With his $2M buyout, Berkman could make $18M if the Yankees offered and he accepted arb.

        • Well played Thomas, well played!

          But, do you really think the arbitrators would reward 14M to him based on the large dip in the production. Don’t they judge the production when the deal was signed and compare his production against like players and assign a fair value, no less than 60-75% of the previous contract?

          I agree not offering arb if it’s almost a lock the arbitrators reward 100% of the last years salary.

      • TopChuckie says:

        I’m saying that by agreeing to not pick up his option I feel they either literally or implicitly also agreed not to offer arbitration. It would be quite disingenuous of the Yanks to play it like, “Ohhhhh, you said you didn’t want to play another year here on the $15M OPTION, we didn’t realize that meant you also didn’t want to play another year here after a $15M arbitration award. Sorry, our bad.”

  12. emcee says:

    I’m pretty sure I remember reading that it was the Astros who insisted the Yankees not pick up Berkman’s option. Not sure why that would be though.

    • JohnnyC says:

      Houston traded him because they told Berkman they weren’t picking up his option for 2011 in the first place. If anyone requested the option not be picked up, it was Berkman, not Houston. But Berkman may have misread his value not only to Houston but any other NL teams at all. The danger of there not being a real market for his services makes it too dangerous to offer Berkman arbitration.

      • “The danger of there not being a real market for his services makes it too dangerous to offer Berkman arbitration.”

        But it’s only dangerous if Berkman decides within a one week period in November that there’s no real market for him. He doesn’t get to wait until February to gauge the market, he has to make his decision in a short window of time relatively early in the free agency period.

  13. This won’t surprise anyone, considering my annual rants about arbitration decisions, but I agree with Mike on this one. I totally understand not offering arb to Berkman – it’s definitely a risky move – but I think I’d go for it. I just don’t think taking money to come back to NY as a part-time player or DH (or part-time DH) is something he’s interested in, even though it means a bigger payday for him.

  14. Klemy says:

    It would probably be in Berkman’s best interests to be a free agent this year, rather than after next season when Adrian Gonzalez and Albert Pujols could potentially reach the market. Maybe that played in to his desire to not have his option picked up this year?

    • Clay Bellinger says:

      I think that he has to accept if the Yanks were to offer arb…just from a financial standpoint alone. He’d be paid around &15 mil for one year, while he’d struggle to even find a 2 year $15 mil deal on the open market. Even if he had to force the Yanks to trade him for more playing time, the best bet for his pocket would be to take the arb offer.

      • Klemy says:

        Agreed. That’s a bigger deal than he’ll probably get for 2 years of play.

        It just seems like that might have been a reason to want his option declined to begin with.

  15. Joe M. says:

    To me, the simple answer is “Yes” to everyone. Contracts that players get through arbitration are not guaranteed. Players want the financial security that comes with a guaranteed deal; most will not accept arbitration for this reason.

  16. MikeD says:

    I’d do the opposite. I’d offer Wood arbitration because he wants to close. If he can get a two-year deal at $8 million per to be a closer, I think he takes that compared to a one-year deal on the Yankees to be a set-up man at $11 million or so.

    Berkman? Maybe he’s a genius. He tells the Yankees to not pick up his option to trick them into offering arbitration. He won’t get more than $3 or $4 million on a one year deal on the open markeet. He’ll get $15 million from arbitration. No way he turns that much money down.

    Yes on Woods. No on Berkman.

    • Mike HC says:

      Is that really a smart risk though? Getting an extra pick is nice, but not something that is irreplaceable. The Yanks can sign an extra international prospect if they want. Or decide to pick one of those big signing bonus players rather than a slot pick. I just don’t think gaining that extra pick is worth having Wood for 11 million dollars.

      In short, I think this extra draft pick is being overvalued.

      • I just don’t think gaining that extra pick is worth having Wood for 11 million dollars.

        But you’re not getting an extra pick for having Wood for 11M, you’re getting an extra pick for the potential risk of having Wood for 11M.

        It’s all about judging that risk and it’s likelihood. If you think the risk is low enough, you do it.

        • Mike HC says:

          Right. That is what I meant. Lazy wording on my part. I just don’t think that extra pick is worth the risk of vastly overpaying these guys.

  17. Bulldozer says:

    And my prediction is that no one gets offered.
    I would love to get picks though.

  18. Klemy says:

    I would probably go the route of not offering to anyone. I’d rather the security of knowing what I have tied up than risking it in this scenario. Glad it’s not my decision.

    • Bulldozer says:

      Seems like the Yanks enjoy roster/budget flexibilty more than picks. They can always draft overslot in later rounds. It’s not like the Yanks go full Theo on the draft even though they do spend.

  19. LunaticFringe says:

    Run this by me again. What’s the rationale for NOT offering Jeter/Rivera arbitration? Normally you don’t offer because you’re afraid they’d accept. Wouldn’t the Yankees be delighted if they accepted? What am I missing here?

    • Tom Swift says:

      A one year deal for Jeter would be just right. Let him get 3000 in pinstripes, and re-evaluate in 12 months. No way Jeter accepts arb. With Mo, it is dicier. He may end up more in arbitration, and he may just want a one year deal anyway.

  20. theyankeewarrior says:

    I understand we can’t have everything when it comes to FA’s, but it is getting a bit annoying to watch the Red Sox collect 4-6 draft picks each year while we give ours away.

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