By the time the dust settled last night, only two players accepted their clubs’ offers of arbitration. Of the players I thought might accept — Jason Varitek, Jon Garland and even Mark Grudzielanek — none accepted. So I have to wonder if the Yanks misread the market. Should they have offered arbitration to Bobby Abreu and Ivan Rodriguez? Of course, their decision would have impacted the Adam Dunn and Pat Burrell decisions as well, and it’s really hard to play the “What If?” game here. Yet, I wonder who is making the bigger mistake: the second-tier players for not accepting arbitration or the risk- and cost-averse clubs who simply do not want these players around at any cost anymore?
Joe Sheehan dissents. I quote at length:
The choice for the club is pretty simple. If the player is valuable enough to warrant a one-year contract, offer him arbitration. You will get draft-pick compensation if he signs elsewhere, and if he does not, you will have a good player signed to a one-year deal…
The Yankees made a mistake by not offering arbitration to either [Bobby Abreu or Andy Pettitte], the biggest mistakes any team made in this round of decisions. For a team with the Yankees’ revenues, especially as they move into an ATM with foul poles, to decline the services of above-average players or draft picks in the event of their departure is a stunning waste of resources. Bobby Abreu projects as a five- or six-win player, Pettitte a bit below that…
Certainly there’s no baseball reason to not want either player. In Abreu’s absence, the Yankees nomnally have an outfield of Xavier Nady, Johnny Damon, Melky Cabrera and Hideki Matsui, with Nick Swisher at first base. Abreu is better than all of those players, and if having him would create a logjam, it does so by forcing inferior talent to the bench, the waiver wire or the trade market. Pettitte was the team’s #3 starter last year, and would project as the #4 even if the Yankees were to sign multiple starters in the free-agent market.
All of that assumes, of course, that the players accept arbitration, foregoing multi-year contracts at market salaries to take a one-year contract with the Yankees. The more likely scenario is that both players would sign elsewhere (or in Pettitte’s case, retire), allowing the Yankees to collect two draft picks for each, either a #1 and a sandwich pick or a #2 and a sandwich pick. Even with the Yankees’…mixed…record in the draft of late, forfeiting the right to those picks is an enormous waste
Two days ago, the Yankees had assets in Abreu and Pettitte that could have been considered short-term investments with minimal risk and fairly certain benefit (were they to rejoin the club), or long-term investments with more risk and uncertain benefit, but higher upside (were they to become draft picks). Now, they have nothing. How a team with the cash reserves of the Yankees can make a choice like that is inexplicable, and recalls the decision to forego the services of Carlos Beltran three years ago, a decision also motivated by short-term cash concerns.
I think Sheehan is underestimating roster flexibility and the economic impact the market conditions have on baseball. I see that Abreu may be above average even in decline, but if he accepts arbitration and earns $18 million, that’s a hefty payday and money the Yanks could be using elsewhere.
I also think he’s overvaluing Abreu. PECOTA ’08 pegged Abreu at a 14.7 maximum VORP and a comparable salary of $7,300,000. Granted, Abreu in 2008 reached his 75 percentile in PECOTA. So we’d probably have to adjust upward by a bit for 2009. He’ll probably end up with more than that stingy salary projection, but should the Yanks risk paying him more than double his relative worth just for the chance of some draft picks?
In the end, we’ll never know if the Yanks made a mistake. By declining arbitration to Abreu, they made him a more attractive free agent. I still think it’s likely that Abreu would have accepted the Yanks’ offer. Pettitte is a tougher argument, but I expect him back in the Bronx in the end. Just something to think about right now though.
Scenario 1: The market for corner outfielders isn’t strong, and while Bobby Abreu wants a three-year, $45-million deal, no club, for a variety of reasons, would dole that out right now. The Yankees offer arbitration, and Abreu accepts. All of a sudden, the Yanks will have to pay a 35-year-old corner outfielder in the declining phase of his career at least $16 million and probably closer to $18 or $19 million. Not only does Abreu occupy a spot on the 40-man roster, but his decision to accept arbitration means the Yanks cannot go after a younger and cheaper or older but better and more expensive alternative.
Scenario 2: The market for corner outfielders past their prime isn’t strong. In fact, baseball executives feel that Abreu could command just a multi-year deal but only at an AAV of $8-$10 million. The Yanks know that, with this parameter in place, Abreu would do better to accept arbitration. So they don’t offer it to him. They know this makes Abreu a bit more attractive in the eyes of his potential suitors because he won’t cost a draft pick, but they’re willing to make that move in the name of fiscal and roster flexibility.
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If you’re the General Manager, what do you do? To me, the answer is simple, and the Yanks made the right move. They picked scenario two. In doing so, they forfeited the potential to receive two draft picks, but right now, it seems as though Abreu would have been in a position where arbitration was the better option. The Yanks knew and didn’t want to take that chance.
In the RAB piece for Newsday’s On the Yankees beat blog, Joe made a similar point yesterday, and it’s worth delving into the aftermath of this decision. It’s not easy to replace Bobby Abreu’s production, and I don’t think the Yanks are expecting Nick Swisher and Xavier Nady to produce at Abreu’s past levels.
But now without Abreu around — and it seems like he is definitely not coming back — the Yanks have options. They can take a good, long look at Manny Ramirez; they can explore Adam Dunn or Pat Burrell. They can spend on pitching and hope that their offense is good enough if their starters can be outstanding. No matter what, they aren’t locked in to an outlandish obligation to Bobby Abreu.
These days, we tend to overvalue draft picks, and yes, compensation picks can be rewarding. After all, the Yanks wouldn’t have Joba Chamberlain without them. In the end, though, they’re just draft picks that may or may come due in a few years’ time. The Yanks looked at the seemingly weak 2009 draft, they looked at where they needed to be right now, and they determined that Bobby Abreu and arbitration did not go hand-in-hand this year. It was the right decision.