Gaming the Arbitration System
Rany Jazayerli has a great post that highlights something I have always hoped the Nationals would do in their rebuilding efforts.
Game the arbitration system with Type B free agents.
To put it most simply, the Royals offered SS Mark Grudzielanek arbitration right before the deadline with the knowledge he would reject it and Kansas City would be awarded a supplemental first round selection (sandwich pick) in the 2009 draft if/when he signs elsewhere.
Jazayerli suggests that there might be some sort of gentleman’s agreement between Grudzielanek and the Royals wherein, Grudzielanek refuses the arbitration and signs with another team. Then according to the CBA, the Royals would receive a sandwich pick after the 1st round.
There are fifteen Type A free agents and nine Type B free agents who were offered arbitration, so there is a possibility of a twenty-four pick supplemental first round. Keeping in mind that there will be three extra selections in the first round (Crow, Fields, & Cole) and one pick to Pittsburgh for an unsigned Tanner Scheppers at #48A; and guesstimating that Grudzielanek has right around the lowest Elias ranking (that’s how the picks are ordered), that means the Royals will see no worse than the 58th pick in the 2009 draft.
That’s not a bad return for an aging middle infielder.
This is not a new thing, as Jazayerli points out
After the 2006 season, the San Diego Padres hit upon a bonanza of extra draft picks, as no fewer than five of their free agents signed with other teams, earning the Padres compensation. One of them, Woody Williams, was a Type A free agent, earning them a supplemental first rounder as well as the Astros’ second-round pick. (How’s that working out for you, Drayton?) Then Type A free agent Dave Roberts signed with the Giants, earning another supplemental first rounder and a fourth-rounder (because the Giants were busy giving up all their higher draft picks to other teams.) Then things got interesting.
In fact, the Nationals took advantage of the compensation system after the 2005 season turning Esteban Loaiza and Hector Carrasco into draft picks that netted them Colton Willems and Stephen Englund. They turned the trick again after the 2006 season turning Jose Guillen into a draft pick that netted them Michael Burgess.
This is precisely what I have wanted to see the Nats do in the past two or three hot stove periods. Sign some middle-tier free agents who hold better than a coin flip of becoming Type B free agents. The only free agents the Nats had this off-season were Odalis Perez and Aaron Boone and neither were Type B free agents, so the picks were not there for the taking.
It’s a delicate process and it really only works with Type B free agents, since a signing team loses nothing for agreeing to a deal with them. A pick is simply created and assigned to the Nats as compensation.
The only issue a team can run into is if the player accepts arbitration. This can lead to circumstances where a team is stuck paying a player more than they would like to on a one-year basis (this is rumored to be the case with Type A free agent Adam Dunn who was not offered arbitration by Arizona out of fear he would accept it and end up with a huge one-year deal the D-Backs were unwilling to pay). But if the Nats make these unofficial handshake deals with the player where he will refuse arbitration, they can stockpile picks in the 50-70 range with designs towards restocking the farm system.
I will agree that it’s a gamble. When the Nats acquired Felipe Lopez and Austin Kearns, it was thought to be a safe bet that at worst both would end up as Type B free agents at the end of this past season. Kearns is barely a Type B (though he agreed to a contract extension in January 2007 removing any chance at compensation) while Lopez slumped so badly that he lost Type B status. But a team like the Nats needs to take these gambles in order to take advantage of the system in place and accrue draft picks anyway they can.
Looking ahead to next year’s free agent period, the Nats have six players who can become free agents after the 2009 season.
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Nick Johnson
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Ronnie Belliard, Type B
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Willie Harris
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Austin Kearns (2010 option), Type B
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Dmitri Young, Type B
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Jesus Colome
The chances of Johnson performing well enough tobecome a Type B are remote. Belliard seems likely to retain his Type B status. If Harris performs as he did in 2008, he could move into the Type B range. Kearns is a borderline Type B and would need a solidly average season to keep that ranking, a year like 2008 would likely drop him out of Type B status. Young is highly unlikely to retain his Type B status, especially if he spends a majority of the season in Syracuse. Colome is an interesting case as relief pitchers show more volatility in moving in/out of Type B status. I don’t believe it’s likely but if Colome can become a consistently average reliever, he could get Type B. So, in the best case scenario they’ll have four Type B guys. This is important to watch in 2009 as these six of the most likely to be traded during the 2009 season. The Nats will have to determine whether they return in a trade is better than what they could get in potential draft picks.
That brings me to what I believe the Nats should be keying in on this off-season. I’d hope they would target some of the Type A and B guys who were not offered arbitration. Guys like Juan Uribe, Mark Loretta, Randy Johnson, Braden Looper, Brad Penny, and Randy Wolf.
I am not suggesting that they target them only for their Type B status, but if the money is comparable between one of the aforementioned and a guy not likely to be a Type B (even with an unexpectedly good performance), I’d lean towards one of the former. Target these guys with one-year deals (if possible) but more likely two-year offers where the Nats can turn them into 2011 draft picks, if they’re fortunate.
It’s not the perfect way to build a winner but it’s a step a rebuilding team should consider to take advantage of the system in place.
ala Soriano.
What incentive would a player have to agree to not accept a team’s offer to arbitrate? Pretty sure that any kind of payment would violate MLB rules. The danger is that a club offers arbitration, the player winks that he will not accept it, the market appears softer than the player anticipated, and the player decides to accept the arbitration offer. Yipes.
Would it not just be simpler to sign their top draft picks and pick the best players regardless of signablitity? The last few drafts do not seem to follow these basic rules of building. (Crow? Ross?)
Interesting concept, Brian. If a 1-yr contract yields a player of “a certain age” searching for the final good contract can play up to that level, great – it works. It can backfire, however (see Pilchard’s comment & your reference of FLop, as well as Od.Perez / PLoD as further examples). Management has to be VERY careful when using this strategy; I’m worried that Bowden’s “beat the bushes & gather up anything that runs toward you” attitude is best suited here.
Oops – last line should have finished with … attitude isn’t best suited here.
Take a look at the Type B’s that weren’t offered arbitration
Catchers Paul Lo Duca (37) – Type B, not offered arb Ivan Rodriguez (37) – Type B, not offered arb Gregg Zaun (38) – Type B, not offered arb
Infielders Jeff Kent (41) – Type B, not offered arb Mark Loretta (37) – Type B, not offered arb Juan Uribe (30) – Type B, not offered arb
Left fielders Moises Alou (42) – Type B, not offered arb Garret Anderson (37) – Type B, not offered arb Luis Gonzalez (41) – Type B, not offered arb
Right fielders Ken Griffey Jr. (39) – Type B, not offered arb
DHs Frank Thomas (41) – Type B, not offered arb
Starting pitchers Randy Johnson (45) – Type B, not offered arb Braden Looper (34) – Type B, not offered arb Greg Maddux (43) – Type B, not offered arb Brad Penny (31) – Type B, not offered arb John Smoltz (42) – Type B, not offered arb Randy Wolf (32) – Type B, not offered arb
Closers Eric Gagne (33) – Type B, not offered arb Jason Isringhausen (36) – Type B, not offered arb
Middle relievers Luis Ayala (31) – Type B, not offered arb Joe Beimel (32) – Type B, not offered arb Alan Embree (39) – Type B, not offered arb Dennys Reyes (32) – Type B, offered arb Arthur Rhodes (39) – Type B, not offered arb Rudy Seanez (40) – Type B, not offered arb
With the exception of the relievers, don’t most of these guys look like Type A’s from 3-5 years ago?
Pilchard – It’s not illegal. Unethical, maybe. The scenario you suggested is the risk. The players have a timeline to accept/reject it so it’s not an unending deadline. Type B guys on one year deals aren’t ideal, but aren’t back breakers.
JayB – Of course, signing the picks they have is the first step. I just see untapped value in having two or three other top 100 picks. I like their chances of finding value when they have 5 or 6 top 100 picks instead of 2 or 3.
On top of that, signing these Type B players could prove to be equally, if not more, beneficial at the trade deadline. If Brad Penny could put together another seasons like he did in 2004-2007, he’d be worth a couple of prospects to a contender, much more than just a #60 supplemental pick.
I wish the Nats had done this with Young in 2007 and Soriano the year before.
Amazing information…absolutely amazing…
Agreed Brian,
If you were executing the plan I would be much happier with more picks. My point was to keep recent history alive….more picks for this front office does not mean a better team. When do we fire Jim Bowden?
JayB:
Why do you want to fire Bowden?
Did Bowden refuse to go over a set limit to sign his top draft pick, or was he given that limit?
Was it Bowden’s idea to make some other midnight signings on draft day only because he had freed-up money from not signing Crow, or was he given a small budget to work with?
Was it Bowden’s idea to only focus on international kids who would sign for the smallest bonuses? Did Bowden not see talent in the other players who had higher market value?
Was it Bowden’s idea only to trade for players who have small contracts, or was he given those marching orders? That’s the way you stockpile young, talented players–you get quality young vets you can trade for prospects or who will give you comp picks after they finish playing for you. But Bowden never gets to sign those or trade for those. His fault?
Has it been Bowden’s idea not to more aggressively lock up Zim long term?
Was it Bowden’s idea to determine that he would not go over $5 million (Lo Duca) for any player in last year’s free agent market?
Sure, Bowden has a great job and is making big bucks. But he has never worked for an organization that would enable him to reveal his talents. He seems pretty creative to me working within the Nats’ financial constraints–essentially the constraints of a small market team, like the Reds.
I would love it if someone could prove me wrong on these points (like the Lerners could do this off-season).