Each offseason, free agents are ranked based on their previous two years’ performance. The top free agents are classified as Type A, and the second tier are classified as Type B. These, together, make up a small percentage of the total free agent class. If a team offers a Type A free agent arbitration and he refuses, the team that signs him (assuming one does) then has to give up its first round pick (or second round pick, if the signing team’s first round pick is in the top 10) to the Type A free agent’s former team. The former team also gets a “sandwich” pick, in between the first and second rounds (though the signing team doesn’t give anything up for this). For Type B free agents, his prior team gets a sandwich pick, and the new team doesn’t give up anything.
Before 2008, it was rare for a team to not offer a departing Type A free agent arbitration. Simply be being good enough to earn that classification, the player was almost certainly good enough to get more than a one year deal, and so the team offering arb wasn’t risking much–you’d either end up with a good player at a below market rate for one year, or 2 valuable draft picks. Then came the offseason of 2008, along with the great recession, the fall of Lehman Brothers, Bernie Madoff, and a suddenly thrifty group of MLB owners. Last season, the Yankees did not offer arbitration to departing Type A free agents Jason Giambi, Mike Mussina, Andy Pettitte, or Bobby Abreu. Amazingly, this ended up being the proper choice. Mussina wasn’t coming back either way, Pettitte resigned cheaply with the Yankes, and Giambi and Abreu signed elsewhere for relative pennies.
This year, Damon (Type A), Matsui Nady and Pettitte (Type B) are Elias-ranked free agents, and none were offered arbitration. I recognize that I’m still trying to live down my incorrect stance last year, but here I go, into the fray once more. Matsui, Molina, Hairston and and Hinske were unranked. [Thanks to reader Brien Jackson for catching the error!]
These situations are not that similar. On one hand, these three players are all on the downside of their careers and both made a good bit of coin this past season. On the other hand, while last season the Yankees had an overabundance of OF and DH types (making Giambi and Abreu expendable), this year they do not. If they do not resign Damon and Matsui, the team will be in the market for both a left fielder and a DH. Having a place to stash both players on the roster cuts the downside tremendously–at worst the Yankees would be stuck overpaying for one year for a player that they could legitimately use. The upside to not offering these two arbitration is that the team can now negotiate with them without the price floor of 80% of last season’s pay. The downside is, they’re both useful players, and will likely be signed elsewhere (and the Yanks don’t get compensation picks if they do).
The Yankees also just handed the Red Sox a gift in their negotiations with Matt Holliday and Jason Bay, both of whom are going to get contracts in excess of $60 million (way in excess, in Holliday’s case). Free agent prices get determined by supply and demand–not by quality. The best players on the FA market will always get paid, even if they’re not great relative to last year’s best FA players. Jason Bay and Matt Holliday don’t sniff Mark Teixeira’s upside, for instance. John Lackey is no C.C. Sabathia. And next season, the list of possible FAs is droolworthy (Cliff Lee, Roy Halladay, Carl Crawford, to name a few). If the Sox want to skip out on the pricier FAs and go for the next tier down, the Yankees just provided them with a solid target in Johnny Damon, whose terrible throwing arm would be mitigated by the shortest LF in MLB at Fenway. On a one year deal, he’s got tremendous upside. And as David Ortiz continues to fade into the background, Hideki Matsui could certainly slot in at DH for the Sox. [EDIT NOTE: Of course, RedSox fans, and likely the front office, will have NOTHING to do with Damon reappearing in Fenway and the Sox aren’t signing a second DH, much less one from the Yanks who bumps legend Ortiz.]
Now, don’t get me wrong. The real reason I’m ticked about the non-offers of arbitration is the draft picks, and the fact that Damon especially really makes sense on a one year deal. Bay and Holliday will be tremendously overpaid in both years and prospects, and if the Yankees want to lock in another long term deal they should do so with higher tier talent. Melky would be a below-average corner outfielder, and this would leave the Yankees with only 3 outfielders (and Austin Jackson is not ready yet). Mike Cameron (right) is a good option, but moving him to LF really kills his value (which is top level in CF, at least in the near term). And who is going to DH for the Yankees next season? Juan Miranda? I suppose there are a number of aging sluggers who are obtainable on a one year deal (maybe Cashman finally signs Vlad Guerrerro?) But Matsui is a fan favorite, a revenue driver, and the guess here is he is signed by the Mariners to a two year deal.
Andy Pettitte is probably more an issue of them having an understanding, and not wanting to step on Andy’s toes. He’s made it abundantly clear that the only team he’ll pitch for is the Yankees, so offering him arbitration just presents the opportunity to get in a fight with one of the Yankees’ favored sons.
Will I end up eating a healthy dose of crow by the end of this offseason, after Damon and Matsui get no good offers and slink back to the Bronx on tiny one year deals? I sure hope so–but I doubt it.