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View Full Version : Impending FA, Arbitration and Draft Pick Compensation



Benihana
06-27-2011, 11:08 AM
Although the CBA is due to expire after this season and therefore could render all of this moot, the Reds have three players up for Free Agency that would currently qualify as a "Type A" Free Agent. This means that if the Reds offer these players arbitration, the Reds could get up to 2 first round picks (the team that signs them if they draft in the lower half of the first round must give up their pick, in addition to a guaranteed sandwich round pick). Assuming this part of the CBA is renewed, given the risks and potential rewards of offering arbitratation, what would you do?

Personally I would pick up Phillips' option, and offer arbitration to Cordero and Hernandez. I am admittedly bias, as I'm a sucker for having multiple high draft picks.

I think the trade market is showing us that there will always be interest in someone like Hernandez' services, so even if he accepts he should still have some trade value.

Ditto for Cordero, who is quietly having a career year. As Mariano Rivera and Trevor Hoffman have shown in recent years, closers who have made it this long can continue to be good through their late 30s, and therefore I believe Cordero should have trade value if the Reds determine he is too expensive to keep should he accept. My guess, however, is that he would decline arbitration and get a 2 or 3 year deal elsewhere (with a contender) leaving the Reds with two additional first round selections to restock the farm (not to mention payroll flexibility).

RedsManRick
06-27-2011, 11:19 AM
I could see offering Hernandez arb. Good catchers are hard to come by, he's showing no signs of slowing down and even if he accepted and didn't sign elsewhere and won, the price would be reasonable.

Cordero on the other hand is a regression bomb waiting to happen. That's not to say he's pitching poorly, he's not. He's pitched well. But his .169 BABIP is absurdly low, the 4th lowest in baseball. Even if you think pitchers have a fair amount of control of their BABIP, you're talking about a guy with a career .297 BABIP who is striking out fewer batters than he ever has before. Now, he's also demonstrating his best control since 2007, so the K dip isn't a big issue. But this isn't Craig Kimbrel who is absolutely destroying the league (until last night). This is a relief pitcher having a solid, but pedestrian year in terms of the things he can control, but who has benefited greatly from good fortune in the hit and earned run columns. And now that I just looked at his salary, I see that he's got a $12M team option for 2012 with a $1M buyout. Can they buy him out and still offer arb? Even if they could, I don't want to run the risk of retaining a decent reliever at the cost of 1/7th of our payroll. MLB has generally gotten much smarter about relievers over the last few years and I do not want to run the risk of having Cordero's contract on the books for another year.

Kc61
06-27-2011, 11:20 AM
Risk of offering arbitration is that the player accepts it.

I think the Reds should re-sign Cordero, if possible, for two years, with money deferred. The issue for negotiation may be a third year. If not, they should offer him arbitration since he likely will reject it. He would want a multi-year contract and will get one.

I just don't see another closer ready for the Reds. So, again, I would try to sign Cordero up for two years if possible. (The two year deal would replace his current expensive option.)

If the Reds fall out of it, I fully expect Razor to be traded at the deadline, or even after. He would have good value for a contender.
Mes is the future.

If Reds keep Ramon this year, then they may NOT want to offer him arb. He just may take it and, with a big year this season, could get a good contract. He is less likely to get a multi-year contract on the market since he is getting on in years.

Benihana
06-27-2011, 11:25 AM
My point is that I think both Cordero and Ramon would still have trade value if they accepted arbitration- even at their higher prices. Cordero on a one year deal has value unless he's making over $15MM. I think the fact that K-Rod is reportedly drawing interest on the trade market proves that. Plus, to Kc's point, I think the Reds could do worse than to have Cordero close games for one more season (although I doubt he'd accept arb, and would be willing to trade him if he did).

I agree that Ramon would be more likely to accept arb than Cordero, but I still think he would carry trade value because good catchers are hard to come by.

To say it another way, I would offer arb to both of them in order to get the draft pick compensation, and would feel confident that either could still be traded if they accept. I would not plan on either being on the team next year, despite my wish to offer them arb.

Kc61
06-27-2011, 11:35 AM
My point is that I think both Cordero and Ramon would still have trade value if they accepted arbitration- even at their higher prices. Cordero on a one year deal has value unless he's making over $15MM. I think the fact that K-Rod is reportedly drawing interest on the trade market proves that. Plus, to Kc's point, I think the Reds could do worse than to have Cordero close games for one more season (although I doubt he'd accept arb, and would be willing to trade him if he did).

I agree that Ramon would be more likely to accept arb than Cordero, but I still think he would carry trade value because good catchers are hard to come by.

To say it another way, I would offer arb to both of them in order to get the draft pick compensation, and would feel confident that either could still be traded if they accept. I would not plan on either being on the team next year, despite my wish to offer them arb.

If Ramon H accepts arbitration, I'm not sure it will be so easy to trade him. Other teams might not want to arbitrate with him. Other teams might not want to negotiate with him in an arbitration setting.

I don't think it's very common to get into an arb situation with a player and then trade him. It happens, but not that often.

Again, if the Reds fall out of it (I wonder where they will be on July 4th!) I would trade Ramon. For the rest of this year, he is a valuable chip.

Keep in mind also that the Reds don't have a track record of offering arbitration to their free agents. It would be a departure from their usual practice.

I do agree with you, though, that if the Reds don't re-sign Cordero they should DEFINITELY offer him arbitration. He will get a mult-year contract elsewhere and the Reds will get draft picks.

Benihana
06-27-2011, 11:41 AM
If Ramon H accepts arbitration, I'm not sure it will be so easy to trade him. Other teams might not want to arbitrate with him. Other teams might not want to negotiate with him in an arbitration setting.

I don't think it's very common to get into an arb situation with a player and then trade him. It happens, but not that often.

Again, if the Reds fall out of it (I wonder where they will be on July 4th!) I would trade Ramon. For the rest of this year, he is a valuable chip.

Keep in mind also that the Reds don't have a track record of offering arbitration to their free agents. It would be a departure from their usual practice.

I do agree with you, though, that if the Reds don't re-sign Cordero they should DEFINITELY offer him arbitration. He will get a mult-year contract elsewhere and the Reds will get draft picks.


With Hernandez, the Reds could arbitrate with him and still trade him before the season starts. Even if we get very little in return in terms of prospects, it would be worth the risk to see if he declines IMO.

dfs
06-27-2011, 11:46 AM
To say it another way, I would offer arb to both of them in order to get the draft pick compensation, and would feel confident that either could still be traded if they accept. I would not plan on either being on the team next year, despite my wish to offer them arb.

For years the reds as a franchise were so bad that we just got used to doing it this way. That time is over. The franchise needs to make decisions based on who they want on the 25 man roster and trust that player development will do their part.

I think they have to let one of either Hernandez or Hanigan go in order to make room for a AAA catcher that is hitting 320/399/536 and has already burned an option year.

I don't think there is any question that the front office will pick up Brandon Phillip's option.

Cordero is the interesting one. I wouldn't pick up that option, but I can understand that there are decent reasons to do so.

_Sir_Charles_
06-27-2011, 12:01 PM
I think they have to let one of either Hernandez or Hanigan go in order to make room for a AAA catcher that is hitting 320/399/536 and has already burned an option year.

How has Mesoraco burned an option? Maybe there's some rule I'm not aware of, but you can't use an option until he's promoted and sent back down, right?

dfs
06-27-2011, 12:06 PM
How has Mesoraco burned an option? Maybe there's some rule I'm not aware of, but you can't use an option until he's promoted and sent back down, right?

My mistake. I assumed Mes was on the 40 man. He's not.

Unfortunately, Grandal is.

Benihana
06-27-2011, 12:07 PM
For years the reds as a franchise were so bad that we just got used to doing it this way. That time is over. The franchise needs to make decisions based on who they want on the 25 man roster and trust that player development will do their part.

Disagree. Smart GMs also play for picks. See Billy Beane, Andrew Friedman, and Theo Epstein just to name a few.


I think they have to let one of either Hernandez or Hanigan go in order to make room for a AAA catcher that is hitting 320/399/536 and has already burned an option year.

Agree. Trade Hernandez if he accepts arb. Let him walk if he declines it. I'd also be OK trading him this year if the return was sufficient (ie Eric Surkamp). When did I suggest otherwise.


I don't think there is any question that the front office will pick up Brandon Phillip's option.

Cordero is the interesting one. I wouldn't pick up that option, but I can understand that there are decent reasons to do so.

Would not pick up Cordero's option, but would buy him out then offer him arb. That way if he declines and signs elsewhere, you get the picks.

PuffyPig
06-27-2011, 12:13 PM
There is zero chance we offer arbitation to Cordero.

cinreds21
06-27-2011, 12:18 PM
Teams don't offer guys arbitration for Type-A or B free agents and then trade them if they accept it. I believe it's a rule. You cannot trade a newly signed player until a certain date (June something I believe.) So it's not like the Reds can offer Ramon arbitration and he accepts and then they just trade him because they wanted the draft pick. That's why a lot of good players who are Type-A free agents are not offered arbitration because teams do not want them back and don't want to take the risk of that player accepting it and then they are stuck with them for another year.

Benihana
06-27-2011, 12:20 PM
Interesting perspective:

http://www.mlbtraderumors.com/2011/06/when-its-better-to-be-type-b.html

Both Ramon and Cordero could easily "fall" into the Type B category if their second half numbers decline. As this article points out, that could possibly be a good thing for the Reds.

camisadelgolf
06-27-2011, 03:44 PM
There's no way I'd offer Cordero arbitration because he would need to be offered a minimum of $9.6M. He'd be crazy not to accept. I'm open to offering arbitration to Ramon to keep him around for one more year, though. I would undoubtedly pick up Phillips' option, but I worry about what to do with him after next year.

What about the arbitration guys? Would you offer arbitration to Jeremy Hermida, Jose Arredondo, Jared Burton, Fred Lewis, etc.?

Benihana
06-27-2011, 03:52 PM
There's no way I'd offer Cordero arbitration because he would need to be offered a minimum of $9.6M. He'd be crazy not to accept. I'm open to offering arbitration to Ramon to keep him around for one more year, though. I would undoubtedly pick up Phillips' option, but I worry about what to do with him after next year.

What about the arbitration guys? Would you offer arbitration to Jeremy Hermida, Jose Arredondo, Jared Burton, Fred Lewis, etc.?

I'm not sure Cordero would accept a 1-year $9.6MM deal. This could be his last chance to get a multiyear deal. By accepting arbitration, he'd be one year closer to 40 without a multiyear contract. If I were him, I'd seek a 2 or 3 year contract at $8 or $9MM per rather than go year-to-year at this point, especially after the season he's having so far this year. I think he's likely to get it, too.

I'd pick up Phillips' option for 2012 but let him walk afterwards unless he was willing to sign a 3 or 4 year deal at $11MM per. If he requires more than $11MM annually (which he likely will), I'd offer him arb, let him walk and take the picks.

I would not offer arb to Hermida or Lewis. Too many options for LF in AAA (unless one or more of those guys is traded at the deadline.) Jury is still out on Arredondo and Burton.

bucksfan2
06-27-2011, 04:19 PM
I'm not sure Cordero would accept a 1-year $9.6MM deal. This could be his last chance to get a multiyear deal. By accepting arbitration, he'd be one year closer to 40 without a multiyear contract. If I were him, I'd seek a 2 or 3 year contract at $8 or $9MM per rather than go year-to-year at this point, especially after the season he's having so far this year. I think he's likely to get it, too.

I'd pick up Phillips' option for 2012 but let him walk afterwards unless he was willing to sign a 3 or 4 year deal at $11MM per. If he requires more than $11MM annually (which he likely will), I'd offer him arb, let him walk and take the picks.

I would not offer arb to Hermida or Lewis. Too many options for LF in AAA (unless one or more of those guys is traded at the deadline.) Jury is still out on Arredondo and Burton.

There is a big difference between the like of Phillips and Cordero. Cordero has shown to be a volatile closer during his tenure as a Red. Going forward you have to wonder if he will be able to land a closing job heading forward. I don't see a team paying him 10M/season over multiple seasons. Cordero really rolls the dice if he decides to run down arb and enter free agency. On a side note can a team buy a player out of his option and then offer him arb?

Phillis on the other hand is a guy who could demand a nice free agent contract when he enters FA. You pick up his option, try and sign him to an extension, all the while knowing that if he doesn't sign he will be a Type A FA. I don't see anything wrong with picking up his option for next season and then going from there.

Benihana
06-27-2011, 05:11 PM
There is a big difference between the like of Phillips and Cordero.

I don't think anyone would disagree with you on that point.


Cordero has shown to be a volatile closer during his tenure as a Red. Going forward you have to wonder if he will be able to land a closing job heading forward. I don't see a team paying him 10M/season over multiple seasons. Cordero really rolls the dice if he decides to run down arb and enter free agency. On a side note can a team buy a player out of his option and then offer him arb?

I could easily see a team giving him a 2-3 year deal at 8 or 9 per, as I said. I think there are multiple teams that would do that.


Phillis on the other hand is a guy who could demand a nice free agent contract when he enters FA. You pick up his option, try and sign him to an extension, all the while knowing that if he doesn't sign he will be a Type A FA. I don't see anything wrong with picking up his option for next season and then going from there.

Agreed. No different than what I said. However, I don't think I'd pay him more than $11MM per, especially for more than 3 seasons.

I(heart)Freel
06-27-2011, 05:23 PM
I could easily see a team giving him a 2-3 year deal at 8 or 9 per, as I said. I think there are multiple teams that would do that.

The question is, are there teams that would do that AND sacrifice their first round pick? Color me skeptical, in this draft-happy climate.

RED VAN HOT
06-27-2011, 05:26 PM
I am unclear on the rules. Both Phillips and Cordero have club options for 2012. Can a club refuse to exercise the option, then offer arbitration?

I thought that Hernandez was the only real possibility for compensation. I suspect he would accept arbitration and get paid handsomely if his numbers continue to hold up. Where would that leave Mez?

cinreds21
06-27-2011, 05:45 PM
Yes they can decline the club option and still offer arbitration.

Brutus
06-27-2011, 05:48 PM
I am unclear on the rules. Both Phillips and Cordero have club options for 2012. Can a club refuse to exercise the option, then offer arbitration?

I thought that Hernandez was the only real possibility for compensation. I suspect he would accept arbitration and get paid handsomely if his numbers continue to hold up. Where would that leave Mez?

This subject came up last year on Ramon Hernandez, and it was determined that clubs can still offer arbitration on players who's club options were not picked up. Not only that, but they can still receive draft-pick compensation if arbitration is offered and then subsequently declined by the player.

Benihana
06-27-2011, 05:56 PM
The question is, are there teams that would do that AND sacrifice their first round pick? Color me skeptical, in this draft-happy climate.

Well the Yankees just did it for Rafael Soriano, who's not even their closer...

Not to mention, if a team drafting in the Top 15 signed him, they wouldn't forfeit their first round pick.

edabbs44
06-27-2011, 06:12 PM
There is zero chance we offer arbitation to Cordero.

And somewhere near 100% chance of him accepting.

AtomicDumpling
06-27-2011, 07:17 PM
I would offer arbitration to Hernandez. I doubt he would accept it because he is likely to get a good multi-year contract on the open market what with all the good teams in dire need of good catchers. Even if he accepts arbitration the Reds should be able to get good trade value out of him or Hanigan if they want to create an opening for Mesoraco (which I assume they will).

I would not offer arbitration to Cordero because the risk is too great that he may accept it. I would like to have Cordero back next year but at a much lower salary. My guess is he will not be offered arbitration and he will sign a 3 year contract for about $25 million as a free agent, possibly with his former team the Rangers. I think they will put Neftali Feliz in their rotation next year.

It can be risky to offer arbitration to players you don't really want. It creates uncertainty and can put your budget plans at risk. If your goal is just to get the draft pick and therefore a keystone prospect, another option to consider instead is to use the money it would take to sign the draft pick and spend it on a top international free agent prospect or two. Those guys are a little riskier and take longer to develop because they are only 16 years old, but many of the best players in baseball were acquired that way.

mth123
06-27-2011, 07:42 PM
With Raises already in place for Votto, Cueto, Bruce, etc., there is no way that Cordero is offered arb. Cordero coming off the books is the primary thing that the Reds have in place to offset those raises.

Picking up Phillips option is a no brainer with only a Rolen type extension possibly changing that.

Ramon is the tough choice, but Hanigan is signed and Mes is coming (maybe Grandal too). I wouldn't take the chance of him getting a $6 to $8 million arb award. He's having a good year and he could easily get that much in arb.

The inaction we are all complaining about is primarily budget driven. I see no reason to risk hanstringing that budget in an attempt to get the next Chris Valaika. The Reds need to free money to address specific needs and these players do not address them.

REDREAD
06-29-2011, 11:11 AM
It's far too dangerous to offer arbitration to Cordero.
If the Red went to arb with him and offered the min 9.6 million/year, they will lose and end up paying him much more.
Cordero has been an expensive contract, but he's been solid other than last year.
He's putting together a great year.. The arbitrators won't care if it's based on BABIP or whatever.. they just know it's a great year.

I'm not even sure we could pay Cordero without lopping off another expensive player next year. IMO, he probably gets a raise in arb from what he is making now. Possibly gaining a draft pick is not worth being put in the situation where you need to shed 13 million or so in salary because the guy accepts unexpectedly.

Even if the Reds had 13 million to pay Cordero next year, why not spend that on a more pressing need? They can use Masset, Logan, or Chapman to close next year.

Big Klu
06-30-2011, 02:36 AM
Wasn't it David Weathers to whom many of the folks here at RedsZone wanted to offer arbitration a few years ago so that the Reds could get the draft picks when he declined? Except that he didn't decline--he accepted the offer, and the same folks at RZ who wanted to offer him arb howled. Now don't misunderstand me--I liked David Weathers. He produced, as does Francisco Cordero. But you have to be careful when offering arbitration--the player just might take it.

camisadelgolf
06-30-2011, 03:02 AM
Yup. People just assumed Weathers would decline because he was a reliever coming off a decent year, and it seemed like teams were handing out multi-year deals like candy to players like Weathers at the time.

cinreds21
07-06-2011, 05:10 PM
Just an update. As of Tuesday evening, Hernandez is still a Type-A and Cordero is at the top of the relievers to be a Type-B free agent.

Benihana
07-06-2011, 05:13 PM
Just an update. As of Tuesday evening, Hernandez is still a Type-A and Cordero is at the top of the relievers to be a Type-B free agent.

Would love to make a handshake deal with these guys to turn down arbitration- if they were Type Bs.

We could use the extra sandwich picks, as the draft seems to be the only way to bring talent into the organization these days.

I(heart)Freel
07-06-2011, 05:38 PM
Would love to make a handshake deal with these guys to turn down arbitration- if they were Type Bs.

We could use the extra sandwich picks, as the draft seems to be the only way to bring talent into the organization these days.

The old handshake deal gains momentum...

http://www.mlbtraderumors.com/2011/06/when-its-better-to-be-type-b.html

fearofpopvol1
07-07-2011, 05:38 AM
There's no way I'd offer Cordero arbitration because he would need to be offered a minimum of $9.6M. He'd be crazy not to accept. I'm open to offering arbitration to Ramon to keep him around for one more year, though. I would undoubtedly pick up Phillips' option, but I worry about what to do with him after next year.

This is exactly what I would do.

Dan
07-07-2011, 08:59 AM
I am for trading Cordero regardless of whether the Reds are dropping out of the race or not. He could be replaced by Massett or Ondrusek, opening up a spot in the pen for someone like Bailey or Volquez or even Willis.

To me, closers are like running backs in the NFL. There are solid ones everywhere, so they aren't expensive; they don't hold their value that long; and when they lose it, it's like going over a cliff.

Big Klu
07-07-2011, 09:44 AM
I am for trading Cordero regardless of whether the Reds are dropping out of the race or not. He could be replaced by Massett or Ondrusek, opening up a spot in the pen for someone like Bailey or Volquez or even Willis.

To me, closers are like running backs in the NFL. There are solid ones everywhere, so they aren't expensive; they don't hold their value that long; and when they lose it, it's like going over a cliff.

To me, they are more like kickers. Some are better than others, almost all of them put up solid numbers, and you know the great ones when you see them.

Dan
07-07-2011, 10:24 AM
To me, they are more like kickers. Some are better than others, almost all of them put up solid numbers, and you know the great ones when you see them.

Thing is, kickers stay around forever. Closers for the most part have a few good years and that's it. Rivera and Hoffman and ??? are the only ones that lasted a good long time in recent memory.

Here's a list of the saves leaders since 2000 in the AL and NL. See any future hall of famers on that list? And note Greg Gagne is representative of what I'm talking about...dude had a few great seasons and just fell off the face of the earth.

Brian Wilson (SFG) 48 Rafael Soriano (TBR) 45
Heath Bell (SDP) 42 Brian Fuentes * (LAA) 48
Jose Valverde (HOU) 44 Francisco Rodriguez (LAA) 62
Jose Valverde (ARI) 47 Joe Borowski (CLE) 45
Trevor Hoffman (SDP) 46 Francisco Rodriguez (LAA) 47
Chad Cordero (WSN) 47 Francisco Rodriguez (LAA)
Bob Wickman (CLE) 45
Armando Benitez (FLA)
Jason Isringhausen (STL) 47 Mariano Rivera (NYY) 53
Eric Gagne (LAD) 55 Keith Foulke (OAK) 43
John Smoltz (ATL) 55 Eddie Guardado * (MIN) 45
Robb Nen (SFG) 45 Mariano Rivera (NYY) 50