This appears to be the new Jocketty model with retaining players. Show that you are committed to the player by signing them now to future arb years (just like Votto), and use the nonconfrontational time it gives you to work out the LTC.
On Bailey... after his quote following his no hitter about playing in a little league park, I suspect that he will not stay with the Reds any longer than he has to. Bailey has always been a bit arrogant. I bet he believes that he will be a consistent Cy Young candidate in any pitcher's park, but in Cincy he will never be more than a #2 or #3 guy.
I hope he proves me wrong. The playoff game proved that a confident Bailey can pitch anywhere.