This should be the first priority for WK in the off-season. This is the single biggest factor which will affect the direction of this franchise which needs to be addressed this winter. These options are, obviously, based upon my understanding of the arbitration rules. Firstly, let's consider the options available if AD has decided he does not want to extend his contract with the Reds.
Option 1 - Don't pick up the 2008 option year and don't offer Adam Dunn arbitration. This will not happen. It is an option. Just not a realistic one. The Reds are not letting AD go without getting either players or draft picks in return. Let's move on.
Option 2 - Don't pick up the 2008 option year, but do offer Adam Dunn arbitration.
2A)Dunn accepts arbitration. Unlikely, but certainly not impossible. However, if AD has decided he doesn't want to be in Cincinnati after 2008, he would probably just as soon move on after 2007. He has had an offensive renaissance, and his value is pretty high right now. Why risk an offensive decline in 2008? That would make him a year older and probably less valuable in the minds of other teams.
2B)Dunn declines arbitration. His value is up after 2007, and AD would likely strike while the iron was hot. Cincinnati would be left with draft choices as compensation. Not the best option, but this seems better than having AD walk after the 2008 season. Your comp draft choices would be one year further along in their development.
Options 3 and 4)These two are essentially the same. Exercise the 2008 option and then shop AD over the winter. Or work out an extension and with Dunn's blessing move him to another team. If WK finds a deal he likes he can attempt to buy out Adam's no-trade clause. If a full year's worth of AD can fetch more than a half year's worth, ti would stand to reason that several years of AD should bring back substantially more.
If Adam Dunn is amenable to signing an extension there only remains one hurdle. That would be to find a length of contract and a number of years that both sides could live with. I believe Carlos Lee and Alfonso Soriano are comparable contract situations. (In truth I believe that Adam Dunn is both a better player and younger than those two and should probably receive a little more). If that is the case then I don't believe contract offers of 3 or 4 or 5 years at 15M is going to get the job done - unless Adam Dunn gives the Reds a generous hometown discount. Both Lee and Soriano have inked deals for more years and more dollars per year. Starting in 2010, Lee and Soriano are both going to receive annual salaries of at least 18M. I feel this is more in line with what Adam will receive. Even if AD is willing to extend there is no guarantee that will happen. If it does great. If it doesn't then jump over to the list of options given under the assumption that AD does not want to extend.
No matter how this situation plays out, whether he stays long-term or whether he is moved over the winter, how this situation is resolved will have a tremendous effect on the Reds' future for years to come.
