Arbitration One More Time

Another look at the arbitration results in past seasons, changes in the new Collective Bargaining Agreement that may alter behavior and Matt Morris' case from 2005.

My earlier articles on arbitration have stimulated some interesting emails as well as lively discussion on our Message Board - some focused on the debate as to whether Jeff Suppan will be offered and some not. Here, I wanted to come back to the arbitration process, the motivation for using it and some data points to consider.

Actually getting to an arbitration hearing is almost exclusively used by three-to-six year players (plus "Super Twos"), who have no other vehicle to gain leverage against their team.

You can look it up or take my word that the last time any MLB free agent went to an arbitration hearing was way back in 1991. Only a handful of free agents accept arbitration each year and the two sides invariably work out a deal ahead of time.

In total, 100 arbitration cases were filed last year. All but 44 were settled even before figures were exchanged in January. Only one of these 44 players was eligible for free agency (Travis Lee from Tampa Bay). Six cases eventually went to February hearings, with the clubs winning four.

Certainly one reason teams want to avoid all this is that they loathe having to prepare for the hearings, often hiring outside firms to assist them in preparation. Another major concern is the inherent contentiousness of any process whose goal is to talk down the value of an important employee.

Those who listened to our recent John Mozeliak interview here may have noticed the number of times he used the word "risk" in relation to arbitration during our conversation. "Mo" has stated that his team does not offer unless there is a special player they truly want back.

In previous years, teams were under more pressure to offer arbitration. Otherwise, they could maintain negotiations with the free agent only until January 8. They were then cut off from talks until May 1.

With the new Collective Bargaining Agreement, teams are now genuinely relieved they can continue to negotiate with their free agents beyond the offer deadline (now December 1) without restriction, no longer being required to deal with the risk of arbitration.

Many people do not seem to understand how big of a deal this change is. What little focus there has been on it has come from the player flexibility side.

But, the change has also been welcomed by management and is another reason the number of free agents offered arbitration this year by their former clubs may shrink from their already-low levels.

Last season, only 26 free agents of a possible 147 were offered. Among the front-line pitchers who were not offered included the Angels' Jarrod Washburn and the Rangers' Kenny Rogers, two players who could be argued were in a similar place then as Suppan is today. Yet, in all fairness, two other top pitchers, Kevin Millwood (Cleveland) and Jeff Weaver (Dodgers), were offered.

As a footnote, it is worth mentioning that the fear of arbitration has also been used in the past by players as a negotiating point with their team. Two years ago, Mark Grudzielanek signed with the Cardinals on a below-market deal, but secured at the time a pre-agreement that the Cardinals would not offer him arbitration the next winter. This allowed Grudz to seek a more lucrative contract elsewhere for 2006 and beyond, which he did.

What about Matty Mo?

I was asked by a reader about the case of Matt Morris, whose age and stats I used as a comparable to Jeff Suppan in my recent article, "Suppan, Arbitration and the Past".

Specifically, it was noted that because Morris was the one player offered by the Cardinals following the 2005 season, it potentially supports the contrary argument to mine, building the case that Suppan would, in fact, be offered arbitration this year.

While the stats were similar between the two, I believe the circumstances surrounding Morris' case were very unique, and not duplicated in Suppan's situation.

At the time of Morris' offer, the public comments from the organization were that they wanted to re-sign the veteran, but were concerned about what it would cost to do so. At face value, I tended to believe them.

Remember that Morris was 31 years old, the longest-tenured Cardinal in terms of service to the team, and he had spent his entire career in the Cardinals' uniform.

Now, the reality of the situation was that this writer thought (and I wasn't alone) that Morris would return to St. Louis in 2006 and beyond if and only if he was willing to take less money than he could secure elsewhere – that elusive, but often bandied-about "home-team discount".

While I cannot prove this, I suspect that one factor in the Cardinals deciding to offer Morris was that they wanted to appease some segment of the fan base that would have been up in arms if the Cardinals had not been appearing to do all they could to get Morris back. After all, ownership was already under considerable fire over their perceived spend-thrift ways.

The organization had also taken public lumps in previous off-seasons when vocal former players like Woody Williams and Mike Matheny felt the Cardinals had not communicated well with them when their contracts came up. Perhaps the club wanted to avoid some of this by demonstrating a good-faith effort to keep the popular organization man Morris.

As it turned out, Morris declined the Cardinals' offer and signed with San Francisco instead.

Why is Suppan different?

Obviously, Suppan does not have the history and the associated amount of goodwill with the Cardinals built up that Morris did and I don't think the organization wants to risk having to pay him $9-10 million to continue with them. I have not seen or heard the strength of public comments that indicate the Cardinals want to keep Suppan like they did with Morris.

In other words, the strategy may be to let another organization pay #2 starter money for what is essentially a #3 or #4 starter in Suppan. The Cards may instead focus on finding a middle-of-the-rotation pitcher, "the next Suppan" as another writer coined it, more cheaply elsewhere.

Nor do I think the Cardinals will want to artificially-constrain Suppan's market appeal by hanging a first-round draft pick penalty around his shoulders as he seeks new employment.

I predict if/when Suppan is not offered, there will be gracious comments made by both sides about the continuance of negotiations. But when all is said and done, Suppan will sign a three or maybe even a four-year deal elsewhere.

How will the Cards get extra draft picks, then?

First, one must assume the Cardinals want them. When Morris signed with San Francisco, the Cardinals received a supplemental first rounder (used on Chris Perez) and the Giants' second-rounder (Brad Furnish) in compensation. However, these two draftees cost the Cardinals $1.4 million dollars just to sign.

Still, I predict the Cardinals will offer arbitration to Jeff Weaver and perhaps even Mark Mulder. The Cardinals would receive a compensatory pick between the first and second rounds for each of them and any other Type B player offered who was later lost to another club.

In fact, there is a slightly greater than 50% chance (depending on where the signing team finished in the 2006 season and what other players that club signed) that a Weaver/Mulder compensatory Type B pick could be as early in the draft as the best pick received if they offered to Type A Jeff Suppan and the pitcher subsequently signed elsewhere.

In closing, what do we know?

• Teams generally don't offer arbitration unless they want to work out a deal and think they can achieve it short of a hearing.

• They also generally do not offer arbitration just to secure the draft pick compensation if the player is lost later on.

• Players don't accept unless they want to come back.

Make sure you return here later this week for an article by Bill Gilbert, who is a long-time participant in the arbitration process. Bill will provide an insider's view as to how the process works, including what roles the various participants play, as well as several examples of how arbitration was used to help players grow their salaries in the years leading up to free agency.



Brian Walton can be reached via email at brwalton@earthlink.net.

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