Beltre and Arb. Offers

Dave · November 30, 2009 at 2:29 pm · Filed Under Mariners 

I did a post over on FanGraphs this afternoon looking at the economics of an arbitration offer. I used Beltre as the example in the post, so if you’re curious about whether or not the M’s should offer him arbitration, that’s probably not a bad spot to start reading.

I think the M’s will offer arbitration to Beltre but not to Bedard. There’s enough information available to presume that the chances of Beltre accepting the arbitration offer are pretty low, which reduces the risk of the offer, even if the M’s determine they want to go another direction at third base. Bedard, on the other, isn’t going to get guaranteed millions even with teams pursuing him – he’ll get a low base with incentives, much like Pavano did a year ago. That kind of contract offer isn’t available via arbitration, so he’d be more likely to accept.

Either way, I don’t expect either to be on the team next year, but I’d guess that the M’s will only end up collecting one draft pick, not two.

Comments

39 Responses to “Beltre and Arb. Offers”

  1. nathaniel dawson on November 30th, 2009 3:01 pm

    I don’t know that I see any downside to the M’s offering Beltre arbitration. While I suppose you can never predict what human beings will do in such a complex environment as running a Major League baseball team, I’d be prety surprised if they don’t.

  2. Auggeydog on November 30th, 2009 3:35 pm

    If they offered Bedard arb what kind of $’s would it mean and if we get the lower side would it be worth it? I know there is the injury bug, but the guy is pretty good when healthy. If they could get a majority of the year from this guy he would really help the staff.

  3. CMC_Stags on November 30th, 2009 4:00 pm

    According to Cot’s, Adrian received $12M last year in the last year of his 5 year, $64M contract. The signing bonus was $7M.

    My understanding is that a player cannot receive less than 90% of his previous year’s salary in arbitration. Depending on if a prorated amount of his signing bonus was included in that calculation, Beltre would not receive less than $10.8M to $12M.

    His on-roster replacements (2B or 3B), are owed the following by the Mariners next season:

    Bill Hall- $1.25M plus $.5M to buy out 2011
    Jose Lopez- $2.3M
    Jack Hannahan- ~$.45M
    Matt Tuiasosopo- ~$.45M

    Now, a healthy Beltre would provide 1-3 wins over those options (the most likely being a Hall/Hannahan platoon), but his cost per marginal win gained will not fit in the $3M/win or so that the M’s can afford this offseason.

    The flip side is as Dave wrote at Fangraphs. There is a good chance that Beltre declines arbitration and signs elsewhere. If he accepts arbitration, the M’s can trade him while eating some of the salary (if necessary). Just not sure what the percentages are that make the decision one way or another.

  4. nathaniel dawson on November 30th, 2009 4:14 pm

    Beltre is not guaranteed any minimum amount through arbitration other than the Major League minimum of $400,000. As a practical matter, there certainly is a minimum amount that he would accept, but arbitration doesn’t tell us what that would be.

  5. Tim B. on November 30th, 2009 4:18 pm

    When estimating the ~$2 million figure, Beltre’s diminished FA value if he declines arbitration should be factored in. Beltre’s actual loss will be greater than the estimated $2 million because the team that acquires him will also lose a draft pick, so his free market value will decline by the value of that draft pick. Perhaps that was already built in to Dave’s assessment of his free market value at somewhere between $8 and $12 million for one season.

  6. nathaniel dawson on November 30th, 2009 4:26 pm

    Now, a healthy Beltre would provide 1-3 wins over those options (the most likely being a Hall/Hannahan platoon), but his cost per marginal win gained will not fit in the $3M/win or so that the M’s can afford this offseason.

    …There is a good chance that Beltre declines arbitration and signs elsewhere. If he accepts arbitration, the M’s can trade him while eating some of the salary (if necessary).

    I’m not sure how you are assuming what the Mariners can afford this year, or if they have placed some $/win requirement on any of their moves.

    If Beltre signs with the Mariners, I don’t believe they can trade him without his consent.

  7. joser on November 30th, 2009 4:36 pm

    When estimating the ~$2 million figure, Beltre’s diminished FA value if he declines arbitration should be factored in. Beltre’s actual loss will be greater than the estimated $2 million because the team that acquires him will also lose a draft pick,

    No they won’t, because Beltre is a Type B free agent. So the Mariners get compensated with a Supplemental pick, but the acquiring team doesn’t lose anything.

    The situation you’re describing would apply if Adrian was a Type A free agent; the calculations in that scenario would be further complicated by the nature of the first round pick the M’s might get (should he decline) — since it’s going to depend on the teams you think most likely to acquire him…it could even be not much better than a supplemental pick if Beltre wasn’t the only Type A they’d acquired (hello, Red Sox).

  8. jld on November 30th, 2009 4:45 pm

    Perhaps a dumb question, but I’m a sucker for gaming the system…

    Say a Type B player is offered arbitration but declines, then finds himself in a free agency market that isn’t as good as he anticipated, and ends up resigning with his original team, does the team get a supplemental pick?

    I’d guess not, but I like knowing the ins-and-outs of the rules.

  9. CMC_Stags on November 30th, 2009 4:47 pm

    Beltre is not guaranteed any minimum amount through arbitration other than the Major League minimum of $400,000. As a practical matter, there certainly is a minimum amount that he would accept, but arbitration doesn’t tell us what that would be.

    Yes, actually he is. From the Collective Bargaining Agreement linked to the right:

    A Club may submit a salary figure for salary arbitration that is at least 80% of the Player’s previous year’s salary and earned performance bonuses (and at least 70% of his salary and earned performance bonuses two years previous), the provisions of Section A(5) above notwithstanding. This exception shall not be used by any party, or considered by any salary arbitrator, in support of, or in opposition to, any argument regarding the evaluation of Player contracts.

    So please correct my statement before when I said I believed to to be 90% to 80%.

  10. joser on November 30th, 2009 4:47 pm

    I’m not sure how you are assuming what the Mariners can afford this year, or if they have placed some $/win requirement on any of their moves.

    The team hasn’t, but Dave has.

  11. CMC_Stags on November 30th, 2009 5:13 pm

    If Beltre signs with the Mariners, I don’t believe they can trade him without his consent.

    Correct, as a 10 & 5 player, he has no-trade rights. But I never said otherwise.

  12. nathaniel dawson on November 30th, 2009 5:30 pm

    Beltre is not guaranteed any minimum amount through arbitration

    Yes, actually he is. From the Collective Bargaining Agreement linked to the right:

    That’s the section for reserve players, those with less than 6 years Major League service. Read it through again starting with “D. Maximum Salary Reduction” on page 13 on through the arbitration proceedings up to page 16.

    Then read through the section about free agents starting on page 70, especially this sentence on page 72: If the Player accepts the offer to arbitrate, he shall be a signed player for the next season and the parties will conduct a salary arbitration proceeding under Article VI; provided, however, that the rules concerning maximum salary reduction set forth in Article VI
    shall be inapplicable
    and the parties shall be required to exchange figures on the last day established for the exchange of salary arbitration
    figures under Article VI.

    Free agents are not guaranteed any minimum amount through arbitration other than the Major League minimum.

  13. nathaniel dawson on November 30th, 2009 5:33 pm

    Correct, as a 10 & 5 player, he has no-trade rights. But I never said otherwise.

    Perhaps I misunderstood this comment:

    There is a good chance that Beltre declines arbitration and signs elsewhere. If he accepts arbitration, the M’s can trade him while eating some of the salary (if necessary).

  14. terry on November 30th, 2009 6:49 pm

    I don’t know that I see any downside to the M’s offering Beltre arbitration.

    The downside is the Ms having to pay Beltre next year when their plan was to spend the money another way….

  15. nathaniel dawson on November 30th, 2009 7:56 pm

    The downside is the Ms having to pay Beltre next year when their plan was to spend the money another way….

    Their plan is to spend their money another way? I hadn’t heard about that.

    Be that as it may, I can’t see how that would be a bad thing, though. They’d have a very good player to fill their glaring need at third base.

    I’m not sure how you are assuming what the Mariners can afford this year, or if they have placed some $/win requirement on any of their moves.

    The team hasn’t, but Dave has.

    I’n not sure how a link to Dave speculating on how the Mariners might approach things this year would give you knowledge of how the Mariners might operate or what they can afford to do. You sounded pretty sure of yourself when you said:
    “his cost per marginal win gained will not fit in the $3M/win or so that the M’s can afford this offseason.” I’m still not sure how you would know something like that.

  16. terry on November 30th, 2009 8:56 pm

    Their plan is to spend their money another way? I hadn’t heard about that.

    Be that as it may, I can’t see how that would be a bad thing, though. They’d have a very good player to fill their glaring need at third base.

    I’m just throwing this out there but I bet there is a great deal from their organizational meetings you haven’t heard about.

    If they think a sedan is best suited for taxiing people where they need to go to best help their cause, then it’s a problem if they get stuck with a pickup, even if the pickup was at a fair market rate.

    It’s a devilish detail that also has to be factored into the risk part of the equation.

  17. ClaytonMiles on November 30th, 2009 9:24 pm

    Can the value of the time it takes the arbitration process to run its course, vs. the loss of time to act/compete on the private market, play into the equation too? I looked briefly but didn’t find the arbitration timeline.

  18. joser on November 30th, 2009 9:37 pm

    I’m still not sure how you would know something like that.

    And I’m still not sure how you know a returning Beltre would veto any trade to any team under any possible circumstances.

    I looked briefly but didn’t find the arbitration timeline.

    Here:
    DEC. 7, 2009
    • Last day for free agents offered salary arbitration to accept the offers.

  19. nathaniel dawson on November 30th, 2009 10:02 pm

    And I’m still not sure how you know a returning Beltre would veto any trade to any team under any possible circumstances.

    Because the only reason I can think of for Beltre to accept arbitration is that he just wants to play so badly in Seattle that he’s willing to relinquish his right to seek a long term deal with any other club. If he has such a strong over-riding desire to stay in Seattle, why would he consent to a trade?

  20. terry on November 30th, 2009 10:04 pm

    He would accept arb because he’s calculated that he can do better in arb than he could by testing the waters.

    He would accept a trade because the money is the same and it’s possible that he’d be moving to an environment that is more conducive to him reestablishing offensive value.

  21. ClaytonMiles on November 30th, 2009 10:45 pm

    thank you.

  22. nathaniel dawson on November 30th, 2009 10:56 pm

    He would accept arb because he’s calculated that he can do better in arb than he could by testing the waters.

    But he can’t do better in arbitration. He only guarantees himself a one-year deal by accepting arb, and he severly weakens his bargaining power for a multi-year deal. If he becomes a free agent, he can get a multi-year deal, and quite likely a better one than he would by accepting arb.

  23. Liam on November 30th, 2009 10:57 pm

    If Bedard wasn’t going to be ready until mid-season would that be a sufficient reason for the team to cut him with 30 days termination pay or would that still be grounds to file a grievance?

  24. DMZ on December 1st, 2009 12:54 am

    As a practical matter, there certainly is a minimum amount that he would accept, but arbitration doesn’t tell us what that would be.

    As a practical matter, though, if Beltre goes into arbitration asking $12m and the team submits $400,000, his move isn’t to withdraw, it’s to stay. Arbitration picks the number closest to what they think the actual value should be, and he has to know at that point he’s won $12m.

    If Beltre and his agent do a reasonably good job of justifying their ask, there’s no reason they withdraw after accepting arbitration.

  25. DMZ on December 1st, 2009 12:58 am

    Moreover, I believe the team doesn’t get draft compensation if the player withdraws after seeing the team figure.

    That seems really strange, though — every player could increase their free market value by freeing signing teams of compensation picks. They’d just accept arbitration with their current team and then decline after figures are exchanged. The only downside is they couldn’t sign until the team submitted, which could be Jan 15.

    I feel like I’m missing something there, though. P16 in the CBA, by the way. Article VI, F (4)

  26. terry on December 1st, 2009 4:49 am

    But he can’t do better in arbitration. He only guarantees himself a one-year deal by accepting arb, and he severly weakens his bargaining power for a multi-year deal. If he becomes a free agent, he can get a multi-year deal, and quite likely a better one than he would by accepting arb.

    Maybe. Maybe not. Your position is begging an important question that Beltre is paying someone alot of money to run the calculus on…..

  27. DMZ on December 1st, 2009 7:08 am

    …that’s not begging the question.

  28. terry on December 1st, 2009 7:37 am

    It’s arguing that arbitration is a poorer option because it assumes he can get a better deal on the market….

  29. Goody on December 1st, 2009 7:43 am

    I believe that Bret Boone made a similar calculation regarding accepting arbitration from the Mariners. It gave him leverage against the M’s following his 2001 breakout. Beltre lacks those type of numbers last season but has a better body of work.

  30. nathaniel dawson on December 1st, 2009 9:41 am

    As a practical matter, though, if Beltre goes into arbitration asking $12m and the team submits $400,000

    As a practical matter, though, the Mariners would never submit an offer like that to Beltre. What I meant, and what I assumed you meant in the previous thread, was that there is a minimum amount that Beltre would accept. Beltre’s going to have a floor below which would be unnacceptable to him and he’d rather take his chances in a hearing. In other words, they couldn’t offer him, say, $3MM and expect him to accept that. So while the CBA doesn’t specify a minimum amount (other than the Major League minimum), in any particular case, there is going to be a “working” minimum that a team can offer in negotiations. If they don’t show good faith and come near a player’s market value, he’ll just say “see you in arbitration”.

  31. DMZ on December 1st, 2009 10:53 am

    Ahhhhhhhhhhhhhhhhhhhh. I understand.

  32. wabbles on December 1st, 2009 11:13 am

    Actually, at the January 2009 SABR meeting, a guy went through the whole arb process using an unnamed player. It was creepy. He went through the whole process and the number it produced at the end was the actual amount of that player’s contract. It’s based on historical performance and comparisons to other players. Given that Beltre outplayed most if not all of his peers last season and had a rather good run the past five years, there’s no way he gets a pay cut.

  33. Liam on December 1st, 2009 11:39 am

    Do you have a link, wabbles?

  34. wabbles on December 1st, 2009 12:13 pm

    Ummm, I may have said too much already (left out the player’s name and some other details). Nope, no link. It was a presentation at the meeting by one of the attorneys that does those things.

  35. lokiforever on December 1st, 2009 1:19 pm

    Any chance news will break before midnight tonight?

  36. nathaniel dawson on December 1st, 2009 2:57 pm

    Moreover, I believe the team doesn’t get draft compensation if the player withdraws after seeing the team figure.

    I feel like I’m missing something there, though. P16 in the CBA, by the way. Article VI, F (4)

    I wonder if that’s just club control players, and if a player withdraws he’s just withdrawing from the hearing. Would he get the team’s submission as a salary, or would the team be free to assign him a salary as if he wasn’t arb-eligible? The latter wouldn’t make sense.

  37. DMZ on December 1st, 2009 3:09 pm

    I know, right? I can’t make heads or tails of that section.

  38. nathaniel dawson on December 1st, 2009 3:20 pm

    Section 6 below that: “Upon submission of the salary issue to arbitration by either Player or Club, the Player shall be regarded as a signed Player (unless the Player withdraws from arbitration as provided in paragraph (4) above).”

    So……maybe a non-reserve player can opt out of arbitration and become a free agent at that point. If that was a club-control player, they couldn’t lose their rights to him, could they? We’d be seeing a parade of players using that option.

  39. Mike Snow on December 1st, 2009 4:11 pm

    Everyone’s reporting Beltre yes, Bedard no.

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