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The Yankees decline to offer Derek Jeter arbitration

Nov 23, 2010, 9:34 AM EDT


Teams have until midnight tonight in order to offer arbitration to free agents.  If they do, and the players accept, the player will stay with the team and there will be a fun arbitration. If they do and the player declines, the team will get draft picks from whatever team eventually signs the free agent. If they don’t offer arbitration, the team gets nothing in return.

There’s always a gamble involved here, with a team often wanting to get the draft pick compensation, but not wanting to get stuck with the free agent in the event he accepts arbitration. The most famous recent example of this was Rafael Soriano accepting the Braves’ offer of arbitration last winter, which freaked the Braves out, as they had already signed Billy Wagner to be their closer and had no desire to pay Soriano what he would have received in arbitration. That led to a panic trade of Soriano to the Rays for a bucket of warm spit.  OK, that’s not fair. You could at least use a bucket of warm spit to melt ice off your driveway. The Braves got nothing useful in return.

So that’s the setup, and the decisions on arbitration offers will be coming in all day. So far we have two: the Tigers and the Yankees.  The Tigers have declined to offer arbitration to any of their free agents (Magglio Ordonez, Johnny Damon, and Gerald Laird).  Makes sense because all of them are certain to see their salaries go way down on the market, so they may be inclined to accept arbitration. The Tigers don’t want to chance it, so no offers for them.

Likewise, the Yankees have declined to offer Derek Jeter arbitration. This also makes some sense, not just for the “he may accept and we’ll have to pay him $18 million again” angle — that may not be the worst thing in the world for New York — but also because an offer might antagonize Jeter a bit. Why? Because a free agent with an arbitration offer is less valuable on the open market because any would-be signing teams know they’ll have to give up a pick for him.  Jeter likely isn’t going anywhere else, but it still makes political sense to avoid that kind of thing.

It’s in the Yankees’ best interest, I believe, to make Jeter feel like as big and valuable a man as they can until the precise moment when he agrees to a contract that is more favorable to the team.  Put differently, it’s better for him to extract psychic value from thinking that he could go elsewhere for the biggest bucks than to have to deal with the arbitration offer during conversations with his agent. And ultimately, the Yankees would not like to have to go through all of this garbage again next year like they would if they went to arbitration with the guy.

Anyway, we’ll keep you updated throughout the day on any significant or unexpected arbitration-offer news.

  1. Jonny 5 - Nov 23, 2010 at 9:53 AM

    Werth gets an arbitration offer for sure. Which he’ll turn down undoubtedly. Safe bet for the Phills. I’m curious though. Maybe a serious baseball brain can help me wrap my mind around it. Why does it seem that player arbitration usually overpays declining players, awarding them more than they’d recieve on the open market? Don’t those involved in this process have a clue as to what the open market value of a player should be based on performance? Or is this not even part of the deal and more like a “cost of living” (bwahahaha) increase that’s based on other things not performance related?

    • churchoftheperpetuallyoutraged - Nov 23, 2010 at 10:02 AM

      From what I’ve read, the arbitration process still loves the old baseball card stats, which is why guys like Howard got record arbitration awards.

      Also, apparently it’s terrible for the players involved, as they get to hear the team diminish their ability all the while their agent plays up their ability. definitely not something i’d want to be present for.

      • elric718 - Nov 23, 2010 at 12:43 PM

        I don’t think it is really that terrible for the players, maybe nerve wracking.

        Basically the player says he is just like this higher paid group of players and the team says no he is really just like this lower paid group of players.

        They will bring up errors and strikeouts, but is the team saying “Our player is just like this other player that makes only 4M per year.” really that bad?

    • uyf1950 - Nov 23, 2010 at 10:12 AM

      I may be wrong on this, but I believe the CBA with the union says that the least a club can offer a player in arbitration is 20% less then the salary they made the prior year. But I believe that the awards by arbitrators is very seldom that cut and dry. They usually base it other other factors like pier salaries and history of the player involved. The player almost always gets a raise it’s just a matter of how much.

      • Detroit Michael - Nov 23, 2010 at 10:23 AM

        I also recall that no player’s salary may be cut by more than 20% in arbitration.

        I’ll disagree with your sense that players almost always get a raise though. That is often true early in a player’s career when another year of service moves them closer to being a free agent, but I don’t think that would be the case for older players necessarily.

      • Jonny 5 - Nov 23, 2010 at 10:38 AM

        It seems to me it’s always a raise. I can’t recall, (not saying it never happens) hearing of a pay cut. And if a 20 % cut is allowed and it is based on performance and peers, wouldn’t Jeter be up for a 20% pay cut if he was offered arbitration? I mean to anyone looking at these factors anyway…. Unless they use A-rod as a measuring stick…

        One fact I did find which surprised me
        “If you’re thinking that the panel might side with the player more often, think again. Heading into 2010 the arbitrators have ruled in favor of the player 207 times and in favor of the team 280 times. 90% of the players filing for arbitration reach a deal with the team before ever getting to a hearing, which seems surprising considering that the team has been favored 280 times to 209 times for players, in the 35 years of arbitration in baseball.”

      • uyf1950 - Nov 23, 2010 at 10:44 AM

        To Jonny 5 – I’ll bet if there were a way to check even further into your numbers of those 280 cases where the Teams won probably 95% of those were still raises over the payers previous years salary. Just not as high as the salary the payer submitted in arbitration. I believe teams very, very seldom submit a salary reduction especially a substantial reduction is because they know they will lose if they do that. The way the process works is that the arbitrator has to take either the teams number or the players.

      • Jonny 5 - Nov 23, 2010 at 11:30 AM

        Yup, I think you’re right. I have never heard of a pay cut through arbitration. Maybe it has to do with teams just not wanting to retain declining players period most of the time. Which is why I bring this up in reference to Jeter. And you mention something even more ridiculous. “the arbitrator has to take either the teams number or the players.” How can they accurately base a result on either offer? A team will come in just under value. A player will come in just over value. I wonder why the pick on salary must be one or the other? It doesn’t make sense to me. I’d say middle ground is always best. It could be a form of punishment to either party involved decreasing the amount of arbitration hearings overall, encouraging a settlment pre arbitration. Because a team may pay more than the player is worth or a player will play for less than he’s worth. I guess it’s more than likely a deterrent against arbitration.

      • uyf1950 - Nov 23, 2010 at 11:42 AM

        Jonny 5 – I believe it’s to encourage compromise. A good example of that this year is going to be the Red Sox Papelbon. Based on his 2010 performance there is no way he should get the $11.5M he is reported to be asking. Probably the Sox will submit a number closer to $10M. Both substantial increases over his $9.3M 2009 salary. Before the arbitrator can render a decision they will probably settle on $10.5 to $11M as a compromise.

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