Offseason 2012: Offering K-Rod arbitration the right move

The Brewers have four arbitration decisions to make by Wednesday night, but only one is truly a “decision” in the sense that we traditionally use the word. In order to receive draft pick compensation for losing highly or moderately rated free agents, teams are required to offer one-year contracts to the player at a value to be set by an arbitration panel.  These offers can sometimes be risky for teams; if the player accepts, he generally receive a raise from the previous year’s salary.  On the flip side, accepting arbitration can be risky for the player, because it deprives him of the chance to look for a multi-year deal.  This year, the Brewers must decide whether to make offers to four former Brewers:  Takashi Saito, Francisco Rodriguez, Prince Fielder, and Yuniesky Bentancourt.

Fielder will obviously receive an offer.  He would receive a substantial raise from the $15.5MM he earned last season, but is looking for a new deal somewhere in the range of $180-$200MM, and definitely would not accept a one-year contract.  Because Fielder is a Type A player, or one of the most highly rated, the Brewers will receive the signing team’s first- or second-round pick, depending on where it finished in the standings the previous year, as well as a supplemental pick between the first and second round of the draft.

Saito and Bentancourt are obvious nonoffer candidates.  Saito’s contract precludes the Brewers from offering arbitration, meaning the Brewers will receive nothing for his departure.  The Brewers exercised Betancourt’s $2MM buyout earlier this offseason, so risking a one-year contract valued at more than $6MM on Betancourt is not something the Brewers want to do.  And as a Type B, or moderately rated, player, the Brewers would receive only a supplemental pick for losing Betancourt; definitely not worth the risk.

But somewhere in the middle lies Francisco Rodriguez.  Offering Rodriguez was very risky under the previous collective bargaining agreement, because the prospect of forfeiting a draft pick served as a major disincentive to his signing in a market flooded with closers.  Still, I felt it was in the Brewers’ best interests to make an offer then.  I’ve become even more convinced that the Brewers should offer arbitration in light of the new collective bargaining agreement signed this week, which eliminates the draft pick forfeiture for a small class of elite relievers that include Rodriguez.  This makes Rodriguez far more palatable to many teams and increases his marketability.

The risk, of course, is that Rodriguez will accept arbitration.  His services would cost the Brewers somewhere north of the $12MM he earned last season, which is a substantial amount for any player, let alone a set up man. But even that is not as much of a downside as you might think.  With Rodriguez, Saito, and LaTroy Hawkins departing, the Brewers are in serious need of bullpen help.  A quality set up reliever at market value will still cost somewhere between $3-4MM per year on a multi-year deal, so assuming the Brewers go the free agent route, Rodriguez represents only a $9-10MM premium for one year.  The Brewers are not likely to be in the market for one of the major free agents this offseason, and will probably settle for inexpensive, solid players or internal options to fill the voids in the bullpen and at 1B, 3B, SS.  In other words, Rodriguez’s salary would not cripple the team for a long period, and the Brewers – who are still in a position to contend next year – could do worse than Rodriguez again setting up John Axford.

There is, of course, a reward if Rodriguez does not accept: a sandwich pick between the first and second rounds of next year’s draft.  And for a depleted farm system (at least, relative to other teams), the Brewers certainly could use the help.  Given that Rodriguez is stuck behind John Axford and desperately wants to close on a multi-year deal, I’d say the balance certainly tips in favor of K-Rod rejecting the Brewers’ offer.

So I don’t see how the Brewers lose by offering Rodriguez arbitration.  Best case scenario, he declines and the Brewers receive an extra draft pick.  Worst case scenario, he accepts and a contending team is stuck with – god forbid – an elite reliever in a depleted bullpen.  He may be an expensive reliever, but, hey, not too long ago the Brewers were handing out $10MM like candy (see: Eric Gagne, Jeff Suppan).  The Brewers could do much worse than another year of K-Rod, even a hefty price tag.

 

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