Mets Arbitration Decisions

Midnight tonight is the deadline for teams to offer salary arbitration to their own free agents, of which the Mets have eleven:

• Oliver Perez
• Luis Ayala
• Pedro Martinez
• Moises Alou
• Damion Easley
• Tony Armas
• Orlando Hernandez
• Ricardo Rincon
• Ramon Martinez
• Matt Wise
• Trot Nixon

Only three of these guys have been ranked by Elias: Oliver Perez is a Type A free agent; Luis Ayala and Moises Alou are both Type Bs. A quick free agent compensation primer: The upside to offering arbitration to a ranked player is clear: Should he sign elsewhere, the former team -- in this case, the Mets -- would receive either a first round pick AND a sandwich pick between the first and second rounds (Type A) or just the sandwich pick (Type B). There are circumstantial exceptions to the compensation for Type A players, because a team could conceivably sign more than one such player but, obviously, only has one first round draft pick to offer back to the player's original team. In such cases, the highest ranked Type A player signed is compensated for by the signing team's first round pick; the second highest ranked Type A the second round pick, etc. Of course, any team picking in the top half of the first round has their first round pick protected, so the musical draft picks begin with the signing team's second rounder instead.

The Mets will almost certainly offer arbitration to Perez, because there is no disincentive to do otherwise. Typically, the worst case scenario for offering a player arbitration is that he accepts and you didn't want him to. That is, you wanted him to sign elsewhere so you could collect the draft pick(s), and his accepting of arbitration would have negative implications on your team's plan for the subsequent year, either financially, roster-wise, or something else entirely. This actually happened in the winter following the 2002 season, when the Braves offered arbitration to both Greg Maddux and Kevin Millwood, expecting at least one of them to decline in favor of a multi-year deal elsewhere. Both players accepted their arbitration offers, and the Braves were forced to trade Millwood to the Phillies (for Johnny Estrada) to ease the burden on their 2003 payroll. The Mets have no such concerns about Perez, because they could afford any one-year arbitration award should he fail to find a deal to his liking on the open market.

I think the Mets should probably offer arbitration to Ayala, too. If he doesn't sign with someone else, the Mets will be on the hook for something like $2 million (just a guess) for next year. Ayala was pretty terrible last year, but the Mets flushed $1 million down the toilet on Matt Wise, so even the worst case for Ayala next year would hardly cripple the Mets financially. Moises Alou is sort of interesting, but the Mets won't offer him arbitration. It's not clear what Alou could be awarded in arbitration, considering he missed almost all of 2008. The collective bargaining agreement stipulates that arbitration-eligible players who are not yet eligible for free agency can be awarded no less than 20% below what they made in the previous season (certain exceptions notwithstanding), but that rule doesn't apply to players, like Alou, who aren't covered under the reserve system [Article XX(A) of the CBA]. Would it be worth extending an arbitration offer to Alou if he'd expect, say, a $3 million arbitration reward? Who knows.

Nobody else on the above list is going to get an offer from the Mets. Prior to 2007, that passivity would have precluded the player from resigning with his former team. That's no longer the case, so the Mets could still negotiate with Pedro Martinez et al without having to guarantee any of them the right to arbitration.

Of course, 29 other teams also have to make arbitration decisions on their own free agents, which is where things will really start to get interesting. There has been very little player movement this offseason, but once the compensation-related incentives/disincentives become known we should see things open up a bit. Will signing Adam Dunn or Ben Sheets make more sense if they won't cost any draft picks than, say, Manny Ramirez or Derek Lowe plus draft picks to boot? By Tuesday morning, the risks of signing another team's players will be much clearer.