The First Deadline of the 2009 MLB Offseason Passes

At the stroke of midnight, Eastern Standard Time, the first deadline of the 2009 MLB  offseason passed. Up until this time teams could offer arbitration to their pending free agents. Now, teams can still negotiate with their free agents but are not bound to an arbitration hearing if the sides cannot come to an agreement.

With the ratification of the last Collective Bargaining Agreement (CBA), two important changes came into play with regards to this deadline. Previously, if a team did not offer salary arbitration to their free agents, the team would not allowed to resign the player until April 30th of the next year.

This of course meant that if a team had any desire to retain the services of a player, both sides were forced into an arbitration decision, which could be detrimental to either the team or the player.

If the player accepted arbitration, it became a crap shoot as to what salary they would earn the following season. If the player declined arbitration it’s possible the subsequent contract figures would be less than what they could have earned through arbitration.

The second change with regards to the arbitration process was the awarding of draft choices to the team losing a free agent. This can be fairly complex, so let me see if I can explain it.

Each November, the Elias Sports Bureau publishes rankings of all Major League Baseball players separated into categories—starting pitchers, relief pitchers, catchers, infielders, and outfielders. The rankings are on a 100-point scale.

The top 20 percent of players in each category are classified as Type A players. Those players who are ranked from 21 percent to 40 percent are classified as Type B players. If those players are free agents, the classification is “Type A Free Agent” and “Type B Free Agent.”

In an effort to compensate the teams who lose home grown talent to other teams, the CBA awards the team losing a player with draft picks in the June Amateur Draft.

If a “Type A Free Agent” is offered salary arbitration by his former team but declines and signs with another team, his former team is compensated with the first round draft choice of the signing team.

If the signing team has one of the top 15 picks in the draft, they will not lose their first round pick, but will instead lose their second round pick. If the signing team signs more than one “Type A Free Agent” the first former team will receive the first round pick, the second former team would receive the second round pick and so forth.

If a “Type B Free Agent” is offered salary arbitration by his former team but declines and signs with a different team, his former team will be rewarded with a supplemental round pick between the first and second rounds of the draft.

There are several other nuances to this process which we won’t go into here. The whole process is outlined in Article XX(B)(4) of the 2007-2011 Major League Baseball Basic Agreement.

The key to all of this is whether a team offers arbitration to the free agent. If they choose not to, the free agent is able to sign with any team without the signing team losing any draft choices.

In a sense, this process adds an additional burden on the signing team, as they will not only have to pay free agent prices in salary but it may also affect their draft strategy for the next season.

There is also the fear that the player may actually accept arbitration, which means the former team could retain the services of the player but for a much higher price if the arbitrator rules in favor of the player.

After the 2008 season, the Arizona Diamondbacks faced just that situation. Outfielder Adam Dunn was identified as a “Type A Free Agent” but given the economic landscape, Arizona was afraid Dunn would accept arbitration, leaving them on the hook for a much larger payroll than they were prepared to have. The Diamondbacks failed to offer Dunn arbitration and he signed with the Washington Nationals without the Nationals losing any draft picks.

This year’s class of free agents was a little different for the Diamondbacks. They had only one “Type B Free Agent” in pitcher Doug Davis. The other two free agents, Scott Schoeneweis and Chad Tracy, were not in either category.

As the deadline loomed Arizona declined to offer any of the three arbitration, allowing them to sign with any team without the Diamondbacks receiving any compensation. The decision on Tracy and Schoeneweis was logical and expected, as neither player figured into the Diamondbacks 2010 equation.

The Doug Davis choice was a little surprising. Given Davis’ remarks that he is looking for a long-term contract at a substantially higher salary than the Diamondbacks were prepared to offer meant that Davis would likely decline arbitration.

Davis declining would have at least provided the Diamondbacks with a supplemental draft choice. For the second straight year Arizona’s fear of arbitration has cost the team a valuable draft choice.

During an off-season event last year, Dunn expressed his bewilderment as he assured the Diamondbacks he planned to decline arbitration. Rumors are that Davis had likewise made that assertion. Those two picks could have provided the Diamondbacks with a larger pool of talent to either use in the minor leagues or to trade for necessary pieces.

From the Diamondbacks decisions today, it is clear that we have seen the last of Doug Davis, Scott Schoeneweis, and Chad Tracy playing for Arizona. However, it doesn’t answer many questions on what the Diamondbacks plan to do to bolster their roster for the 2010 season.