Looming Arbitration May Force Everybody's Hands

Monday, the deadline for teams to offer salary arbitration to their respective free agents, could offer the first true glimpse of how much the economic crisis is affecting the way clubs do business.

In a better economy, most teams would not hesitate to offer a one-year deal through arbitration to attractive Type A free agents. Some teams would want such players back on one-year deals, even at arbitration-inflated salaries. Other teams, knowing that the players likely would depart for multiyear contracts, would offer arbitration to ensure that they received draft-pick compensation in return.

In most cases, little has changed. The Brewers, for example, are certain to offer arbitration to left-hander CC Sabathia, knowing they have nothing to lose and high draft picks to gain. The Yankees, on the other hand, do not figure to extend such an offer to lefty Andy Pettitte. If they wanted to give Pettitte a one-year contract with an increase from his $16 million salary, they would have done it by now.

Other decisions, however, are less clear-cut. Multiyear offers for some free agents are not as probable as they were in previous offseasons. And while teams remain eager to collect draft picks, the economy might discourage them from offering arbitration and risking a payroll hit.

Certain players, too, are in a different position than in the past. Those who are offered arbitration Monday must decide by midnight Saturday whether to commit to their previous teams for another season.

In a slow-developing, potentially weak market, some players will be tempted to do just that, preferring the certainty of a one-year deal to the uncertainty of a volatile free-agent period.

A look at three of the closer calls:

Adam Dunn

The Diamondbacks traded three players for Dunn on Aug. 11, figuring they would get two youngsters back in the draft after he left as a free agent. At the time, few doubted that the team would offer Dunn arbitration — and few doubted that he would reject it and seek greater riches elsewhere.

Dunn, the only major leaguer to hit 40 or more homers in each of the past five seasons, still appears likely to command a sizable multiyear deal, most likely from an American League club.

But the D-backs, who recently cut 31 employees from an admittedly bloated front office and parted with Randy Johnson over financial differences, might be unwilling to risk that Dunn would return at a salary of $15 million to $16 million.

Then again, if the D-backs made the offer, it's doubtful that Dunn and his agents would determine by midnight Saturday that a multiyear contract was beyond their reach. What's more, the D-backs always could trade Dunn if he accepted their offer. In that sense, he would be an asset on a one-year deal; the Nationals, among other teams, would jump.

Kerry Wood

The Cubs aren't keen on keeping Kerry Wood. (Jonathan Daniel / Getty Images)

The Cubs traded for reliever Kevin Gregg because they were unwilling to sign Wood long-term, believing he would land a lucrative contract as a free agent. But now the trade and free-agent markets are flooded with closers, and Wood is not certain to receive such a deal.

The Cubs want Carlos Marmol to close. They do not want Wood back, even for one year, at a salary of $9 million to $10 million. Their greater priorities are finding a left-handed hitting outfielder and another starting pitcher, either through a trade for Padres righty Jake Peavy or the signing of a free agent such as Johnson.

Wood said after the Cubs announced his departure that he would have returned on a one-year deal, even though his agents never raised that possibility, according to a major-league source. If he accepted arbitration, the Cubs could try to trade him to a team such as the Rangers, who might embrace Wood on a one-year commitment.

Contracts secured through arbitration are not guaranteed, so the Cubs also could release Wood in spring training and pay only a fraction of his salary. But, to avoid a grievance by the players union, they would need to demonstrate that every one of their other relievers was superior to Wood. Not likely.

Ben Sheets

At first glance, offering Sheets arbitration appears to be a no-brainer. The Brewers need starting pitching. They are secure enough financially to make Sabathia a $100 million offer. And they already figure to get extra draft picks if, as expected, Sabathia signs with another club.

Why, then, would the Brewers waver? Well, Sheets might command $13 million to $14 million in arbitration. Such a salary would be reasonable for a pitcher of Sheets' quality if the Brewers were confident of his health. But while Sheets worked 198 1/3 innings last season — his most since 2004 — he pitched only 4 1/3 regular-season innings after Sept. 11 because of an elbow problem and was not available in the Division Series.

Sheets' agent, Casey Close, says that Sheets had no structural damage in the elbow, and simply needed time to rest and heal. But the Brewers might not want to repeat the poor $10 million investment they made in reliever Eric Gagne last season. Their big offer to Sabathia, GM Doug Melvin has said, was a special case.

If the Brewers fail to offer Sheets arbitration, it will be a clear indication that club officials are concerned about his ability to stay healthy in 2009. And remember, the Brewers know Sheets better than any other team.

Peavy update No. 473

The Padres continue to discuss a trade of Peavy to the Cubs, but obstacles remain.

Moving Jake Peavy is becoming harder and harder.(Jim McIsaac / Getty Images)

First, the Cubs are in the process of being sold; offers from their four remaining bidders are due by Monday. The Cubs already have re-signed free-agent right-hander Ryan Dempster for $52 million over four years. They almost certainly would need the blessing of a new owner to take on Peavy, who is owed $63 million over the next four seasons — and might ask for even more money to waive his no-trade clause.

The teams, meanwhile, are not close to a trade agreement. Padres general manager Kevin Towers is trying to involve a third club so he could get the package of players he desires. The Cubs almost certainly will need to move right-hander Jason Marquis, who is earning $9.875 million next season, to clear both payroll and a rotation spot for Peavy.

The Padres could take Marquis, with the Cubs including enough money in the deal to reduce his salary to say, $7 million. Or, they could spin Marquis and the cash from the Cubs to another club. The Rockies, Reds and Giants have shown varying degrees of interest in Marquis, according to a major-league source.

Another possibility is that the Padres could spin one or two of the prospects that they receive from the Cubs. A team might value a player such as outfielder Felix Pie more than the Padres do; the Orioles are again talking with the Cubs about Pie, according to The Baltimore Sun, and could emerge as the third team in the deal.

Jack Wilson update No. 2

A few days ago, I reported that the Dodgers backed off their pursuit of shortstop Jack Wilson after the Pirates asked for shortstop Chin-Lung Hu, outfielder Delwyn Young and a third player.

Well, there's a reason the Pirates asked for a third player, according to a major-league source. The Dodgers wanted the Pirates to include cash that would help defray Wilson's $7.25 million salary next season and $8.4 million club option or $600,000 buyout for 2010.

The Pirates did not rule out the idea, but wanted an additional prospect for their money, a player whom they essentially would "buy" from the Dodgers. The better the prospect, the greater the amount the Pirates would pay.

The negotiations apparently broke down over this aspect of the deal. The Dodgers believe that Wilson isn't strong enough offensively to justify his $7.25 million salary; hence, their desire for that number to be reduced. The Pirates want more for Wilson and cash than Hu and Young.

This article originally published on FOXSports.com.

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