MLB’s New CBA, Free Agents and Arbitration

The new collective bargaining agreement and immediate changes to the system will affect free agents and clubs more than the rule changes for the MLB Draft will.

You can read a simple explanation to the changes here on Baseball Nation. Here’s the clip relevant to free agency.

Starting with the 2012-2013 off-season, the entire Elias-Type A-Type B ranking system has been scrapped. Instead, teams that offer a contract with an annual average value of more than $12.4 million to a free agent from their team will receive a first-round draft pick as compensation if that free agent signs elsewhere. The $12.4 million figure is the average salary of the 125 highest-paid players in the league. That figure will rise yearly as salaries rise. A team that finishes in the bottom 15 in the majors cannot lose a first-round draft pick.

Type A and B rankings will remain in place for the current off-season, but certain players not considered “top” Type As will be reclassified as Type Bs — mostly relief pitchers. In addition, teams signing Type A relief pitchers will not forfeit draft picks, but the teams that lose the Type A relievers will receive a compensatory pick. This provision is not retroactive. As a result, the Philadelphia Phillies will forfeit a draft pick to the Boston Red Sox in compensation for signing closer Jonathan Papelbon. On the other hand, if the Red Sox sign another Type A reliever to replace Papelbon, the Red Sox will not forfeit a pick.

You can see the arbitration offers that have been made—so far—here along with the Type A or B status.

It seems convoluted, but if you go bit-by-bit and make sure you get it before moving onto the next aspect, it’s not that hard. (I don’t think.) MLB.com also explains it here.

What must be understood with some of the more surprising arbitration offers is that a team is not obligated to pay the player his award if they deem it to be too much money. Dan Wheeler of the Red Sox falls into the category of, “they offered him arbitration?”

On the surface he’s not a pitcher a front office that interprets value with money and production like the Red Sox would pay $3 million+ for, but there are benefits to the offer. Wheeler is a “Type B” free agent; he pitched serviceably enough when he was healthy and the Red Sox would know what they’re getting from him if they keep him. They can hope he rejects arbitration (he won’t); they can hope he leaves and take the supplemental draft pick; they can sign him to what they consider a fairer deal before arbitration; or they argue their case with him and, win or lose, can walk away from the award before the season and only have to pay a small fraction as termination pay.

The Brewers offered Francisco Rodriguez arbitration and it’s a tightrope for both sides, but well worth the risk. With Scott Boras as his agent, he’s unlikely to accept the offer to be a set-up man even if it’s for that lofty salary of $13.5 million +.

But if he’s pragmatic and puts ego aside, he might take the offer if he can’t get a longer term contract.

The Brewers can swing it financially and build their club on a superlative starting rotation and shut-down bullpen, mitigating the loss of Prince Fielder. It’s known that K-Rod can be a closer; if he’s willing to accept that he’s probably not going to accumulate the relatively meaningless save stat, pitches well, stays healthy as a set-up man and behaves as a good soldier, it will only benefit him going into 2013 free agency as the market won’t be flooded and in flux as it is now as teams are sifting through their situations, the new CBA and what’s currently available.

As I said in my posting about the draft, MLB players don’t care about amateurs’ bonuses and they’re definitely happy to be rid of the hovering onus of having their own options diminished by the possibility of a team losing a top draft pick for signing them. Clubs with money will be more willing to spend on what would be considered an “iffy” free agent if he’s not costing a first rounder.

It will take care of itself. The draft picks were referenced as a big reason Brian Cashman didn’t want Rafael Soriano last year, but Cashman didn’t want Soriano period. It wasn’t just the draft picks, it was the money and that he’s Rafael Soriano in reputation and performance. And Cashman was right.

There’s little risk in offering arbitration to players whom clubs don’t want back because they can always just walk away with no “handshake agreement” necessary with the player that he’ll refuse it. It’s not in the interests of a Raul Ibanez to take the offer of arbitration because he’s not going to be with the Phillies next season one way or the other and the number of teams willing to give him any noteworthy contract in the spring right before the season will be nonexistent.

The players and owners benefited from the new deal even if it’s going to hurt the amateurs; the attitude of disinterest in how a drafted player deals with not being handed a giant check for signing his name is totally acceptable on the part of the union and MLB.

In reality, why should they care?

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