Arbitration Results and Brad Penny

I thought Matt Holliday would decline arbitration, but that DeRosa and/or Pineiro might accept. Holliday did indeed decline, and so did Mark and Joel. So that's that.

No one reading these words should be surprised Holliday declined. He's 26 and $cott Bora$ is his agent. He's about to become a very rich man. DeRosa's move to decline was perhaps influenced by the big deals Placido Polanco (3 yrs/$18M with Philadelphia) and Chone Figgins (4 yrs/$36M with Seattle) signed. Erik Manning posted an article over at Fangraphs today which neatly summarizes DeRosa's value. I think Mark saw the two aforementioned deals and realized he could command between 7-9 million dollars, even while coming back from wrist surgery. Can't blame him for chasing the funds.

Pineiro, well, he had expressed interest in staying a Cardinal. However, he probably thinks based on this past season he'll get something north of the $6.5M he made in 2009, and get a multi-year deal. He may be right. Again, he's chasing the money and long-term security.

There is still a chance Joel could return to the Cardinals, but that chance became a lot longer based on the widely reported imminent signing of Brad Penny. There had been discussion about bringing a veteran pitcher on a short term deal like a 1-year contract. John Smoltz dominated that discussion. Ben Sheets also seemed a viable candidate. But Brad Penny? Wow.

Why would the Cardinals give Penny $7.5M in base salary after he struggled for most of last year? Penny finished 11-9 with a 4.88 ERA in 173.1 innings for the Red Sox and Dodgers. Doesn't seem to make sense. Let's look a little deeper. His FIP was 4.46. That's not great; in fact, it's the fourth highest FIP of his career (his worst FIP season was 2008 - 5.27). His K/9 was 5.66, the second lowest of his career. BB/9 ratio? 2.14 (fifth BEST of his career, and best since 2006). K/BB (2.14) and BABIP (.307) were right on his career averages (2.17 and .303 respectively), and his HR/9 ratio was slightly elevated (0.88 career vice 1.14 in 2009).

Other than his strikeouts being down, what caused his bad year last year? Well his fly ball percentage was the worst of his career (38.4%), and in a park as small as Fenway is, that probably killed him. Guys also didn't swing at his stuff out of the strike zone as much as they did in years past, which would also explain his lower strikeout totals.

Penny becomes an intriguing guy for next year's rotation. He won't be as good as he was with the Giants (and in their pitching-friendly ballpark), and he won't be as bad as he was with the Red Sox (and their hitting-friendly park). Not sure if he's worth $7.5M, but Mozeliak is a better judge of market pricing than I am.

Welcome, Brad Penny.

Arbitration Offers

During a recent UCB interview, when asked which Cardinals would be offered arbitration, Matt Leach (mlb.com) replied he thought only Matt Holliday would get an offer. Here's the quote (question starts at 17:25 on the recording):

"I think that this front office has shown that it has a real hesitation to offer arbitration to anybody who even might accept that they might be worried about having to pay the salary. I think that they have pretty consistently shown that. Each of the past two years I have been surprised at some of the decisions, and I have yet to be surprised with them offering to somebody. If I had to guess I would guess that there's a pretty good chance that Holliday is the only guy they offer to. They've just shown themselves to be very risk adverse when it comes to the possibility of somebody accepting arbitration.

Now if the negotations start going somewhere that kinda leads you to believe things are different, that's one thing - but also remember that under the new CBA [collective bargaining agreement] that not offering arbitration is not the sort of 'death knell' in negotiations that it once was. So to some extent, not offering is no longer the risk that it was. Again, this is one area where I actually disagree with them - I think that you should be willing to take those risks. I think the draft picks are so valuable. But I think they have shown themselves to be very, very risk adverse when it comes to the possibility of players accepting arbitration."

Apparently the Cardinal Front Office has reconsidered their position and decided to accept the risk, because today they offered arbitration to Matt Holliday, Mark DeRosa, and Joel Pineiro. According to about.com's baseball page, that's all the Type A/B free agents the Cardinals had this season.

What are the implications? Baseball's arbitration rules are summarized here. Bottom line is Holliday, DeRosa, and Pineiro have until midnight EST on 7 December to accept/reject arbitration. If they accept, they go back on the Cardinals 40-man roster even though they do not have a contract in place yet, and negotiations for compensation continue. If they reject they return to the free agent pool. The Cardinals will get a compensation pick (or two in the case of Holliday, a Type A free agent) when/if they sign with someone else.

My take on the why.

Prospect Replacement. The Cardinals traded away a large chunk of their high value prospects to acquire DeRosa and Holliday. If in the worst-case all 3 reject arbitration, the Cardinals would receive 4 compensation picks. They traded away 5 in 2009 (Perez, Todd, Wallace, Mortensen, Peterson), so those 4 picks would go a long way to evening the scales in the minors. Granted, picking up raw talent to replace MLB-ready guys like Perez/Todd/Wallace isn't a fair swap or comparison, but at least there will be some return on the DeRosa/Holliday investment.

Third Base Situation. At the start of the off season there was a lot written about David Freese getting a real shot to play third next season, and although no one in the Cardinal organization anointed him the starting third baseman in 2010, it 'seemed' to be the case. Freese may not be ready. Bringing DeRosa back would allow him to develop a little further in the minors, and perhaps hold down a bench position on the major league club while learning. Call it risk mitigation going forward for the big club. Not a bad move.

Who Wouldn't Want These Guys On The Roster? Holliday is a bona-fide power hitter giving the Cardinals additional thump in the lineup. DeRosa should - will - hit much better in 2010 when fully healthy than he did the second half of 2009 with a bum wrist. And Pineiro thrived last year under Duncan, using his sinkers to force hitters into pounding the ball into the dirt (Career year concerns do exist for Pineiro, but his ground ball dominance continued a trend he's had for a couple of years, and is a repeatable skill in my opinion).

Prognosis. Holliday is due for a big payday this off-season if he stays a free agent. I would expect Holliday to reject arbitration. Pineiro already expressed interest in returning to the Club for 2010 and beyond. I think Pineiro accepts as well. DeRosa, with the bum wrist, isn't as desirable this off-season as he was last. The Cubs may make a real run at him; if they've already been in contact with DeRosa, and have a tantalizing offer on the table, he'll probably reject arbitration. Absent that I would expect DeRosa also returns.

Ankiel Settles, Ludwick Next?

Just moments before going into the hotel room at the Days Inn, the Cardinals and Ankiel agreed to a 1 year contract for $2.83M. Details of the deal weren't released, so we don't know if this is his entire base salary, or what the contract could be worth if he meets all his incentive clauses. My guess is this is the total value of the contract.

Ryan Ludwick is also scheduled to go to an arbitration hearing on 17 Feb. He's asked for $4.25M, and the Cardinals offered $2.8M.

Before the agreement was reached and reported, I made a comment here on what I thought would happen in this arbitration hearing. One of the other commenters pointed out the decision reached by the arbitrator would be one salary figure or the other. I looked it up, and guess what? That guy was right.

To summarize what's in that last link, at the arbitration hearing the arbitrator listens to arguments from both sides, which can present the following:

- The player's contribution to the club in terms of performance and leadership

- The club's record and its attendance

- Any and all of the players 'special accomplishments,' including All-Star game appearances, awards won, and post-season performance

- The salaries of comparable players in the player's service-time class and, for players with less than five years of service, the class one year ahead of him.

The parties may not refer to team finances, previous offers made during negotiations, comments from the press, or salaries in other sports or occupations.

(It would have been interesting to hear the comparable players arguments, since Ankiel was a pitcher until 2 years ago.)

I gotta ask. Since the result of the arbitration will be one of the two values submitted, why even hold a hearing? Why not certify someone as an impartial coin flipper and just flip a coin? Its the same 'go/no-go' criteria, and it doesn't waste the hour or the palatial hotel accomodations. Everyone could get in an extra round of golf. It's a win/win.

I would think an arbitrator would look at the offer sheets, listen to arguments, and arrive at a conclusion, which could be (a) the high number, (b) the low number, or (c) some number in between. I'm sure these guys go through an extensive training process to become an arbitrator, and probably sit in on a number of hearings as on-the-job training before being handed a case to try on their own.