Free Agents and Salary Arbitration

Some of you have not seen a post from me on the Sports Law Blog for awhile. However, salary arbitration season is now in full swing. Earlier this week (Monday midnight ET deadline), 24 free agents were offered salary arbitration by their teams. The split between leagues was identical with 12 in each league.

One of the primary reasons that teams offer arbitration is to make sure that if their free agent moves to another team the team that loses that player receives draft picks as compensation. The Elias Sports Bureau ranks free agents in three categories - A, B, or unranked. If a team loses a Type-A free agent, the team losing a player receives two compensatory draft picks: If the signing teams first-round pick is below the top fifteen picks in the draft, the signing team loses that pick to the free agent’s former team plus a supplemental or sandwich pick between the first and second rounds. If the signing team has a choice in the first fifteen, the free agent’s former team receives the signing team’s second-round choice plus the sandwich pick. The compensation for losing a Type-B free agent is a supplemental selection. However, if a team offers arbitration, and the player accepts by the deadline this Sunday, both team and player are locked into the upcoming season with the only issue remaining the compensation for the year. Most teams prefer not to do this because the compensation almost always increases over the prior year with arbitration.

The list of players offered arbitration is as follows:

American League

Milton Bradley (Texas Rangers), A.J. Burnett (Toronto Blue Jays), Paul Byrd (Boston Red Sox), Orlando Cabrera (Chicago White Sox), Jon Garland (Los Angeles Angels of Anaheim), Mark Grudzielanek (Kansas City Royals), Raul Ibanez (Seattle Mariners), Darren Oliver (Los Angeles Angels of Anaheim), Dennys Reyes (Minnesota Twins), Francisco Rodriguez (Los Angeles Angels of Anaheim), Mark Teixeira (Los Angeles Angels of Anaheim), Jason Varitek (Boston Red Sox)

National League

Casey Blake (Los Angeles Dodgers), Juan Cruz (Arizona Diamondbacks), Brian Fuentes (Colorado Rockies), Orlando Hudson (Arizona Diamondbacks), Derek Lowe (Los Angeles Dodgers), Brandon Lyon (Arizona Diamondbacks), Oliver Perez (New York Mets), Manny Ramirez (Los Angeles Dodgers), CC Sabathia (Milwaukee Brewers), Ben Sheets (Milwaukee Brewers), Brian Shouse (Milwaukee Brewers), David Weathers (Cincinnati Reds).

There were fifteeen Type-A free agents offered arbitration and nine Type-B players offered arbitration. The lists are as follows:

Type-A - 15 (Burnett, Cabrera, Cruz, Fuentes, Hudson, Ibanez, Lowe, Oliver, Perez, Ramirez, Rodriguez, Sabathia, Sheets, Teixeira, Varitek)

Type-B - 9 (Blake, Bradley, Byrd, Garland, Grudzielanek, Lyon, Reyes, Shouse, Weathers

By my count, 56 American League free agents and 67 National League free agents were not offered arbitration.

I will offer a review next week of this first round of arbitration. Usually this is not the focal point of arbitration. That focus usually involves players that are not yet eligible to become free agents because they lack six years of qualified service. The dates of importance for those players and their teams are January 5-15, 2009 (salary arbitration filing period), January 19, 2009 (exchange of salary arbitration figures), February 1-21, 2009 (salary arbitration hearings).

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