The Arbitration Gambit & Felipe Lopez
TOWER GROVE — This evening at the stroke of midnight on the East Coast the prices for many of the best free agents in baseball will be set by teams deciding whether or not to offer arbitration. Some players are sure to be offered arbitration because of the bounty of draft picks their signings will bring (A.J. Burnett and CC Sabathia, for example). Others certainly won’t be, like shortstop Edgar Renteria (the Detroit Tigers made it official moments ago, per Detroit Free Press).
And then there are the quandaries.
To cash-in on the draft-pick compensation from a free agent a team must offer the player arbitration by 11:01 p.m. St. Louis time today. The St. Louis Cardinals have one Type A and two Type B free agents who, if they sign elsewhere, will score the Cardinals some draft picks. They are: RHP Russ Springer (A), RHP Jason Isringhausen (B) and RHP Braden Looper (B). While Springer would net the Cardinals two draft picks if signing elsewhere after an arbitration offer, the most intriguing of the trio is Looper.
RHP Braden Looper, a Type B free agent.
Looper is coming off a season in which he pitched 199 innings and cemented his career renaissance as a starter. He also made $5.5 million. If the Cardinals offer Looper arbitration to get the sandwich pick if he signs elsewhere, it would be a calculated risk leveraged against how much Looper could win in arbitration. Looper would have until Sunday to turn down arbitration, and he would do so thinking he could get a multi-year deal elsewhere. What happens if he accepts the offer? The Cardinals would have Looper locked in for a contract in 2009 and his salary would be decided in arbitration.
Even then, there’s a good possibility he would still have a payroll-friendly salary, esp. for a starter.
Arbitration forces both sides of free agency to take a gamble. The team, while out to secure bonus draft picks, is guaranteeing a contract and betting on the player making an agreeable salary via arbitration. The player is banking on his ability to get better term or better money elsewhere. Those are the fundamentals of the arbitration gambit.
But the Looper scenario hints at a benefit of arbitration the Cardinals could apply elsewhere.
It is highly unusual for teams to offer arbitration to players who aren’t Type A or Type B free agents — and therefore don’t carry the benefit of draft-pick compensation. But say a team has a hole in its lineup and isn’t eager to sign a multi-year deal with a player to fill it. Arbitration offers a way.
Consider Felipe Lopez — for the sake of discussion only because such a scenario described below is unlikely to ever happen. Yet, it’s worth exploring why.
INF Felipe Lopez: Worth the cost?
The Cardinals have expressed interest in having Lopez return after his successful turn as a utility player for the team late last season. There could even be a starting job at second base for Lopez. But the Cardinals have been cool toward Lopez’s perceived asking price of a multi-year deal. There are no draft picks to gain by offering him arbitration, but there is an element of strategy. Lopez made $4.9 million from Washington last year and had a rather ordinary season. His .385/.426/.538 surge in 43 games with the Cardinals sweetened his overall averages to .283/.343/.387 in 532 plate appearances. He’d be considered a regular. His ability to play multiple positions is valuable. But how much more could he really command via arbitration — $2.5 million more? $3 million more?
At what salary does having Lopez as an everyday starter become unappealing? What is the flexibility of a one-year contract worth to the Cardinals? The cost is a tangible gamble. Those are the salient questions.
By offering Lopez arbitration the Cardinals are putting a signed contract on the table. If Lopez accepts, he’s set for 2009. Done deal. The two sides would then have until the arbitration hearing to negotiate the terms of that deal. Or, they could allow arbitration to set his salary on the guaranteed one-year deal.
The same situation is there for shortstop Cesar Izturis, who made a base salary of $2.85 million last season. He too offers no draft-pick encouragement for arbitration. He too could find himself in a depressed market, and that is part of the reason why the Cardinals — or any other team — would be unlikely to use the arbitration tool with players like Lopez and Izturis. There are many reasons for this: The salary of that player would be in limbo until January, possibly handcuffing a team’s budget as it pursues other players. The maximum salary-cut rule could not apply. There have been so few cases that the standard criteria for arbitration would be applied is unclear and, because of that, the salary, at best, is difficult to estimate and, at worst, could spike.
The threat of arbitration setting a higher salary than the open market is real and likely. But so too is the competition with other teams leading to an increased length of contract.
The prevailing argument will be that offering arbitration to such players is redundant, that it only serves to add a layer to already ongoing negotiations. If the Cardinals want Lopez for one year, why not just offer a one-year deal? The difference is the guaranteed term and the salary. The team offering such players arbitration is really offering security at the risk of the price. By offering Lopez arbitration, the Cardinals have the right to force the issue. They make him decide between a certain, one-year offer — salary TBD — and the open market. Arbitration can be a hammer, albeit a costly hammer.
If they want him back … If they want him for one year …
The heavy price of admission is having arbitration set his salary.
No matter what the scenario, be it Looper or the unlikely one described here with Lopez, arbitration does what it’s supposed to — spur negotiation.
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Derrick Goold said he was going to Mizzou for capital-J journalism, but after growing up in the Time Zone Baseball Forgot he was really drawn to MU sitting between two major-league cities. Goold joined the Post-Dispatch in 2001 after working for The Times-Picayune and Rocky Mountain News, covering sports from LSU to NHL and every level of baseball in between. 
Gould- will you put a call in to the folks at 700 Clark and see if they offered arbitration to Springer? I’m sure they’ll have decided by dinner time, so you might as well call them and then post the info here. Thanks.