John Grabow and Free Agency

by wickethewok on Oct 3, 2009 3:51 PM EDT Comment 4 comments

For certain players, such as John Grabow (who is a type A middle reliever), they will not be able to find another team willing to give up a 1st round draft pick in order to sign them. In Buster Olney's blog (subscription required), he has a quote from an AL GM who says, "If they offered [Grabow] arbitration, there's no chance another team would sign him. You're not going to give up a No. 1 pick for a middle reliever." This is a fairly recent phenomenon, as teams have just started figuring out the value of Rule 4 picks.

We saw this happen last year when players like Orlando Hudson, Juan Cruz, and Orlando Cabrera were offered arbitration which drove their prices and bargaining position way down in the free agency market. For players like Grabow, clubs won't be willing to give up a first round draft pick to sign them. This essentially forces the player to either go to arbitration (which typically won't give the player the raise they would get on the FA market) or try to negotiate a new contract with the same club from a weak bargaining position. Players can get a clause on their next contract that forbids teams from offering them arbitration (as Cabrera did), but, again, this drives down their value.

So for players in a certain strata (lower-end type A and lower-end type B) to stay in MLB, they are essentially forced to re-sign with their current team. In effect, compensation picks allow teams to perpetually renew contracts for certain players.

For those of you who say that compensation picks help lower-end teams like the Pirates, I would say that their supposed goal to compensate lower-end teams for losing players to free agency has failed. Good players going to free agency typically come from good teams, so better clubs get more compensation picks. Additionally, as the Yankees showed last year, if you have more spending power, you can get more type A free agents while giving up less. They signed CC Sabathia, AJ Burnett, and Mark Teixeira, but only had one first round pick to forfeit.

Hopefully, the MLBPA will manage to eliminate compensation picks during their next negotiations with ownership.

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I imagine this will be addressed in the next CBA by tinkering with the formula for determining Type A/B status rather than outright elimination of compensation picks. The union probably won’t make getting of comp picks a high negotiating priority since it doesn’t affect that many players and the ones it does affect are kind of low-profile guys who wouldn’t make all that much on the open market anyway.

by maguro on Oct 3, 2009 6:07 PM EDT reply actions 0 recs

It’s not perpetual, it’s just for their arbitration-eligible years…ie, the first 6 years of service time in the Major Leagues. Either this year or next year will be the last year than anyone can offer arbitration to John Grabow. So no, it’s not like the reserve clause.

www.sixtyftsixin.com

by Nate Rose on Oct 4, 2009 4:05 AM EDT reply actions 0 recs

Not true. When a team offers arbitration to a player in his fourth to sixth years of service time, he must come to terms with that team on a contract. A team can offer arbitration to a player with more than six years of service team, but then the player has a choice. He can choose to accept arbitration and sign with their original team or decline it and go on the free agent market. The compensation system applies in the latter case.

by shayborg on Oct 4, 2009 11:10 AM EDT up reply actions 1 recs