Type B free agents and the risk involved

Jenifer Langosch/MLB.com

One of the upcoming “important” offseason dates is Nov. 23, the deadline for clubs to offer salary arbitration to Type A or B free agents in order to be eligible for Draft pick compensation. The deadline is at midnight.

Confused on what this all means? Hang with me…

At the end of each season, Elias comes up with a ranking system in which it uses different statistics to assign a number value to each player. Based on those numbers, players either get a Type A, Type B or no designation. These designations are important when it comes to the process of free agency.

As a way to protect teams from getting nothing in return for top players walking away as free agents, a compensation system was created. It works like this:

  • Teams that have Type A or B free agent players have the option of offering arbitration to those players.
  • If the free agent rejects the arbitration offer, the team is then in line for compensation.
  • If that free agent is a Type A player, when he signs elsewhere the signing team forfeits a Draft pick to the team that lost the player. The team losing the player also gets a compensation pick between the first and second round of the Draft.
  • If that free agent is a Type B player, when he signs elsewhere the team that loses the player gets the compensation pick between the first and second round of the Draft. The team that signs that player does not lose a pick.
  • The risk is that by offering arbitration, a team is obligated to go through that arbitration process if a player accepts the offer. That means a club that is simply looking to collect Draft picks might instead be stuck with a player and salary the team does not need/cannot afford.
  • If this risk scares away a club from offering arbitration, that team will get no compensation when the free agent signs elsewhere.

How does this concern the Pirates, specifically, this offseason? Four of their free agent players qualified for Type B status: Ryan Ludwick, Derrek Lee, Ryan Doumit and Chris Snyder. The Pirates have until Nov. 23 to decide whether the reward (the opportunity for an extra Draft pick) is worth the risk (the player actually accepting the offer).

Lee probably represents the lowest risk, and I’d expect the Pirates to offer him arbitration. Lee seems unlikely to accept it, and if he did, the Pirates would be pleased to have him back. The club is already trying to re-sign him.

Ludwick, who made $6.775 million last year, represents the highest risk since the Pirates need to allot their available money to places other than the outfield. If Ludwick were to accept an offer, that would handcuff the Pirates’ ability to be as active as the club wants to elsewhere.

Type A/B players who are offered arbitration have until midnight on Dec. 7 to accept or reject that offer.

Follow me on Twitter: @LangoschMLB

One comment

  1. Pingback: Offseason Notes for November 4th | FanGraphs Baseball

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