2012 Reds

Arbitration: The 2012 Reds

Free agent signings and trades are the sexy pieces of off-season strategy, but arbitration decisions have an important impact on the final roster.  As the Reds begin to shape their 2012 roster, it’s important to know how the arbitration process works and to look at the arbitration decisions now confronting the organization.

Who is Eligible for Arbitration?

Two categories of players are eligible for the arbitration process – players under team control and impending free agents.

For the first six years of a player’s major league career they are under “team control” of the organization that drafts them.  After six seasons they become free agents and can work for any organization they choose.  For the last three years of the team control, arbitration can play an important role in determining the player’s salary.

For the first three years, the typical major league player earns the league minimum salary (2011: $414,000) after which they become “arbitration-eligible” for the remainder of the team control period.  In their fourth, fifth and sixth seasons, if the player cannot reach agreement with the organization on their salary, they are entitled to enter a process of arbitration.

A small number of players qualify for arbitration after two years of major league service, those players are referred to as “Super Twos.”  Super Twos are still under team control for six years, but are entitled to four years of arbitration-eligibility.  They are the players who are called up from the minor leagues the earliest in a given season.  Budget conscious teams try to avoid creating Super Twos because their arbitration awards are much higher than league minimums.

Players who are departing free agents may also be offered arbitration by the organization, regardless of their number of years playing in the majors.  If the impending free agent accepts the offer of arbitration, the player returns to the team roster.  For the 2012 Reds, the players who fall into that category are Ramon Hernandez, Dontrelle Willis and Edgar Renteria.

The deadline for the club to offer arbitration to team-controlled players is December 12 and December 1 for free agents.

The Arbitration Process

In January, both the team and the player submit a salary figure to a three-person panel of professional arbitrators.  The arbitrators generally are lawyers and judges who have experience in this field.  They are selected mutually by MLB and the MLBPA.  An arbitrator who consistently rules for one side or the other will find themselves blocked in subsequent years.

Hearings are held during February, where each side has one hour to make their case and 30 minutes to rebut the other side.  The hearings are held in neutral cities, usually in hotel conference rooms.  Generally both sides are represented by labor lawyers who specialize in this field.  The player must attend the hearing.  The decision is reached within 24 hours after the hearing concludes.

The panel considers factors such as the player’s performance and awards, injury history, past compensation, the club’s record and attendance, and comparable players’ salaries.  But there are no rules for how they must decide and they do not publish opinions or explanations.

The Outcome: One winner, one loser

The arbitration panel has to choose the offer of one side or the other.  The panel cannot split the difference or come up with their own figure.  Therefore, an utterly ridiculous offer by one side doesn’t push the final outcome in their direction, instead it makes the panel more likely to choose the other side’s offer.  So each side will seek to make an offer more reasonable than the other side.

The high risk nature of this process for both sides creates a strong incentive to reach a negotiated solution before the panel issues a final ruling.  Often, the club tries to reach an agreement before the hearing to avoid the bad feelings that may be caused by the organization’s criticism of the player in the hearing.

The salary determined by the panel comes in the form of a one-year, non-guaranteed contract.  If the player is cut in spring training, they receive 30 or 45 days termination pay, depending on how close the cut occurs to Opening Day.

The 2012 Reds

Several of the organization’s young players – Jay Bruce, Johnny Cueto, Aroldis Chapman and Joey Votto – already have guaranteed contracts that pre-empt their arbitration eligibility for 2012 and beyond.  Others, such as Drew Stubbs, Chris Heisey and Mike Leake, haven’t reached their arbitration years yet and will be working for the league minimum.

But a few Reds players do fall into the arbitration-eligible category.  Jose Arredondo, Homer Bailey and Paul Janish have all reached their first arbitration year.  Edinson Volquez, Jared Burton and Bill Bray are entering their second year.  And Nick Masset enters his third arbitration year.

The Reds have a decision to make on each of these players.  They can offer (“tender”) the arbitration process, or decline it, at which point the players essentially become free agents. The organization also has the option of reaching an agreement prior to arbitration, and that’s common.

An article at MLBTR estimates the arbitration awards for each player:

Arredondo ($1 million), Bailey ($1.8 million), Janish ($800,000), Volquez ($2.3 million), Burton ($900,000), Bray (no estimate) and Masset ($2.4 million).

At those amounts, Arredondo, Bailey, Bray and Masset would be relatively obvious tenders.  The price is right on Paul Janish, but the Reds have to decide if he’s in their plans.  The Reds could decide to cut ties with Burton, who is 30 and been unable to stay healthy.

Even if the Reds don’t have concrete plans for Volquez, they may still tender him to include in a trade offer.  He may not end up being one of our top five starting pitchers, but he sure would be for a number of teams.

Regarding impending free agents, if certain ones are offered arbitration by the club and the player turns it down to enter free agency, the club may be entitled to compensatory draft picks.  There has been some discussion of tendering Ramon Hernandez, on the assumption he will decline.  If the organization feels Devin Mesoraco is ready, tendering Ramon is a risk. Ramon might accept the tender, saddling the Reds with his 2012 arbitration-determined contract.


41 thoughts on “Arbitration: The 2012 Reds

  1. Thank you Steve, for the most informative and easy to understand article I have seen on this very confusing subject. I, for one, had no idea that the arbitrators’ ruling was a non-guaranteed contract. So even the risk of Ramon accepting would only cost the termination pay if they cut him loose in spring training. I can’t recall a team ever actually doing that with a player though.

    As for the other guys, it does look pretty cut and dry to me. Renteria should obviously be let go, but it is possibly they make an offer to Willis. More likely if he comes back it would be on a minor league deal though. For less than $1M, they may keep Burton for bullpen depth. He did have a pretty good season before he got hurt. If it was me, I keep Volquez, and decide very quickly if his control problems have been corrected. If not, shift him to the bullpen. If the Reds consider him only an option for the rotation, its time to move on. But I see him as one of those guys who could become very good after he leaves.

  2. I offer Ramon a contract anyway and if he takes it, deal Hannigan next year while his value is high and let Ramon mentor Mesoraco and Grandal. If he doesn’t take it, enjoy our free draft picks.

    Renteria: Pass with a passion.

    Willis: Exactly what jrob45601 said.

    Drop Burton and see if you can get Volquez to bitch in relief. If not, do away with him. He’s not going to develop anymore here, methinks.

  3. Nice article, but I feel the comment on Volquez has to be clarified. There is no way that Edinson Volquez, at least the one from 2011, is good enough to pitch in any of the 30 rotations in MLB. An ERA+ of 68 is probably below replacement level.

    What I suspect you meant is that there are several teams who would trade for Volquez believing that he will at least improve enough to fit into the back end of their rotation, and that there is the off chance he’ll regain a lot of his 2008 form.

  4. Masset is not worth MLB minimum, let alone $2M.They’ve got any number of guys who will cost them minimum and do a better job than Massett has done.

  5. @OhioJim: Man, I think your only remembering the bad bits. Masset has been an above average pitcher over each of the last four seasons. As much as I believe bullpens are totally fungible, guys like that don’t fall off trees.

  6. Even at under $1M, I don’t think Janish is worth it. His hitting this past season was so miserable, and if Cozart will be the regular starter as SS, I think the backup should be someone who can swing the bat off the bench. From the same list, I also would like to see the Reds part ways with Arredondo, Burton, Masset, and possibly Volquez (no way I pay over $2M for someone who was sent to Louisville TWICE last year).

  7. @Jason Linden: Jim hates Masset. Which is fine, but I have to think every team would pay the major league minimum to have Nick Masset on their team. 2.5M, that’s a different story. Some teams might, some might not. I think many would.

  8. @Dave Lowenthal:
    I don’t hate Masset. He may be a great guy; but, I’ve seen all I ever want to see of him in a Reds uniform.
    Somebody else (Pinson if I recall correcttly) did some foot work on my behalf a couple of weeks back and posted some stats which underscored my contention that Masset simply does not get significant outs with any consistency. Presented splits on Massett pitching with a lead or tied, with him pitching at least 2 runs down, and with him pitching 4 or more down. He is brutally poor pitching with a lead or when the score is tied. On the other hand, he seems to be lights out when the team is behind and gets even better as the team is further behind. Just sort of the opposite of what a team would want from a $2M setup man/ potential closer

  9. @OhioJim: If a person looks around at other teams in a similar market position as the Reds that have been able to hold onto their “Votto” or top player at least for a term into potential FA years, they often do it by saving a million$$$ here, a couple of million$$$ somewhere else etc by getting rid the marginal guys who are going to make a million$$$ or two and replacing their function with somebody they get for minimum or half or 3/4 million or so. In other words what can look like penny pinching often provides the difference to make the top of bill deal.

  10. @OhioJim: I recall those Masset stats, very disconcerting. He was worse as the ‘pressure’ of the situation rose. The trend was inopposite for a relief pitcher, especially a set-up/alternate closer role.

  11. @jrob45601: I, also, did not realize that an arbitration contract was not guaranteed. In that case I would offer arb to all three free agents. If Renteria declines, we get a comp pick and if he accepts, we cut him the first day of ST. Willis, I would guess, would not get too much in arb and may be worth bringing into ST with at least a chance at the bullpen in long relief and a long shot at the rotation. If he doesn’t make either, cut him. RH is a little trickier, which is why he should have been traded this year. If he accepts, you sign and try to trade him. In all three cases, you are happy if the decline arb and take your comp picks and like it.

  12. @OhioJim: I haven’t looked those stats up, but that was one year out of four. It certainly wasn’t that way in 2010.

  13. @OhioJim: That’s fundamentally different than what you previously said. You said you would not keep Masset for the major league minimum, which, frankly, is in my opinion ridiculous. Now you are saying you would not keep Masset for 2.5M because you want to spend the minimum on the bullpen so that they can keep Votto. That’s a wholly different argument and a much more complicated one.

  14. @rightsaidred: Do you really believe that there’s something inherent to Nick Masset’s character that he gets worse as the pressure increases, and, that it just cropped up in 2011?

    • @rightsaidred: Do you really believe that there’s something inherent to Nick Masset’s character that he gets worse as the pressure increases, and, that it just cropped up in 2011?

      Who can answer that? Certainly not I nor your.

      Here is the referred to cite – it was not Pinson.


      9/19/2011 at 10:02 pm

      This tells the story about the 2011 Masset.
      Coming into tonite this is his opp Avg/OB%/Slug%
      Tie game .373/.492/.510
      Within 1 run .313/.414/.420
      Within 2 runs .299/.392/.407
      Margin > 4 runs .259/.306/.328

  15. @Dave Lowenthal: I’m pretty much with Dave. Relievers temd to have volatile splits from year to year because of their tiny sample sizes. Sample sizes that get even smaller when you break them down into “when team is behind by one run” or “when left handed batter is up with two outs and a man on second.” I’m not advocating Massett as a 10 million a year closer, but he was better than Cordero last year by every measure that isn’t ERA and BB/9. If Jocketty is willing to go over 2.5 million on CoCo, which he almost certainly is, they would be saving a lot more money by letting him leave and giving it to Masset instead.

  16. I’m ready to dump Masset. If you look at his BA against, OBP against, and inherited runners scored, they’re pretty brutal and have been on the rise. I think he’s easily replaced with someone making significantly less money. While I’d be fine seeing Coco go also and giving the job to LeCure, Bray, or another internal candidate, the suggestion that Masset’s numbers (at least in areas that matter) were as good as Cordero’s seems way off the mark.

  17. @enlight: All of that (BA and OBP against, as well as inherited runners scored) is because batters hit over 100 points higher vs Masset than vs Cordero, when they made contact. If you believe that will happen again in 2012, then the Reds should cut Masset and sign Cordero to an extension. I think it’s incredibly unlikely, however.

  18. not “your”, “you”

    I will take a shot at your unfair question though.

    I don’t have this progression for 2010. I do know that Masset has a history of prolonged pitching ‘slumps’, if you will. His temperment certainly seems the most volatile from all the dugout outbursts I witnessed this season. I saw more of them from him than anyone else on the team and his were more ‘Zambrano-esque’ than anyone else’s dugout tantrums. Some call it intensity. Coupling these outbursts with his 2011 statistics above, I call it instability.

    • Some call it intensity. Coupling these outbursts with his 2011 statistics above, I call it instability.

      Right, but if was a winner, it’d be intensity. That’s why you shouldn’t couple statistics with affect. People were on this board dying for someone to be “give a damn” by late summer. But apparently you only give a damn if you win.

  19. For the record I am against arbitration offers to Masset, Burton, and Janish.

    Bray is too important to the pen and Arrendondo is the only other reliever worth a 2nd (3rd?) chance.

  20. @rightsaidred: I did look at his ‘leverage’ numbers and runners on numbers on fangraphs. His numbers are not as good but that is to be expected.

    Howver, in 2010 as well, he was more prone to lose control and issue walks when it mattered most than when it didn’t matter. Secondly, his K rate has nearly always declined as the ‘pressure’ increases. His % of K’s has never been stellar wRISP.

  21. @Dave Lowenthal: Sorry for the confusion. I would not keep him period. I did not mean to infer I would keep him for $2M. Meant to indicate that even at $2M he doesn’t fit in the role that you pay that kind of money for.

  22. I would tender Bailey, Bray and Arredondo if I did not have them signed by the tender date.

    I think I would tell Burton that if he was not signed by the tender date he would not be tendered and make him an offer in the same neighborhood as what he got last year ($750K?), take it of leave it. I would do the same with Janish but revisit the possibility of signing him untendered even after the tender date.

    They’ve come too far with Hernandez not to tender him at this point. If he doesn’t accept, they get the type A compensation pick(s). I’m in the camp that believes that if he accepts arbitration, he is the back up catcher next year and Hanigan is traded. Or at the least, they trade whichever of the two they can get the most for in return. If you listen to Jocketty talk he really “likes” Hernandez and seems to just be OK with Hanigan. We can debate that choice or disagree but I think that is where the org is on the two catchers.

    I am on the fence with Willis. No way I risk Renteria accepting.

  23. @OhioJim: OK, so I’m back to saying, then, that your position is ridiculous. You would not even keep Masset as the last reliever out of the bullpen at minimum salary. You have to have someone in that spot, you know.

  24. @OhioJim: You like Willis over Masset. Unbelievable. And, they’re not getting type A compensation for Hernandez. If you believe someone will sign him and give up their top pick for doing so, I’ve got the proverbial swampland in Florida for you.

    • @OhioJim: You like Willis over Masset. Unbelievable. And, they’re not getting type A compensation for Hernandez. If you believe someone will sign him and give up their top pick for doing so, I’ve got the proverbial swampland in Florida for you.

      Given the limited number of good cathcers on the FA market this offseason I could see a club doing it, there are teams that are more set on win now over win through the draft and giving up a first round pick who won’t impact your team for maybe 2-3-4 or 5 years for a catcher who can have a major impact over the next couple of seasons is not out of the question.

  25. @rightsaidred: What was unfair about my question asking an opinion? None of us are inside the guy’s head, even though 2/3 of this group think they are inside Homer Bailey’s and are sure they know he cracks under pressure (except on days he doesn’t, of course).

  26. @Dave Lowenthal: Nope. I’ve seen enough of Masset over three years. He is what he has been both good and bad. To me the bad outweighs the good. It is addition by subtraction for the Reds to be rid of him because at a point where he should have already emerged as a leader in their pen he is still a total ???, thus part of the problem instead of the solution.

    The Reds are better off even if it comes to carrying somebody who would be at AAA otherwise in that roster spot (but hopefully not in the same role Masset had been inadequate at). Still in the end if it is Boxberger in that roster spot (at the minimum) and in the role, that is better than another year of Masset at any price.

    Maybe Masset goes somewhere else and suddenly finds the way to consistently perform to his sometimes positive potential while eliminating the long spells of unacceptable performance. If so more power to him and to them for unlocking the mystery .

  27. @Dave Lowenthal: My role for Willis would be facing lefites to free Bray for wider use. Lefties are hard to come by. Other than Horst and Bray, I didn’t see any other internal options with Chapman moved to starter.

  28. @Dave Lowenthal: I only mean that it is unfair insofar as only an opinion can answer the question. I believe that Masset’s ability to cope with the inherent pressure of the game is less than many other pitchers on the roster regardless of their status as reliever or starter. I think a comparison of his stats tends to display that inability.

  29. @OhioJim: It seems to me to be a knee jerk reaction to say that you would refuse Masset at minimum salary because he hasn’t lived up to your lofty expectations.

  30. @OhioJim: I read that link, and it doesn’t seem clear to me. I understand what you are looking at and how one could interpret it that way. If you are correct, then I take back what I said, of course. But, if you are correct, then Hernandez still is likely to accept the tender (much more likely anyways) because no team is going to give up their first pick for him; he has to know that.

    • @OhioJim: I read that link, and it doesn’t seem clear to me. I understand what you are looking at and how one could interpret it that way. If you are correct, then I take back what I said, of course. But, if you are correct, then Hernandez still is likely to accept the tender (much more likely anyways) because no team is going to give up their first pick for him; he has to know that.

      The Red Sox have two catchers with an OPS+ of 92 and 95. You don’t think that the Red Sox, a win now organization, would give up the 24th pick (out of up to 1500) for a catcher with an OPS+ above 112 the past two seasons? Odd.

  31. @Dave Lowenthal: And if in fact they don’t get at least one pick regardless, I would have second thoughts about
    tendering Hernandez.

    However last night I also read the same info as DN1492 that good catchers look to be in short demand this off season. So, it might not really be that much of a risk since even if he accepts there would probably be a deal to be made.

    I just don’t think Jocketty is that lame to have held onto Ramon through every thing if there wasn’t a plan that would get them something at the end.

  32. @David: David: I see your point, but no, I really do not see the Sox going after Hernandez. The Red Sox covet their draft picks. Plus, Hernandez is old, and his projection will certainly not be an OPS+ of 112. His last five seasons has three under 90 OPS+, and then the 112 and 113 of the last 2 years. In addition, his rep is as a lousy defensive catcher. Whether all that’s deserved fully or not, we can argue, but he’s seen as a hitting catcher who’s weak on defense.

    The one reason that it’s conceivable that they might is that they have the financial resources to pay a 6th round pick 2nd round money, so they can get some high school kid who says he’s 100% certain to go to college; and that guy falls to the 6th round (and they change his mind with huge money). But I still don’t see the Sox going after Hernandez.

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