Arbitration Update

Monday proved to be mostly a day of paperwork and procedure as the deadline for teams to offer their free agents salary arbitration expired at 11:59 p.m. ET.

Players that were extended the offer included CC Sabathia, Mark Teixeira, Manny Ramirez, Francisco Rodriguez, Brian Fuentes, Ben Sheets, A.J. Burnett, Derek Lowe, Oliver Perez, Raul Ibanez, Jason Varitek and Orlando Hudson.

Included among the players that did not make the arbitration roll call were Trevor Hoffman, Bobby Abreu, Andy Pettitte, John Smoltz, Pedro Martinez, Brad Penny, Kerry Wood, Garret Anderson, Rafael Furcal, Edgar Renteria, Adam Dunn and Randy Johnson.

Teams that excluded all of their free agents from the arbitration offer were the Yankees, Rays, Cubs, Cardinals, Phillies, Braves, Orioles, Marlins, Nationals, A's and Giants.

At issue is compensation.

Teams that offer their free agents salary arbitration get Draft picks in return if the player signs elsewhere, and the number of picks is based on the player's rating. According to a statistical study by Elias Sports Bureau, free agents are rated either A or B.

A team that loses a Type-A free agent gets two compensatory Draft picks: the signing team's first-round pick if it is below the first 15 picks in the Draft, as those are protected, and a supplemental pick between the first and second rounds. If the signing team has a pick in the first 15 slots, the team that loses the free agent will get the signing team's second-round selection and the sandwich pick.

Compensation for losing Type-B free agents is a supplemental pick.

Teams that do not offer salary arbitration to free agents who sign elsewhere get nothing in return.
The upside for the team is the additional draft pick or two, but they are also on the hook for at least a one-year contract at market value, which will likely be a bump from what the player earned the previous season.

Players have a deadline of 11:59 p.m. ET on Dec. 7 to accept arbitration, but can still negotiate with their former team, even if they decline the offer. If the player accepts arbitration, the two sides can negotiate a deal, but will go before an arbitrator if no agreement is reached.