FanPost

Isn't It Nice To Know A Lot...

and a little bit not.

I recently decided to come clean about how little I know and understand about the "non-baseballing" side of baseball. Particularly, trades, drafts, arbitration and free agency. And since it's not nearly as messy as off-season rosterbating nor will I ever get the whole "stats" thing, I put my vast unknowledge out there in the open for all to see. (hawt)


Although I truly didn't expect anyone to answer my many questions, (it was more of a declarative statement than a cry for help) a few brave people stepped up and took on the cause, without concern for their own well being or sanity. I wish to shovel heaps of praise and gratitude at Garbanzo24, Perfecto, Nivra, Treskies, El Person and Myalexandri for sharing their Super Baseball Brains but more importantly their patience and kindness. I've made every effort to keep this concise, but it's a lot of info, you might need a snack. If you're interested in getting in the wayback machine and wandering thru the maze, here's the linky:

How could I know what was in store?

It started innocently enough, with this comment:

there's so much I don't get about all the non-baseballing side of baseball

-Arbitration (is this when their contracts are up?)

-QO (until today, I thought this meant "quality offer"...)

-Super 2 (somehow this harkens thoughts of the A's dugout, but that can't be right)

-Free Agency/that weird mid-season musical chairs after the all-star break

-The Draft (are they drafting minor leaguers or free agents?)

First, Perfecto offered up these links:

Arbitration: http://www.fangraphs.com/library/business/mlb-salary-arbitration-rules/

Qualifying offer: http://www.mlbtraderumors.com/2012/11/explaining-qualifying-offers.html

Super 2: http://www.fangraphs.com/library/business/super-two/

It seemed to me, most of this had something to do with "contracts" and/or keeping a player from wandering off to look at something shiny. But that's all I had. All responses are courtesy of Professor Garbanzo, unless otherwise noted.

1. Arbitration

Arbitration is the process by which players are compensated for their services for years 3-6, 4-7, or 4-6 of major league service time. Which subset you fall into is determined by the Super 2 process and service time, but I'll get back to that. Essentially, during the arbitration process, the player is under team control, not a free agent. However, unlike the first 2-3 years of major league service, the player has say in how much he is compensated. He and the team both submit a number they think the player is worth. Those numbers serve as the basis for negotiation. If the parties cannot come to agreement, an independent arbiter will choose one of the two numbers to pay the player, but cannot settle on a number in the middle. Most players and teams agree at the exact halfway point between their numbers or close to it. Players are generally compensated 20-30% of market value in their first year of arb, 40-60% in their second, 60-80% in their third, and 80-90% if they qualify for a fourth.

Ok! This is great! It's almost like 2 answers in one. Also, I learned that there is no "contract" in the formal sense prior to arbitration eligibility, rather it's called "Being Under Team Control". For more on Super 2, read on! (Editor's Note-Super 2 was actually my #3 question but because it's so closely tied to arbitration, I went ahead and listed Super 2 responses 2nd.)

2. Super 2

Super 2 players are players who have 2-3 full years of major league service time, and are in the top 16% of service time for that group. Brandon Belt qualifies this offseason. If you are a Super 2 player, you enter arbitration and you are part of that process 4 times until you become a free agent.

Now this is where it gets fun! In follow-up questions, I learned that "major league service time" means A day in the majors, whether you play in a game or not or even if there's a game that day, counts as a day of service time. And I learned this process happens each subsequent year (kind of like a yearly performance review).

Then Treksies offered up this marvelous nugget of wisdom, thanks to Wikipedia:Free Agency and Salary Arbitration

Nivra added:

Super-2 is based on service time. A limited number of players get super-2 status who have the most service time going into their 3rd year. e.g. those with 1.67 years + of service time then get arb, and those with less, don't go to arb until year 4. That's often why some teams try and delay their rookies until mid-season, so they don't qualify for super-2, and the team doesn't have to pay an extra year of arb.

To which I blerted out, "BUSTER POSEY!" and then had to stay in to clap erasers during recess.

Now, because anytime someone brings up the protected draft pick, all I hear is a very phlegmy, "My precious!", it was time to find out what the big deal was.

3. Qualifying Offers

This is a relatively new thing. Anyway, there's a period of 10 days of exclusive negotiation between the previous season's teams and players. In the last 5 days, teams can extend an impending free agent a qualifying offer, which is a 1 year, $14.1 million deal this offseason (equal to the average compensation of the top 125 players last season). Players can accept this offer or decline it. If they decline it and ultimately sign elsewhere, the team that lost the player gets a compensation pick after the 1st round of the next season's amateur (otherwise known as the Rule 4) draft. The team that signs the player who rejected the QO loses their best available non-compensatory pick, EXCEPT if their first round pick is in the top 10, in which case the pick is protected. This is where the "tanking" gripe begins; by the Giants finishing strong, they ended with the 13th pick in the draft, which means they would lose it if they attempted to sign a player who rejected a QO. This thins the market for the Giants and raises the prices on the players who are available (hence the overpays on Pence and Lincecum).

Why would any team want to give a player that much for one year's service, I pondered? I was then informed, "$14 million doesn't buy much anymore." and damn near fell off my chair.

4.1 Free Agency

A player is a free agent after he finishes a season with more than 5.9 seasons of MLB service time. The maximum you can keep a player under team control is just a bit less than 6.9 seasons, then (and the Giants will actually come close to that with Belt). A player who is a free agent may sign with any team 10 days after the season ends. A player may choose to extend their time with their current team at any time, although technically the contract cannot be finalized during the playoffs, although there is nothing stopping you from agreeing in principle (see Cain, Lincecum, Pence, Bumgarner, etc).

Ok! Then I'm armed with the knowledge that those 5.9 years don't have to all be served with the same team, just in total while in the majors. I'm with you so far, tell me more...

4.2 Trades

The midseason musical chairs is pretty nuanced. You can actually trade anyone at any time, but with some restrictions. Players can be traded with essentially no restrictions before July 31. In August, players can be traded ONLY if they clear trade waivers. That is, GMs put a player's name on a list, and any team can "claim" that player. If no one claims him, he "clears" waivers. If a player is claimed off trade waivers, then the team that placed him on waivers can revoke the waiver request and keep him, trade him to the team that claimed him, or just give him to the team that claimed him (how the Giants got Cody Ross, Jose Mijares). In September, players can be traded through the waiver process, but those players would not be playoff-eligible, so it's essentially moot. No trades during the postseason. Trades are now officially allowed again.

You can DFA a guy, which essentially means he's off the 40-man roster immediately, and you have 10 days to trade, release, or option him to the minor leagues if he was in the majors (with his consent, if he has no minor league options remaining). To trade him, he would still need to clear trade waivers during August or September. The DFA just functions to free up the 40-man space. If, at the end of the 10-day period, no one wants to trade for him, then the team can release the player or option him to/keep him in the minors. The Giants, in this manner, released Aaron Rowand and Miguel Tejada. The Giants DFA'd Chris Heston earlier this year, and then released and re-signed him.


So many questions! What does giving away a player entail? Another player? A player to be named later? $$$? A bag of earwigs? Do they just not want to pay the remainder of the money owed? Or does that even matter because they'll still owe most if not all of that money to the player anyway?

Garbanzo was kind enough to respond:

Yeah, they can choose to give him up for nothing, and the other team will pay the contract. Teams need to be aware of that, because a team just might dump a bad contract on another team if the other team is dumb enough to claim it (we were hoping someone would claim Zito). The teams could negotiate to split the compensation, but that would probably involve a prospect or two....If he's released and signed by another team (without being claimed on release waivers), then the other team can sign him in a normal free market deal, while the player is still being paid by his original team. The Giants paid Aaron Rowand when he had his short stint with the Marlins.

EDITED (thanks Nivra!)

Marvelous! I was then informed that when a player is DFA'd, goes unclaimed and is then picked up by a new team but has years/monies still owed when they sign, the former team is still on the hook for the monies, minus league minimum, around $500k, which is the responsibility of the new team. Whew! I think I got it right this time ;)

5. Draft

There are two drafts, actually. There's the Rule 4 amateur draft, the one with all the hubbub in June, and the Rule 5 draft, which happens in December. The Rule 4 draft is for amateur players, from college or high school. That's the one people are generally talking about when they say "the draft." Bad teams pick first and good teams pick last, in every round, all the way up to the 40th (reduced from 50 two years ago).

The Rule 5 draft is a lot less consequential. There's a major league portion and a minor league portion. In the major league portion, teams with open 40-man spots can pick a player from another organization who is not on the 40-man roster, and who has been in professional baseball for 5+ years without making the majors. That player, if selected, must remain on the MLB 25-man roster of the team that selected him for the entire season, or he is offered back to the team that originally had him. Roberto Clemente is the best player picked in the Rule 5 draft, and good players do pop up every once in a while. The minor league portion is similar, and split up for AA and AAA. The 5+ year rule holds, except the player cannot have played at the level you're selecting him for (if you're selecting someone in the AAA portion, then he can't have played in AAA before). Teams, this time, are not required to keep the player on the 40-man roster, but they do need to keep the player on the 25-man roster of the league in question. Good players are generally not picked in this portion of the Rule 5 draft. The most successful player is probably Alexei Ogando, followed by Scott Podsednik and Eugenio Velez. Other than that, the pool is pretty terrible. It's mostly for teams to take a flier on a yet-unsuccessful player with a good tool or two. Ogando had a good fastball, and Velez was fast.

Whew! Lots of words, but it's all becoming so clear now! But then...

Bonus Round: What is "non-tendered"?

From Garbanzo:

That's part of the arbitration process. If you're arb eligible, and the team doesn't want you any more (Eugenio Velez, Brian Wilson), then the team can just refuse to submit a number for arbitration or offer a contract of any sort. Then you become a free agent, but with the caveat that the team that picks you up will actually get the team control that you still have.

To which El Person responded:

No player can take more than a 20% pay cut (I think it's 20%) through arbitration. If the team's not willing to pay 80% of the previous year's salary, they just don't offer arbitration; that's the non-tender

Myalexandri added:

they are both ways of cutting the guy, but at different points in the employment cycle. non-tendering only happens over the offseason and only with arb-eligible guys who don't technically have a contract with the team. DFAing is what happens to anyone else at any other time (that is, with guys who do have a contract with the team

Finally, Nivra hit us all with some crazy baseballin' knowledge- Giants Edition:

B-wheez earned $8M, iirc, in 2012. He had one year of team control left. During the off-season the Giants faced two choices: (1) Tender him a contract that was at most 20% less than $8M, or $6.4M. This asserts team control, and he has to either (a) accept the offer, (b) submit his own arbitration salary, and then the two go to arbitration, or (c) negotiate with the Giants for a new offer (likely higher). He cannot become a free agent and negotiate with other teams. (2) Non-tender him by not submitting a contract before the arbitration deadline. This is what they chose to do. They didn't feel he was worth a 1 yr $6.4M contract, since he was going to spend 2/3rds of 2013 on the D/L. Once the deadline passes without a tendered contract, Brian becomes a Free Agent. At this point, he is free to negotiate with any team in the league. When he signs a contract, that team then assumes his last year of team control(which would be covered by the contract anyways). He tried to, and found no-takers at the beginning of the year. Finally, mid-season, the Dodgers offered him a $1M contract (that might be the minimum for a player with his service time, I don't know) and he signed.

Well, I think we've all learned some very important lessons today, don't you? Mucho thanks to all involved! 500 word essays are due Monday morning before next class. ;)

And I know things now, Many valuable things, That I hadn't known before...

This FanPost is reader-generated, and it does not necessarily reflect the views of McCovey Chronicles. If the author uses filler to achieve the minimum word requirement, a moderator may edit the FanPost for his or her own amusement.

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