In response to numerous e-mails from people, I double-checked with Brian Cashman today.
The Yankees do in fact have the right to offer Alex Rodriguez arbitration. Cashman said they would and that they would receive compensation in the form of draft picks.
“We want the picks,” he said in an e-mail.
If Scott Boras somehow accepted, A-Rod would get a one-year deal with a raise. That would certainly be OK with the Yankees. But there is little chance of that happening.