The LoHud Yankees Blog

A New York Yankees blog by Chad Jennings and the staff of The Journal News


Today in The Journal News

Posted by: Peter Abraham - Posted in Misc on Dec 02, 2008 Print This Post Print This Post | Email This Post Email This Post

The Yankees did not offer arbitration to any of their free agents. Controlling costs was the reason, Brian Cashman said.

Remember when they were going to be stocked with draft picks in June? Not any more.

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91 Responses to “Today in The Journal News”

  1. j2 December 2nd, 2008 at 9:43 am

    Ah, a baseball thread…

  2. miggs December 2nd, 2008 at 9:51 am

    Pretty quiet in here this morning.

    Maybe everyone is shocked at that A Rod picture.

    I’m not as disturbed with the thing around his neck as I am with the look on his face.

    The guy looks like a deranged stalker.

  3. Vrsce December 2nd, 2008 at 9:56 am

    A Rod is looking like a girly boy.

  4. Tom December 2nd, 2008 at 9:56 am

    Buster Olney has a good post up today:

    A month ago, the notion of Abreu as a $16 million player didn’t seem so outrageous. In the current climate, however, executives with other teams believe that Abreu might be fortunate to make $8 million. It appears that no other team will offer Abreu anything close to what he would make in arbitration with the Yankees.

    So the Yankees could no longer justify gambling an arbitration offer to Abreu for the sake of draft picks.

    It isn’t that the Yankees don’t have money. But the perceived value of players is plummeting rapidly within the industry, and just like investors who are waiting to see when the bottom of the stock market is really bottom — the Dow Jones didn’t hit bottom at 10,000, nor at 9,000, apparently — teams are waiting to see how far the salaries will fall.

    http://insider.espn.go.com/esp.....ney_buster

  5. Brandon (TEIX IS NOT WORTH IT, GET CC !)..."Don't trade Robi !" December 2nd, 2008 at 9:58 am

    Anyway back to baseball talk, like alot of people tried to say the economy is effecting even the Yankees. I want to hear Heyman spout off again about this. It’s clear because there is no reason why 4 – 5 draft picks should be left on the table.

  6. Braintrust December 2nd, 2008 at 10:01 am

    Arod is Madonna’s lil’ ol’ sissy boy.

  7. Vrsce December 2nd, 2008 at 10:01 am

    Brandon

    The reason you ask for is in the post above yours. read Olney’s column.

  8. yankeeboss December 2nd, 2008 at 10:05 am

    Arod looks happy. Last year was probably emotionally draining with the marriage problems and eventual break-up. Whatever your feelings are about that (Mine personally are, his personal life is none of my business), I hope that this tranlates to a big 2009 from him. Love him or hate him, the Yanks need him more than ever without Giambi & Abreu.

  9. Fran December 2nd, 2008 at 10:12 am

    Yankeeboss – couldn’t agree more. Alex is not asking the press to follow him around all off-season. But all I care about is Alex on the baseball field. And according to past patterns, this should be huge year for Alex-and the Yankees will certainly need it.

  10. Just another handle. December 2nd, 2008 at 10:15 am

    Woke up this morning with an afterthought about Tiger Woods and his relationship coming to an end with Buick.

    Would it not have been a public relations boon for both sides to have settled on $1 contract for Tiger to keep Buick on his bag (just for this year) while still adding another sponsor?

    Does $7M a year over the past 5 years garner no residual good will?

    Just wondering.

  11. Brandon (TEIX IS NOT WORTH IT, GET CC !)..."Don't trade Robi !" December 2nd, 2008 at 10:19 am

    “Brandon

    The reason you ask for is in the post above yours. read Olney’s column”

    Yeh I read that, Rosental’s article gives another take.

  12. SJ44 December 2nd, 2008 at 10:20 am

    Brandon,

    4-5 draft picks, especially first, second and sandwich picks, amount to another 10-12 million dollars. That’s a lot of scratch. Especially for unproven players.

    Welcome to the new reality. The economy IS affecting baseball in a big way. Yesterday just introduced fans publicly to what teams have been saying privately. Teams know they have to pull back now. When a team like the Yankees pull back, they aren’t just doing it in a vacuum. They are doing so because of the economic data they are getting re: the current financial situation in the game.

    Some teams are expecting upwards of a 20% drop in revenue this year. If that’s the case, expect to see a lot more cost cutting throughout the industry.

    Arizona has already laid off 30 employees. Other teams are talking about re-structuring their baseball ops (less scouts, administrators, crosscheckers, etc), and some owners have made it crystal clear to their GM’s this is not the year to add payroll.

    This is the new reality and sports will feel it across the board.

    This current economic climate is not just a “phase”. Its a real problem and organizations throughout sports have to change the way they do business.

    Good businesses make these kind of decisions everyday. While some may believe sports is immune to recessions, its not the case. As we saw yesterday with the way teams handled arbitration decisions.

  13. Brandon (TEIX IS NOT WORTH IT, GET CC !)..."Don't trade Robi !" December 2nd, 2008 at 10:25 am

    SJ long story short “Welcome To Recession”

  14. Patrick December 2nd, 2008 at 10:28 am

    I wonder if Sabathia jumps on that $140 million dollar offer now that we are seeing the realities of the economy’s effect on MLB. With the way teams are hurting around the league, is it even remotely possible that another club comes close to $140 million?

    Maybe this is just me grasping at straws.

  15. SJ44 December 2nd, 2008 at 10:29 am

    The last thing people should do is look for economic reasoning from sportwriters.

    Most (not Olney, whose column was well researched and writted) have no clue about the economy. Most just root themselves in rumors and don’t bother digging beneath the surface anymore.

    How do the uninformed in the media explain the quiet off-season? Do they really believe the entire industry is just waiting on what CC Sabathia does before spending money like a drunken sailor? That is not what’s happening in the marketplace.

    This is serious stuff. More serious than just discussing baseball. Aside from the economic realities, how does a team justify spending a ton of money in this current economic climate, AND raise ticket prices? Talk about sending a bad message to their customers!

    Reality is, teams are going to be very sensitive to the marketplace for a number of reasons. One of which is not overpaying for talent no longer worth their salaries. Another is, they don’t want to send a message of insensitivity to their customers.

    Its bad enough the current price of tickets make attending a game for some a special occasion-type experience. If they price out their fan base completely in these economic times (especially by spending blindly in the off-season), they put their teams in real financial peril.

  16. RonH December 2nd, 2008 at 10:31 am

    Good to hear from SJ44 once again.

  17. SJ44 December 2nd, 2008 at 10:35 am

    Patrick,

    If I was Sabathia’s agent, I’d tell him to take the deal now. Not just because I want to see him on the Yankees. If that deal goes off the table, or if the Yankees decide to change gears, he’s looking at a deal WELL short of 140 million.

    If the Yankees were to bow out of the picture with him, there isn’t any reason for a team to up the ante. In fact, teams could actually lowball him (without the Union having a chance in hell to win a collusion case) because of the economy.

    They could get him at the “bargain” rate of about 90 million for 5 years.

    If I was CC Sabathia, I wouldn’t leave 50 million bucks on the table. Or, more accurately, risk that scenario from possibly happening.

  18. Patrick December 2nd, 2008 at 10:37 am

    It makes sense that the economy is to blame for the current lack of hot stove news. Team executives know what is going on financially because they are in charge of running huge businesses. Players on the other hand don’t understand and probably feel like they are being low balled by teams. There will clearly be a disconnect until the players realize that the market has changed.

    The surprising arbitration decisions from yesterday should clue people in that this isn’t just a negotiating ploy by GM’s. Teams really are hurting financially right now.

  19. pat December 2nd, 2008 at 10:41 am

    Wow! ESPN just reported that NY Giant Steve Smith was held up at gunpoint last Tuesday. Doesn’t excuse Plaxico in any way but it does go to mindset.

  20. Brandon (TEIX IS NOT WORTH IT, GET CC !)..."Don't trade Robi !" December 2nd, 2008 at 10:41 am

    People didn’t believe Hal w/ that offer not being there w/o a time limit. CC the move is yours consider what’s going on in baseball not even baseball just pure sports. Heck just listen to all those sponsors dropping off Tiger Woods’ brand.

  21. Time to "Go John Galt" December 2nd, 2008 at 10:42 am

    There were still a lot of offers of arbitration though.

  22. SJ44 December 2nd, 2008 at 10:44 am

    Patrick,

    I am currently representing a client on a rightsholder deal in the NFL. One would think, of all the leagues in solid financial footing, its the NFL. That would be correct.

    However, because of the current economic climate, the terms of the proposed deal literally change on a daily basis.

    In other words, two parties, both looking to finalize a deal, can’t because of the daily changes in the economy. Its affecting what the final cost of the deal, and how it will be paid, is and how each side can make it work.

    These negotiations, which have been happening since September, gave me all the indications needed to know we are entering a whole new world when it comes to sports and the economy. This is scary stuff.

  23. kd December 2nd, 2008 at 10:52 am

    I think we are seeing that baseball is a business. An entertainment business, and one of the first things that people cut when times are bad.

    When you have cash in this situation, you wait around and get things for much cheaper than they’re worth. Like if you dumped a ton of money into index funds, you might come out ahead.

    I guess I always thing of players as investments, you gotta come out ahead.

  24. Brandon (TEIX IS NOT WORTH IT, GET CC !)..."Don't trade Robi !" December 2nd, 2008 at 10:57 am

    Whoa that’s deep stuff SJ, if the NFL isn’t safe no sport is.

  25. duh December 2nd, 2008 at 10:59 am

    “A month ago, the notion of Abreu as a $16 million player didn’t seem so outrageous. In the current climate, however, executives with other teams believe that Abreu might be fortunate to make $8 million. It appears that no other team will offer Abreu anything close to what he would make in arbitration with the Yankees. ”

    wait, this is impossible. all of the geniuses on LoHud insisted that Cashman was an “idiot” for not offering arbitration to Abreu.

    and yet, as other teams follow suit with guys like Dunn and Burrell and Moyer and Kent, etc, etc, etc, it looks more and more like Cashman was simply making a fairly obvious decision.

    it really is amazing how all i have to do if i want to know if Cashman made the right decision is to come here and read what certain posters have to say and just simply take the opposite opinion.

    keep it up guys!!

  26. Tom December 2nd, 2008 at 10:59 am

    I wonder how the economic situation will affect the draft. Will teams with high draft picks choose a cheaper player? Or, will they choose a player they have no intention of signing then get a compensation pick in the ’10 draft?

  27. Mr. Exceptional December 2nd, 2008 at 10:59 am

    Nice article about Pettitte from Joel Sherman.

    http://tiny.cc/NpwEp

  28. Wave Your Hat December 2nd, 2008 at 11:00 am

    I might buy the notion that the Yanks’ don’t want to overpay for players and that in the new economic climate an arbitrator might be more likely to award a player a higher salary than he would otherwise find on the open market. That’s the only reason I can see for not offering arbitration.

    I’d like to see some evidence of that before buying in, though. If the arbitrator sees the market price drop for players signing new contracts, I would assume that would be reflected in the arbitrator’s decision barring evidence to the contrary.

    The Yanks are leaving a LOT of draft picks on the table. Why not at least offer Moose arbitration in case he changes his mind and unretires the way Clemens did?

    I see a lot of inconsistencies. Why would the Yanks be reluctant to get draft picks because of monetary issues? Bonuses for draft picks are not set in stone – if there’s a new economic climate for draft bonuses that should be reflected in the 2009 draft.

    If the Yanks are paying the same scale as other teams, why shouldn’t they take advantage of the opportunity to sign more picks? I believe it is uncontested that the Yanks have deeper pockets than other teams.

    I also think it’s far from clear what the new economic climate is with respect to free agent offers. If the Yanks’ misjudged the market for CC and offered him too much, then the same argument that says CC should grab the offer immediately says the Yanks should take it off the table immediately.

    The fact that CC hasn’t accepted and the Yanks haven’t taken the offer back indicates to me that we don’t know where the market is yet. Certainly as fans we don’t know.

    So, at this point, I’m far from sold on the Yanks’ rationale for Pettitte and Abreu.

  29. jk December 2nd, 2008 at 11:03 am

    “how does a team justify spending a ton of money in this current economic climate, AND raise ticket prices? Talk about sending a bad message to their customers!”

    This is exactly what the Yankees are doing. Huge ticket price increses in the new stadium plus a huge offer to Sabathia while the fan base is getting pink slips and pay cuts.

  30. Tom B December 2nd, 2008 at 11:06 am

    The RSS Feed is broken, XML Parse error…

  31. CB December 2nd, 2008 at 11:07 am

    Of all of the arbitration decision last night the one that said the most was Patt Burrell and the Phillies.

    The Phillies are not a small market team and they just won the series. In general revenue go up the year after a team wins the series.

    Burrell hit 33 HR and had an .875 OPS last season at the age of 32.

    He made $14M last year. In arbitration he might have made $16M.

    Burrell can hit. But he’s one of the less athletic players in the game and that raises concerns that as a player with “old man skills” he could go into rapid decline e.g. Richie Sexson.

    Players like Burrell have value short term but become risky on long term deals.

    What’s so interesting about what the Phillies did is that 4 months ago if you’d told them that if you offerred Burrell arbitration and he took it would you be happy? They would have jumped at that offer.

    Bringing a guy like Burrell back on a one year arb deal is very favorable for the team – they get the short term production without the long term risk for decline.

    But there’s no way anyone would have thouht Burrell would have accepted given his series and his age. He’s 32 – this might be his last chance to get a multi-year deal. I’m sure he was thinking about a 4 year deal on the market.

    So it would seem an absolute no brainer that the Phillies would offer arbitration. He’s seems very unlikely to accept and even if he did the Phillies get a productive bat on a one year deal which would work out ideally for them.

    With Abreu you could say the yankees didn’t offer due to his baseline salary and his age. With Adam Dunn you could say it was the precarious financial budget of the D’Backs.

    The Phillies decision to not offer Burrell is the most telling because it would seem that it was in both the clubs interest to offer and the players interest not to accept. This is especially true for the club as a one year deal should have been fine.

    I’m sure the issues of revenue and budget were front and center.

    But what the Phil’s not offering arbitration really said is that they didn’t feel that they could put an accurate price on Burrell’s services because they no longer knew what the market for him was. The established market for a .850 OPS, 32 year old left fielder is no longer an accurate gauge of worth.

    4 months ago Burrell on a one year $16M deal was a terrific value. Now the Phillies are saying they think that would be an extremely poor value. So poor that they gave up the value of draft picks to shield themselves from the risk that $16M/one year would be way over the new market price.

    The market equilibrium for pricing in baseball may be shifting downwards and until a new equilibrium price is reached there’s going to be a lot of uncertainty for both teams and players.

  32. duh December 2nd, 2008 at 11:07 am

    “If the arbitrator sees the market price drop for players signing new contracts, I would assume that would be reflected in the arbitrator’s decision barring evidence to the contrary.”

    and your assumption would be wrong.

    the arbiter would be looking at the universe of existing contracts, and the tiny handful of comparable contracts signed in this environment would be a drop in the bucket.

  33. Vrsce December 2nd, 2008 at 11:07 am

    Mr. Exceptional

    Thanks for the link to J. Sherman’s NY Post article on Pettitte. I have copied the following excerpt:

    “If Pettitte signs elsewhere, regardless of the dollar figure, he should be viewed as a world-class phony forever around here. There should be no more pardons. He should receive no invites to future Old-Timers Games, hear no cheers when the dynastic teams reassemble.

    In his moment of need, when it was revealed Pettitte was both a liar and cheater, the Yankees stood by him last season. At that time, Pettitte was only too happy to say the Yankees were the only team he ever wanted to play for any more. He did not say he only wanted to play for the Yankees unless they offer him a paycut.The Yanks have indeed offered that cut. Pettitte made $16 million last year and, according to sources, he was offered $10 million to return in 2009. So far, Pettitte has rejected that bid while his camp has done nothing to dispel reports linking him to Joe Torre and the Dodgers. “

  34. Wave Your Hat December 2nd, 2008 at 11:09 am

    “the arbiter would be looking at the universe of existing contracts, and the tiny handful of comparable contracts signed in this environment would be a drop in the bucket.”

    Any evidence for that, or did the Ouija board tell you?

  35. duh December 2nd, 2008 at 11:10 am

    “The Yanks are leaving a LOT of draft picks on the table. ”

    no, they aren’t.

    they are leaving the POSSIBILITY of getting SOME draft picks on the table.

    if there was no risk of not getting the picks, they would have offered arbitration.

    all of the evidence suggests that it is VERY POSSIBLE that the Yankees may not have gotten ANY draft picks.

    it’s certainly possible they may have gotten SOME of the picks, but there is almost no chance they would have gotten ALL of the picks we thought they were going to get 2 months ago.

  36. Wave Your Hat December 2nd, 2008 at 11:13 am

    duh, your last post begs the very question that I was addressing in the first place.

  37. Fredo Corleone December 2nd, 2008 at 11:14 am

    “In his moment of need, when it was revealed Pettitte was both a liar and cheater, the Yankees stood by him last season”

    Before we give the Yankees a standing ovation for supporting Pettitte thru his trials and tirbulations of last offseason, let us not forget that THEY NEEDED HIM. Had they not, you do have to wonder a little whether he gets the Clemens/Torre treatment rather than the nurturing pat on the back.

  38. Patrick December 2nd, 2008 at 11:14 am

    “Any evidence for that, or did the Ouija board tell you? ”

    That’s just how arbitration works. To determine a player’s salary the arbiter looks at the player’s stats and how comparable players around the league are paid.

  39. Patrick December 2nd, 2008 at 11:16 am

    Yeah I don’t get why Pettitte is such a bad guy for looking at other offers. If the Dodgers offer him $16 million why shouldn’t he take it?

    People seem to forget that Pettitte was one of the reasons the Yankees cited for not trading for Santana. Once Pettitte agreed to come back the Yanks cooled on the Santana talks. Its not like they graciously accepted him back because they were being nice. The Yankees signed Pettitte because they needed him.

  40. Fredo Corleone December 2nd, 2008 at 11:17 am

    “Any evidence for that, or did the Ouija board tell you?”

    WYH, No evidence will exist until the first arbitration case comes and goes, but there’s no question that Cashman and some other GM’s believe it wholeheartedly.

  41. Brandon (TEIX IS NOT WORTH IT, GET CC !)..."Don't trade Robi !" December 2nd, 2008 at 11:18 am

    Loretta is now on the official non-arbitration list, Astros declined his arbitration making him Type B FA.

  42. Patrick December 2nd, 2008 at 11:19 am

    I was one of those calling Cashman an idiot for not offering Abreu arbitration and I’m still not convinced it wasn’t a bad move. However, now that I see Dunn and Burrell not getting arbitration I can see the reasoning for Cashman’s decision. Clearly there is not a big market for aging outfielders that can’t field. If 3 seperate GM’s came to the same conclusion it has to have some validity.

  43. Vrsce December 2nd, 2008 at 11:20 am

    Fredo Corleone

    Andy is a backstabber and weak,he cried like a baby last year; was supported by the Yanks when he needed it and this year after a very bad second half is unwilling to take less than 16mm.

    Your affinity for him is probably explained by your moniker. The real Fredo was also a traitor and crybaby.

  44. duh December 2nd, 2008 at 11:20 am

    “duh, your last post begs the very question that I was addressing in the first place.”

    ok. maybe i misunderstood your argument. my bad if i did.

    my point is that the events of the last 24 hours seem to indicate that Cashman’s logic was sound, at least on Abreu.

    think about this: Abreu will now have to wait for Manny, Dunn, Burrell, and Ibanez to sign.

    do you really think that after 4 other corner OFers get contracts, there will still be another team willing to give Abreu enough money to make arbitration less attractive?

  45. pat December 2nd, 2008 at 11:23 am

    CB

    Maybe revenue wasn’t the reason on Burrell and Manny is.

    Until the puzzle completes itself, there is no way of knowing for sure whether teams are posturing an austerity budget or will be following one.

  46. Patrick December 2nd, 2008 at 11:23 am

    Why are fans turning on Pettitte? I just don’t get it. If Pettitte acts like he will only play with the Yanks he has no negotiating leverage. They will offer him whatever they feel like and he’ll take it. However if he lets it slip that he would be open to playing with the Dodgers it forces the Yankees to come a little bit closer to $16 million. And why shouldn’t Pettitte try to make the most money possible? Its his right to do so.

  47. Fredo Corleone December 2nd, 2008 at 11:24 am

    “think about this: Abreu will now have to wait for Manny, Dunn, Burrell, and Ibanez to sign.”

    Abreu has moved ahead of Ibanez in the hit parade.

  48. Wave Your Hat December 2nd, 2008 at 11:25 am

    Patrick, Fredo and duh,

    As I understand it, the arbitrator’s job is to determine what salary a willing buyer and a willing seller would have agreed upon. To do that, they would of course look at salaries of similar players which were agreed upon willingly.

    In the past, salaries have only gone up, so looking at last year’s salaries willingly arrived at would be a conservative indication of worth and what other willing buyers and sellers would agree upon.

    However, in a falling market, last year’s salaries would not be indicative of what a willing buyer and seller would pay. I would think the most recent contracts would be a much better indicator of price and price trends.

    Now, I may be wrong. All I said in my first post was that I would like to see some evidence that the arbitrator would not heavily weight new contracts in making his decision.

    I don’t know why Cashman made the decisions he did. Fredo, your conclusion is one possible one, and you may be right. But I don’t think it is a necessary one or the only conclusion you can draw.

    Maybe the Yanks just don’t want to spend money, or maybe they goofed. Or maybe you’re right. I just don’t think we have enough information to decide yet.

  49. Fredo Corleone December 2nd, 2008 at 11:28 am

    “Your affinity for him is probably explained by your moniker.”

    Very clever, Beavis.

    Yankees support of Pettitte was a business decision. They needed him in the rotation last year. He went into ’08 along with Wang as the only two guys you could reasonably count on for 200 league average or better innings. You notice they did not need Clemens and accordingly treated him like a leper.

  50. CB December 2nd, 2008 at 11:30 am

    “Maybe revenue wasn’t the reason on Burrell and Manny is. ”

    But that’s not the point. In years past even if the Phillies did prefer Manny they would have still offered Burrell arbitration because they would have deemed the risk that he’d accept it as miniscule.

    This year that entire calculation changed. It has nothing to do with a preference for another player. It has to do with how they are perceiving risk on in the market place.

    They basically decided that the risk of him accepting and getting paid $16M or so for one year was greater than the risk of offering arbitration and the opportunity of getting picks if he declines.

    The opportunity cost of those picks has gone up to them because they feel that $16M for one year may be wildly out of line with what the market will bear for a player like Burrell.

  51. CB December 2nd, 2008 at 11:32 am

    “Abreu has moved ahead of Ibanez in the hit parade.”

    Not so sure about that. Ibanez will likely be cheaper. Depends on the team’s budgets and what Bobby is willing to take.

  52. Fredo Corleone December 2nd, 2008 at 11:33 am

    WYH:

    Yeah, I’m speculating 100%. Yet I have to believe Cashman’s understanding of the arbitration process is better than than 99.976% of the people.

  53. Vrsce December 2nd, 2008 at 11:35 am

    “You notice they did not need Clemens and accordingly treated him like a leper.”

    Exactly Butthead, Pettitte behaved as badly as Clemens, lied, took HGH and was forgiven and welcomed back. Now he is the victim all over again. He is an ungrateful wretch, with a low character, or a phony, as Joel Sherman states in his article.

  54. Wave Your Hat December 2nd, 2008 at 11:35 am

    Just as Manny is a possible reason the Phillies didn’t offer Burrell arbitration, Teixeira might be a reason the Yanks did not offer Abreu arbitration.

    The Yanks don’t have the budget for Abreu plus all of the other goodies on their shopping list. They can’t have CC, Texeira and Abreu, for instance, or CC, Lowe, Burnett and Abreu.

    So Abreu may just have been the odd man out and the Yanks could not take the chance he would accept arbitration.

    That doesn’t explain Pettitte though.

  55. Wave Your Hat December 2nd, 2008 at 11:36 am

    “Yet I have to believe Cashman’s understanding of the arbitration process is better than than 99.976% of the people.”

    It’s certainly better than mine, and I never claimed otherwise.

    All I’m saying is Cachman didn’t tell us his reasoning, and it might have nothing to do with the arbitration process.

  56. Fredo Corleone December 2nd, 2008 at 11:36 am

    “Not so sure about that. Ibanez will likely be cheaper.”

    Maybe, CB. Not sure. My thinking is that while he may be a little cheaper, it isn’t so much so that it offsets passing on a 1st rounder to Seattle.

  57. Fredo Corleone December 2nd, 2008 at 11:38 am

    “All I’m saying is Cachman didn’t tell us his reasoning, and it might have nothing to do with the arbitration process”

    Actually he did tell us.

  58. CB December 2nd, 2008 at 11:43 am

    “However, in a falling market, last year’s salaries would not be indicative of what a willing buyer and seller would pay.”

    Wave,

    In a falling market there is no way to directly gauge what sellers and buyers will pay.

    That’s why there is so much volatility for example in the stock market.

    We aren’t in an equilibrium situation. And that makes pricing any asset difficult.

    The arbitration process is biased towards the existing equilibrium pricing conditions because it’s based on empirical data – not projections. At least it’s never been based on projections in the past in any way.

    Ultimately, it’s unclear how things will go.

    So it’s simply a matter of how one wants to stratify risk.

    If the player accepts arbitration the yankees do not get any reduction in payroll nor do they get he draft picks.

    How do you weigh that? Well it’s a combination of what the probability of the player accepting is and the magnitude of the loss incurred.

    It’s difficult for us to gauge both – but particularly difficult to gauge the magnitude of the potential loss as we don’t know the team’s budget nor their plans.

    You want them to go after Tex. How do you know that the $16M they’ve decided to save on Abreu isn’t already budgeted towards pursuing Tex? Or it may be budgeted towards pursuing free agent pitcher #2.

    So how do the yankee’s manage risk here? Sure the probability of Abreu accepting may be small. But the consequences of him accepting may be catastrophic to the organization. Say they were planning on putting Tex in the #3 hole for the next 8 years and Abreu accepting arbitration makes that impossible because they do have a fixed budget?

    On the flip side there’s a real opportunity cost to minimizing your risk exposure – you don’t get the picks.

    But that’s nothing new – there’s always some kind of cost associated with managing risk.

    There’s different kinds of opportunity costs they are weighing here.

  59. duh December 2nd, 2008 at 11:47 am

    “The Yanks don’t have the budget for Abreu plus all of the other goodies on their shopping list. They can’t have CC, Texeira and Abreu, for instance, or CC, Lowe, Burnett and Abreu.

    So Abreu may just have been the odd man out and the Yanks could not take the chance he would accept arbitration.

    That doesn’t explain Pettitte though.”

    but it does. the same principle applies, just on a lesser scale.

    the Yankees don’t room in their budget for all of the “goodies” plus Andy Pettitte at $16M.

    that is why they offered him $10M. $10M is a very fair assessment of Pettitte’s current market value. but Pettitte rejected that notion.

    Pettitte will probably realize over the next few days that he has overestimated his value in this market, and he and the Yankees will come to an amicable compromise.

  60. Kill.Schill(ing) December 2nd, 2008 at 11:48 am

    Cashman told us, but the problem is that few of us speak “Dubya”. I certainly don’t understand the language.

    “When we started this process”– Brian Cashman

    In Cashmanspeak, every press appearance must invoke “the process.” The process is sacrosanct. It’s Mecca, Jerusalem, and Rome all wrapped up into one. It’s omnipotent. The process. Know it, obey it, love it.

    Never, Never, Never, violate THE PROCESS. Theo violated the process by signing Tazawa. But Theo doesn’t belong to the club. He doesn’t belong to the horsey set. He doesn’t sip cocktails at the Derby or know anything, anything, about raising horses down in Kentucky. Theo never even played baseball. Not even in college.

    No, unlike that interloper and apostate in Boston, Cashman– scourge of Lewinskys in the Oval Office– never never never never disrespects the process.

    Why didn’t the Yankees offer arbitration to Abreu and Pettitte?

    The Money? NO. The Draft Picks? NO.

    It was because of THE PROCESS!!

  61. Wave Your Hat December 2nd, 2008 at 11:49 am

    CB-

    I agree Teixeira, or some other combination of players the Yanks want, might preclude offering Abreu arbitration. That was the point of my 11:35 post.

    Somehow, that seems a more likely explanation to me than cost certainty. I mean, the Yanks will offer Wang and Nady arbitration, right? So it’s not like they are opposed on principal.

    But maybe I’m living in the past and haven’t adapted to the new world we live in.

  62. duh December 2nd, 2008 at 11:50 am

    “Maybe, CB. Not sure. My thinking is that while he may be a little cheaper, it isn’t so much so that it offsets passing on a 1st rounder to Seattle.”

    sure, but there are 15 teams who have their first round pick protected.

    of the remaining 15 teams, some of them will also sign other, higher ranked Type A free agents, thus already giving up their first round pick.

    there are plenty of opportunities for teams to sign Ibanez without it directly costing their first round pick.

  63. CB December 2nd, 2008 at 11:51 am

    “My thinking is that while he may be a little cheaper, it isn’t so much so that it offsets passing on a 1st rounder to Seattle.”

    Fredo,

    Makes sense. Mine was just a guess. But there’s always a relationship between talent and money. That’s what the yankee’s argument in the Santana trade last year was.

    Just a guess but it seems like that equilibrium may be shifting now more towards the money side and less towards the talent side.

    Just a guess. I think it depends on how worried teams are about cash.

    For instance – it seems pretty clear that the mets will not go over the luxury tax line under any circumstances. They’ve never been real aggressive in the draft as it is and they want to win now.

    Will they value the extra cash they would get by signing Ibanez more than the talent difference and the pick?

    Not sure. It’ll be interesting to see.

  64. Just another handle. December 2nd, 2008 at 11:51 am

    In light of the rapidly changing economy I wonder how good Hank feels about chasing after Afraud last year with no other suitors in sight? LMFAO

  65. duh December 2nd, 2008 at 11:53 am

    “Somehow, that seems a more likely explanation to me than cost certainty. I mean, the Yanks will offer Wang and Nady arbitration, right? So it’s not like they are opposed on principal.”

    completely different situation. it has nothing to do with Abreu and Pettitte at all.

    Wang and Nady are not free agents. for players of that nature, there are “no surprises”.

    everyone knows within about $1M what Nady and Wang stand to make in arbitration.

  66. Wave Your Hat December 2nd, 2008 at 11:55 am

    duh, I guess you are right on that.

  67. duh December 2nd, 2008 at 11:56 am

    “Why didn’t the Yankees offer arbitration to Abreu and Pettitte?

    The Money? NO. The Draft Picks? NO.

    It was because of THE PROCESS!!”

    Way to make an argument out of something of zero importance. I’d imagine this was some lame attempt at humor?

  68. CB December 2nd, 2008 at 11:57 am

    “I mean, the Yanks will offer Wang and Nady arbitration, right? So it’s not like they are opposed on principal.”

    Sure. But the baseline risk is much less because neither Nady nor Wang is going to be potentially pulling in $18M for a season. Nady is in line for $4M at the most. Wang isn’t making much either.

    Those players also exist in an artificial market where costs are scaled as they are under team control.

    If the Yankees had offered Abreu arbitration and he gets $18M and then pat burrell winds up getting $10-11M on the open market the yankees would have looked like fools.

    They would have grossly overpaid for talent. That’s the kind of risk they were looking to avoid – the risk of overpaying a 35 years old outfielder on the decline 80% more than his going market rate.

    If the prices of players are going down then using those marginal dollars in the open market would return much better value.

  69. Wave Your Hat December 2nd, 2008 at 12:04 pm

    “If the Yankees had offered Abreu arbitration and he gets $18M and then pat burrell winds up getting $10-11M on the open market the yankees would have looked like fools.

    They would have grossly overpaid for talent. That’s the kind of risk they were looking to avoid – the risk of overpaying a 35 years old outfielder on the decline 80% more than his going market rate.”

    Maybe, but on the other hand it would have only been for one year. Burrell will presumably sign a mulkti year contract. The would have bought payroll flexibility at the price of a higher one year cost. And, that assumes that he would have gotten $18MM in arbitration, which is not yet clear.

    I like the notion that the Yanks just want to go a different way and didn’t want to take the chance of being forced to go with Abreu.

    Pettitte, I don’t know. One year of him, as opposed to three or four years, say, of another free agent pitcher, has some attraction in my mind, even if the yearly cost turned out higher.

  70. Kill.Schill(ing) December 2nd, 2008 at 12:04 pm

    If the name fits, wear it.

  71. duh December 2nd, 2008 at 12:08 pm

    how clever.

  72. CB December 2nd, 2008 at 12:13 pm

    “The would have bought payroll flexibility at the price of a higher one year cost.”

    Not necessarily. For the 2009 season they would have had much, much less payroll flexibility they they were thinking they would have had.

    They just weren’t ever anticipating bringing back Abreu, never mind at $18M or so.

    If Pat Burrell were to sign a two year $20M contract and Abreu got $18M to play one year they would have gotten killed on short term flexibility and gained no longer term flexibility.

    Not saying this would happen. But I do think there is some risk this could happen. The unathletic corner outfielder market and DH markets are now flooded with talent.

    How people price risk varies a lot. The yankees decided they were not going to accept any risk because the opportunity cost of losing payroll flexibility for 2009 was too great.

    Right decision? Wrong decision? Tough to say. But given the events of last night it seems that Cashman read the market correctly.

  73. SJ44 December 2nd, 2008 at 12:25 pm

    The days of overpaying a player, even for one year, by nearly 40% (using the Abreu-Burrel example) are over.

    It was bad business before the economy tanked. Now, its economic suicide to do business in that way.

    Same goes for Pettitte. Nobody is giving Andy Pettitte a one year, 16 million dollar deal in this marketplace. Not happening. ESPECIALLY not happening with the Dodgers.
    They are one of the teams that has serious financial questions because of the way they structured their debt when the McCourt’s bought the team.

    Arbitrators don’t look at outside forces (ie: the economy) during the hearings. Its strictly based on the marketplace and the player/team figures given to the arbitrator.

    The Yankees probably felt that even if they “won” a hearing with Abreu (if he did chose arbitration), it would cost them 5-8 million dollars more than they wanted to pay him for 2009.

    They have no intention of paying anything close to 16 million for Pettitte next year, which took arbitration off the table as an option.

  74. Wave Your Hat December 2nd, 2008 at 12:30 pm

    “Arbitrators don’t look at outside forces (ie: the economy) during the hearings. Its strictly based on the marketplace and the player/team figures given to the arbitrator.”

    I don’t think anyone was arguing that. The question was, would an arbitrator more heavily weight a contract signed this year than last year? And, if it reflected a lower pay scale, would that be reflected in an arbitrator’s decision?

    CB, I think we are saying the same thing with respect to Abreu.

    With respect to Pettitte, the only possibilities seem to be either that (1) the Yanks don’t want him, and don’t want him so much that the opportunity to get two draft picks was less attractive than his signing would be unattractive, or (2) they want him think he will sign with them at a lower price than the arbitrator would award. I guess only time will tell, as they say.

    Consider, by the way, that the notion of risk avoidance runs several ways. If the market is unsettled, it may be riskier to sign a player to a long term contract, even at a substantially lower price, than to accept a one year contract, even at a higher price. If the market continues to decline year over year, then what looked like a cheap long-term deal may turn out to be more expensive than the overpriced one-year deal.

    I doubt whether any of the teams are that pessimistic yet, but reading some of the more pessimistic economists out there, a year over year decline is not out of the question.

  75. CB December 2nd, 2008 at 12:39 pm

    “If the market is unsettled, it may be riskier to sign a player to a long term contract, ”

    What’s long term now? We don’t have a clear idea because the market’s not in equilibrium.

    Who is to say a 3 year deal for many players won’t know be “long term?”

    I think the Pettite and Abreu situations are analagous.

    Pettite was the second highest paid pitcher in the game last year.

    Arbitration was never going to lower that figure that much. It just wasn’t. It’s not a process set up to adapt to market corrections. The aribtrator’s aren’t economists – they aren’t guys who will read and project where the market is headed.

    The yankees were not planning on paying Andy Pettite $16M this year.

    I think they’ve wired that assumption into their budgeting. I’d guess that part of their offer to CC was based on the idea that they wouldn’t be paying Pettite as if he were one of the best starters in baseball.

    The yankees were basically saying that they felt there was a large gap between the arbitration price for Pettite/Abreu and their likely price on the current market.

    That spread made the risk of offering either arbitration prohibitive.

    And in the case of Pettite – it was almost guaranteed that if he was offered arbitration he would have accepted as he’s only seeking a one year deal.

    Teams announced pretty clearly yesterday that for many players they don’t believe that arbitration is a fair gauge of the market.

    Given that they decided to pay the opportunity cost of losing picks in order to avoid the risk of paying players far above their current worth.

  76. SJ44 December 2nd, 2008 at 12:46 pm

    Wave,

    If Abreu went to arbitration with the Yankees, his agent would probably ask for 18 million. Given the numbers he had over last season, especially in comparison with someone making 18 million (Andruw Jones for example), its not an unheard of number.

    The Yankees would probably come in between 8-10 million. The arbitrator can only choose one number or the other in the process.

    The Yankees probably figured they would lose based on the fact their number would be so low the arbitrator couldn’t possibly rule in their favor, despite current market conditions.

    As far as the multi-year vs. one year argument, a lot of people in the game feel the “middle class” of player will get trambled in this climate.

    For guys like Sabathia and Tex, they will still get multi-year offers. For others, its going to be challenging.

    I don’t see AJ Burnett getting 5 years. Nor do I see Manny getting 3.

    I think the only two guys who “score” in this marketplace (and that may change soon if they don’t get their deals done) are CC and Tex.

    Everybody else will be fighting for the quarters on the floor, IMO.

  77. Wave Your Hat December 2nd, 2008 at 12:50 pm

    Then were the Yanks being consistent offering Marte $12MM for three years?

    I’m just not sure we can be so convinced we know what the Yanks are up to here.

  78. CB December 2nd, 2008 at 12:53 pm

    “I think the only two guys who “score” in this marketplace (and that may change soon if they don’t get their deals done) are CC and Tex.”

    Guys like Dunn may be very reasonably priced compared to Tex.

    That’s where value in this market may fall.

    You’ll have to pay Tex according to the old market place. Dunn and Burrell look like they’ll get priced under current conditions.

    Would Dunn accept at two year $28M deal?

    Hard to pass that up compared to Tex at something like 8yrs/160-170.

    The yankees may be light in hitting right now. But there’s going to be value in the market on productive second tier bats out there.

    The market even for Manny may really collapse, particularly if the Angels do sign Tex. The Dodgers don’t seem serious about bringing Manny back.

  79. CB December 2nd, 2008 at 12:56 pm

    “Then were the Yanks being consistent offering Marte $12MM for three years?”

    It’s been a very cold market so far. The players who have attracted by far the most attention are left handed relievers.

    Based on what Jeremy Affeldt got I think the yankees read the market for Marte correctly.

    Marte is much better than Affeldt. If he had hit the market I’d guess that a team like the Indians may have signed him as a low cost closer at around $6m/3 yrs.

    I think they made the right move on Marte. I think they read the market correctly.

    No indication that he was signed to an inflated price.

  80. SJ44 December 2nd, 2008 at 12:57 pm

    I would say they were correct in their assessment of Marte.

    LH relievers are tough to come by. They really like him and he is an effective pitcher when used properly.

    Even in this marketplace, 4 million dollars per year for a solid bullpen contributor is not a lot money.

    Moreover, if it didn’t work out, that’s not a bad contract to move after 2009.

    I don’t see that deal as an “out of whack” deal in the current marketplace.

    I don’t buy the argument they, “don’t know what they are doing”, when they acquired an under 30 first baseman for a third of the cost of Giambi in 2009, made the largest offer to a pitcher ever (CC), and didn’t offer arbitration to two guys who are on the downside of their careers.

    I don’t see those decisions as being out of whack. Its not like they are making 4 year offers to the Carl Pavano’s of the world.

    If nothing else, it seems they are learning from their mistakes of the past.

  81. saucY December 2nd, 2008 at 1:12 pm

    might be a dumb question but whats the difference between this facebook thing and the one i added a few weeks ago?

  82. Clipper December 2nd, 2008 at 2:06 pm

    Television camera crews will show a lot of field level shots to disguise how many empty seats there will be at many venues. Similar to Tropicana Field where the cameras whiz by all the empty seats in many sections.

  83. Don W December 2nd, 2008 at 2:41 pm

    Fredo Corleone December 2nd, 2008 at 11:28 am

    “Yankees support of Pettitte was a business decision. They needed him in the rotation last year. He went into ‘08 along with Wang as the only two guys you could reasonably count on for 200 league average or better innings. You notice they did not need Clemens and accordingly treated him like a leper.”

    You’ll have to explain why the Yankees stood behind Gooden and Strawberry years after their playing days were over. The Yankees and George S specifically have a history of being loyal to those that earned their Pinstripes.

    Andy P was worthy of standing behind, what he admitted to, while wrong, was an attempt to heal up and help his team. Clemens did it for glory just like Bonds.

  84. bodhisattva December 2nd, 2008 at 4:43 pm

    Patrick
    December 2nd, 2008 at 11:23 am——————————————————————–

    God forbid Pettitte should look after his own interests. When Paul Coffey left Edmonton, the entire city despised him. Because they let people with a puny morality tangled up with envy and unrealized desires -people like Joel Sherman – run their little emotional lives.

    There’s nothing rational about it; a media which cannot hide its disdain for and envy of the professional athletes it covers takes every opportunity to revenge itself on them, turning everything into a morality play.

    I guess Pettitte is supposed to genuflect because the Yankees “stood by him.” As pointed out, the player was under contract; the Yankees were just being smart – not loyal.

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