Good morning Fackers. We're more than halfway through November. The free agency signing period opens in full this Friday. However, since the deadline for teams to offer their own free agents arbitration isn't until December 1st, it's unlikely that we'll see any signings before then. Teams that lose free agents prior to the arbitration deadline are automatically entitled to the appropriate draft pick compensation.
We may see a few unclassified free agents sign since they carry no compensation, or a few Type B free agents sign since the signing team does not surrender a draft pick of their own. Generally speaking though, it's the Type A free agents that set the market, and since draft pick compensation for a Type A free agent requires the signing team to surrender their first round draft pick (or second round pick for the teams with the top fifteen picks), it's unlikely that we'll see any Type A's sign - and therefore unlikely that we'll see the market set - until after December 1st.
In baseball's changing economic landscape, extending an arbitration offer isn't the no-brainer it once was. As the U.S. economy nosedived last fall, so too did the market for free agents. The Yankees rightly decided not extend arbitration offers to the likes of Jason Giambi, Bobby Abreu, and even Andy Pettitte, as they stood to earn more in arbitration than they would on the open market. In a similar vein, this fall, baseball insiders - notably Buster Olney - are predicting widespread non-tendering of arbitration eligible players whose likely arbitration raises exceed their value to their club. Such situations have already precipitated the trades of J.J. Hardy by the Brewers and Jeremy Hermida by the Marlins this off-season.
As far as the Yankees are concerned, they have three arbitration decisions to make on their own free agents this year: Type B free agents Xavier Nady and Andy Pettitte, and Type A free agent Johnny Damon.
While Andy Pettitte is almost assured to return and Xavier Nady offers a high risk, high reward proposition at a reasonable price tag, Johnny Damon presents the most interesting case of the three. While Damon has stated his desire to return to the Yankees since early in the season, there have also been rumblings of his wanting a multiyear contract and not affording the Yankees a "hometown discount". How much of that is posturing by Damon and agent Scott Boras remains to be seen.
Ideally, the Yankees would want to sign Damon for a single year, maybe two, at a salary comparable to the two year, $19M extension Bobby Abreu signed with the Angels earlier this month. However, Damon is coming off a outstanding season. There are teams out there with need (Giants) a player like Damon and GM's without the acumen (Brian Sabean) who might offer Damon what he wants both in terms of years and dollars.
By no means should the Yankees cave to such demands on the part of Damon. However, without resigning Damon on their terms, the Yankees are left with a series of less favorable options: play some combination of Cabrera/Gardner/Jackson in LF/CF, make a potentially costly trade for Curtis Granderson or another outfielder, or pursue a big ticket free agent such as Jason Bay or Matt Holiday, both of whom would require a major commitment in terms of both dollars and years.
Thus, it might be a calculated risk for the Yankees to indeed offer arbitration to Damon. While this would be a departure from the tact they took with Abreu last off-season, the Yankees have a need for Damon, whereas last year Abreu would have been a superfluous and expensive part in addition to Damon, Nady, Swisher, and Matsui. Worst case scenario, Damon would accept. This would ensure him a raise on the $13M he made last year, likely leaving him in the neighborhood of $15M-$16M on a one year deal.
This would certainly be more than Damon could get on the open market and likely more than he is worth - but not by much. Fangraphs.com places Damon's value at $13.6M this past season and $16.4M in 2008. Offering him arbitration might force them to pay a small premium for his services, but it's a premium the Yankees could likely afford to absorb. Further, it would assure that they keep Damon's services for a time frame of their choosing, and would give them the added safety net of an additional first round and supplemental round pick should Damon find his multiyear deal elsewhere.
So what do you think? Should the Yankees offer arbitration to Johnny Damon?