Understanding the Twins' Arbitration Decisions

The Twins have announced they offered arbitration to SP Carl Pavano, RP Jesse Crain, and 2B Orlando Hudson. The team declined to offer arbitration to RP Matt Guerrier, RP Brian Fuentes, and RP Jon Rauch.

Tuesday evening was the deadline for teams to offer salary arbitration to their six eligible players. On Monday, Jesse posted his best guesses for how the team would handle the deadline. Below is a chart that compares those predictions with what actually transpired last night.

Player

Type

Prediction

Reality

Matt Guerrier

A

Offered

Not Offered

Carl Pavano

A

Offered

Offered

Jesse Crain

B

Offered

Offered

Brian Fuentes

B

Not Offered

Not Offered

Orlando Hudson

B

Offered

Offered

Jon Rauch

B

Offered

Not Offered

Jesse nailed four of the decisions, with Guerrier and Rauch being the two exemptions. Rather than recapping what Jesse wrote Monday about the decisions on Pavano, Crain, Fuentes, and Hudson, I thought we could focus a little more on the two surprises.

Matt Guerrier

As a Type A free agent, Guerrier presented a very difficult choice for the Twins. If you offer him arbitration and he declines, he would net the team two additional draft picks, including the possibility of a first rounder. If he accepts, the team is on the hook for about $5 million, which would come directly out of the budget the team will use to retain players like Capps, Hardy, and Thome, and to pursue some of those "buy-low" free agents Mister_S has identified.

The Twins decision not to offer Guerrier arbitration means one thing: they believe Guerrier would have accepted. The Twins were so sure of that fact - and so fearful of its implications on the team's remaining payroll - that they were willing to forego the possibility of bringing in two draft picks by offering him arbitration.

One can certainly understand their position: Guerrier has a strong track record (in four of the past five seasons, he's posted ERAs between 2.35 and 3.36), but has never been used as a closer, nor does he have dominant stuff. His status as a type-A free agent would have severely limited his market, and it's hard to believe that any multi-year deal he would have been offered would have meant a bigger pay day than collecting $5 million in 2011 and seeking another contract in 2012.

At the end of the day, I still think Jesse's predicted scenario - the Twins offer arbitration, but Guerrier signs a multi-year deal somewhere else - could have certainly played out, but I have a hard time criticizing the Twins for playing it safe, at a time when discretionary dollars will be so scarce.

Jon Rauch

I gotta say, I (like Jesse), was pretty darn sure the Twins would offer Rauch arbitration. With all of the holes in the bullpen and the question marks surrounding Nathan, Rauch seemed like a natural, reasonably-priced fit to provide some needed depth in the pen. It also seems likely that some team will reward him with a multi-year deal - especially because his Type B status means they wouldn't have to part with a first round pick to sign him - meaning that offering him arbitration likely meant getting a free draft pick.

Of course, we can't be certain what Rauch would have received via arbitration. Jesse estimated $3.5 million, which seems reasonable, but does the 49 saves Rauch as accumulated over the past three seasons push his arbitration award closer to $5 or $6 million? If so, the Twins may have made a very smart decision.

More than anything, I look at the Twins decision not to offer Rauch (and, similarly, Guerrier) arbitration as simply a move to limit the team's exposure to the uncertainty inherent in the arbitration system. By offering arbitration to Pavano, Hudson, and Crain, the Twins have accepted a certain amount of risk: while we may think it's likely that all three will opt for free agency, it's at least plausible that all three players could choose to accept the Twins' offer. If so, that has dramatic implications for the Twins payroll.

While we're dealing with very fuzzy numbers here, the big picture is pretty clear: if all three of the players offered arbitration accepted, the Twins would be sitting at a payroll of at least $110 million before dealing with Capps, Hardy, and Thome. That would represent a tremendous jump in payroll, perhaps into the $120-$130 range if the Twins wanted to retain any of the aforementioned players.

While it may be unlikely that all three players will accept arbitration, the Twins have to be ready to write the checks before they make the offer. Given that exposure, the rationale behind not offering arbitration to Guerrier and Rauch becomes apparent. By allowing those players to become free agents, the Twins will be able to see how their arbitration cases play out, and then pursue relievers via free agency when their payroll situation is better known. Of course, the price for this certainty is paid for with potential draft picks.

The next step will be waiting to see how Pavano, Crain, and Hudson respond to the Twins offer. They have until November 30 to decide. Let the speculation begin.

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