Free Agency 2012: A Phillies-centric Overview

Ryan Madson figures to command a big contract this offseason, whether it's with the Phillies or another team. (Tony Tribble/AP)

We've officially arrived at the offseason. Starting Thursday, the 148 players who filed for free agency will be able to sign with any team in the majors. Until then, they may only negotiate with their own teams. It makes sense for most free agents to wait and hit the open market, where bidding between teams can quickly drive up their value. Ryan Madson is almost certain to do this. Jimmy Rollins has said his preference is to return to Philadelphia, and that he would sign a deal before hitting the open market if the Phillies offered him one that he liked. Still, odds are Rollins will be entertaining calls starting Thursday.

The baseball offseason can be a confusing time, so here is everything you need to know as it pertains to the Phillies.

1) Free agency

Important Dates: Nov. 3 - First day to sign free agents from other teams. Nov. 23 - Last day to offer salary arbitration to free agents in order to be eligible for compensation.

Key decisions: The Phillies are actually in a pretty good position with regards to their two marquee free agents, short stop Jimmy Rollins and set-up man/closer Ryan Madson. Both are locks to be Type A Free Agents, which means the Phillies will be eligible to be compensated with two draft picks if either one leaves town. Long story short, the Elias Sports Bureau uses a formula to assign a value to every player in the majors based on their performance over the previous two years. Every player above a certain threshold is a Type A player. Every player in the next threshold is  a Type B player. Teams that lose Type A players are eligible to be compensated with two draft picks. Type B players are worth one draft pick. 

If both Rollins and Madson leave, the Phillies could end up walking away from the offseason with two extra first round picks and two extra supplemental round picks (between the first and the second round). In order to be eligible for compensation, they will have to offer Rollins and/or Madson salary arbitration by Nov. 23. If the player accepts, he will essentially be agreeing to a one-year contract at a salary determined by an arbitrator (or agreed upon by the two sides ahead of tiem). Neither Rollins nor Madson would accept that offer, which would leave the Phillies in position to collect draft picks. Any team that signs a Type A free agent forfeits its highest eligible draft pick to the team that loses that free agent. The first 15 picks in the first round are ineligible to be forfeited, which is why the Phillies had to settle for Washington's second round pick as compensation for Jayson Werth last offseason. If a team signs two Type A free agents, its highest eligible pick goes to the team whose free agent had a higher Elias ranking, and it's next-highest to the next team, and so on.

It is a convoluted process, for sure. Complicating it further this offseason is the expiring Collective Bargaining Agreement, which runs through Dec. 11. The owners and the players are expected to reach an agreement before then, but free agent compensation is one issue that could change in the new CBA. At this point, it is likely that the current compensation system will remain in place through this offseason, since to do it any other way would be unfair.

Rollins and Madson are the only two players likely to receive arbitration offers. Brad Lidge could wind up as a Type B free agent, but the Phillies would not want to risk the closer accepting the arbitration, which would likely result in a huge salary for 2012. The risk is not worth the potential reward of one supplemental round draft pick, which is the compensation for Type B free agents.

2) The Trade Market

Key dates: Nov. 14-15 - General Managers' Meetings in Milwaukee; Dec. 5-8 - Winter Meetings in Dallas, Tex.

Key Decisions: With a weak class of free agents, you can't rule out the possibility of the Phillies looking to upgrade on the trade market. While they probably do not have the prospects to pull off another blockbuster deal, they could end up making some much-needed improvements to their bullpen and their bench via trade. A lot of talk ends up happening at the GM Meetings and Winter Meetings, although the events are not the swap meets they once were now that everybody is connected 24/7 by smart phones. Most major deals end up happening in early-to-late December. That's when the Roy Halladay trade went down a couple years ago.

3) The 40-Man Roster

Key dates: Dec. 1 - Last day to outright a player off the 40-man roster prior to the Rule 5 draft; Dec. 8 - Rule 5 Draft.

Key decisisons: The Phillies have been active participants in the Rule 5 draft. The last two seasons, they have kept their selection on the active roster for the entire season (David Herndon in 2010 and Michael Martinez in 2011). The draft is composed of minor league players who are not on their organization's 40-man roster. To be eligible, a player must have spent either 4 or 5 years in the minors: 4 years if he was signed at age 19 or older, 5 years if he was signed at age 18 or under. The Phillies have plenty of room on their 40 at the moment. Jiwan James and Tyson Gillies are two players who would be eligible for the Rule 5 draft, although neither is at a point where he is likely to stick with a major league team throughout the season (players who are selected in the Rule 5 must remain on their new club's active roster for the entire season or else be offered back to their original team). Relievers are always a threat to be taken, which is why current Arizona Fall League participant Jacob Diekman could merit some consideration for protection. First baseman Cody Overbeck is also a polished enough hitter that another team could want to take a look at him in spring training. B.J. Rosenberg and Tyler Cloyd are two other pitchers who could merit consideration for protection.

Another name to watch is Albert Cartwright, the second baseman whom the Phillies acquired in exchange for Sergio Escalona last January. Cartwright missed the entire season after rupturing his Achilles tendon but he is back competing in instructional leagues and could be a 40-man roster candidate.

4) Arbitration

Key Date: Dec. 12 - Last day to tender contracts to arbitration-eligible players.

This is different from the free agent arbitration we discussed earlier. The Phillies have several interesting decisions to make with regards to players under club control who are eligible for arbitration. Two of those players, Cole Hamels and Hunter Pence, are no-brainers to be offered arbitration. They will be expensive, and it would not surprise anybody if the Phillies worked out multi-year deals with both. But they have plenty of time to get that done. Offering them arbitration is simply the first step, and in these two cases it is a formality. Beyond that, though, the Phillies have some serious questions to answer about their 2012 roster. Topping the list is righthander Kyle Kendrick, who earned $2.45 million last season and should be in line for another substantial raise after a perhaps the best regular season of his career. Kendrick posted a 3.22 ERA in 15 starts and 19 relief appearances, logging 114 2/3 innings with 4.6 strikeouts-per-nine and 2.4 walks-per-nine. Kendrick's salary could eclipse $5 million this time around. The question is, how much is too much to pay for a guy who probably won't even start the season in the rotation if Joe Blanton is healthy? Kendrick showed this season that he is good insurance to have. He can bounce back and forth between the bullpen and the rotation. He can start on a moment's notice, or after a long layoff, and show little rust. He has never been injured. But $5 million is an expensive insurance policy. The Phillies could opt to non-tender him, which would make him a free agent. They could then try to bring him back at a lower salary. Or they could look elsewhere for pitching depth. The Phillies also have decisions to make on Ben Francisco, who is eligible for arbitration for the second time and is likely in line for a salary of $2 million or more, and utility man Wilson Valdez, who is eligible for arbitration for the first time.

5) In conclusion. . .

Those are all your offseason nuts and bolts. We'll take a deeper look at each of these aspects over the course of the next couple of weeks. In particular, we'll examine the various free agents who could offer upgrades for the Phillies as well as some potential trade targets.