The deadline for the Phillies to offer salary arbitration to free agents is midnight Wednesday with the motivation being that a team is compensated with draft picks should their player sign elsewhere.
This rule impacts Type A free agents Ryan Madson, Jimmy Rollins and Roy Oswalt.
Thanks to the new collective bargaining agreement, which was announced by baseball Tuesday, the rules of the game have changed and become somewhat convoluted. According to a baseball source, the Phillies will still receive a first-round draft pick and a compensatory pick for Madson provided they offer him salary arbitration.
According to the source, the Phillies would receive the first-round pick directly in front of the team that signed Madson. The team that signs Madson will still keep its first-round pick and select immediately after the Phillies.
For example, if Madson signs with the Los Angeles Angels of Anaheim, which is a definite possibility, the Phillies would pick 18th overall and the Angels would make their selection immediately after. The position is subject to change based on other free-agent signings. The Phillies will also get a compensatory pick for Madson after the first round.
Knowing that a first-round pick awaits them, the Phillies will certainly offer Madson salary arbitration without fear of him accepting it. Even if he did accept it, he would probably only get around $7 or $8 million after making $4.5 million last season. At that point, the Phillies could keep him or trade him. The most likely scenario is that Madson gets a multi-year deal worth much more as a free agent and the Phillies get a first-round pick.
The Phillies lost their first-round pick, currently the 31st overall selection, when they signed Type A free agent Jonathan Papelbon. The team will not retain that pick, but will receive two compensatory picks for Papelbon.
The baseball source said the rules this year have not changed for a number of Type A free agents, including Rollins and Oswalt. Should the Phillies offer arbitration to Rollins and Oswalt, they would be compensated with a first-round pick and a compensatory pick for each player. The source said that the team that signs them would lose their first-round picks.
That does not mean the Phillies are going to offer arbitration to both players. It's highly unlikely, in fact, that the Phillies offer salary arbitration to Oswalt because he made $16 million last season and would receive a raise in the arbitration process.
Rollins, on the other hand, is likely to be offered salary arbitration and the Phillies would be more than happy if he accepted a one-year deal even if it meant a substantial raise over the $8.5 million he made last season. The Phillies' preference is to re-sign Rollins.
Starting next year, the free-agent compensation rules will be entirely different.
According to mlbtraderumors.com, the new rules read like this: "Free agents will cost compensatory draft picks if their former clubs offer guaranteed one-year deals with an average salary that matches or exceeds the average salary of the 125 highest-paid players from the previous season. The offer must be made at the end of the five-day free agent “quiet period,” and the player will have seven days to accept," according to the CBA."
"Teams that sign players who have been offered these lucrative one-year salaries will surrender their first-round draft choice. However, teams with top-ten picks will give up their second-highest pick instead."