Try a Little Tenderness

Today is the day when contracts are tendered to players on MLB Reserve Lists who are unsigned for 2009.

Any player who is "non-tendered" today immediately becomes an unrestricted free-agent, and is free to sign a major league or minor league contract with any MLB club, including the club that non-tendered the player. 

There are two types of unsigned players, so-called "arbitation-eligibles" (players who have accrued at least three years of MLB service time but less than six years, plus a handful of players who have between two and three years of MLB ST who qualify for arbitration as a "Super Two") and so-called "auto-renewals" (players who do not yet qualify for salary arbitration, so that the club can automatically renew the player's contract if an agreement cannot be reached by the first week of March).

"Auto-Renewal" players are almost always tendered contracts. The MLB minimum salary in 2009 will be $400K (up from $390K), and players must be offered at least the MLB minimum salary, and the salary offered must be no less than 80% of the player's 2008 salary.  .

The only time you might see a club non-tender an "auto-renewal" is if the player was injured in winter ball (injured players can't be outrighted after 11/20 or prior to 16 days prior to the start of the next season), or if the player's roster slot is needed to add a free-agent who signs sometime just prior to 12/12, or to clear a roster slot to make room for a player acquired in a trade during the Winter Meetings.

Since the Cubs roster presently stands at 37, there is no reason not to tender contracts to the Cubs 20 auto-renewal guys.

Aribtration-eligible players are a completely different matter, however. A club cannot automatically renew the contract of an arbitration-eligible player. If the player and the club cannot agree on a salary, the player and the club submit a number, and a three-person arbitration panel picks one of the two figures. Since youi never know what the arbitrators are going to do (they base everything on statistics, comparing the player to what other players with similar stats & service time are paid), clubs tend to view a hearing as a "crap shoot," and most GMs usually do not want to take a chance of losing in arbitration.

Jim Hendry has a history of tendering arbitration-eligible players, but he has never gone to arbitration with a player. The normal outcome is that the Cubs and the player will find a middle-ground between the player's request and the club's offer, and so thus a hearing is avoided. Hendry is always more than willing to offer performance bonuses to increase the value of a deal if the player feels the base salary is too low.   .

Arbitration-eligible players cannot be offered a base salary that is less than 80% of the player's previous year's salary, or less than 70% of the player's salary from two seasons ago (but if the player is non-tendered and then is re-signed, the maximum pay cut does NOT apply). So to know the minimum a player can get, you have to know the salary of each arbitration-eligible player from each of the last two seasons .

The Cubs have six players eligible for salary arbitration (2008 salary in parenthesis):

Ronny Cedeno ($407K)

Neal Cotts ($800K)

Chad Gaudin ($1.775M)

Kevin Gregg ($2.5M)

Reed Johnson ($2.07M - combined TOR and CUBS)

Michael Wuertz ($860K)

Reed Johnson made $2.17M in 2008 (a $870K severance when he was released by Toronto at the end of Spring Training and then a $1.3M salary from the Cubs), but he was paid $3.075M in 2007. Therefore, if Johnson is tendered, he cannot be paid less than 70% of his 2007 salary  ($2.07M). So if he is tendered (and he almost certainly will be), I would think the Cubs will offer somewhere around the minimum-allowable $2.1M and Johnson will request something like $3M, with the player and club settling for around $2.5M  And if the Cubs do settle with Johson prior to a hearing, the deal could be maybe $2.25M with up to $500K in incentives related to games played & plate appearances.    

Gregg was a closer for much of 2008 so he should get a bump because of his save numbers. Therefore, the biggest disparity among Cubs aribtration-eligibles will probably be with Kevin Gregg,.The Cubs will likely offer Gregg about $3.5M, and Gregg will probably want about $5.5M, with the player and club perhaps agreeing to a $4.5M pre-hearing figure, although if the Cubs and Gregg do agree prior to getting to arbitration, it will probably involve the Cubs offering a lower base salary ($3.75M) but with maybe $1.5M in incentives related to appearances and games finished. 

Chad Gaudin would probably get a bump up to at least $2.5M if his case were to make it to arbitration, but I would think the Cubs would not want to pay him anywhere near that much (guaranteed). I would bet the Cubs would prefer to offer Gaudin a relatively low base salary (about $1.5M, something close to the maximum allowable 20% cut) plus maybe another $1M in incentives based on appearances and/or games started (should he be moved to the starting rotation at some point). Since it is not clear if Gaudin would accept such a deal, he could get non-tendered, but with the Cubs hoping to re-sign him for less money after he becomes a free-agent (and good luck with that).      

Cedeno, Wuertz, and Cotts are fairly simple to estimate. Whether it goes to arbitration or is settled prior to that, Cedeno will likely get around $750K, and Wuertz and Cotts will probably end up with something like $1.25M, with Wuertz and Cotts both likely to receive up to $250K in incentives.   

Auto-renewal and aribtration-eligible players do not get guaranteed contracts, so they can get released during Spring Training.(as happened with Reed Johnson when he was with the Blue Jays last year)  A player who is released at least 16 days prior to Opening Day receives 1/6 of his 2009 salary (potential incentives not included) as severance, and if a player is released prior to Opening Day but less than 16 days prior to the start of the season, the player gets 1/4 of his salary as severance (potential incentives not included). So even if they are tendered, any or all of the Cubs six arbitration eligible players could get released during Spring Training and the Cubs could save some 2009 payroll that way (should that become necessary or if that is desirable).