Try a Little Non-Tenderness
12/2 UPDATE #2: Mark Gonzales at the Chicago Tribune is reporting that the Cubs have signed arbitration-eligible LHP Clayton Richard to a 2016 contract ($2M salary), and have non-tendered RHRP Ryan Cook and LHRP Jack Leathersich. The Cubs claimed both Cook and Leathersich off waivers last month, Cook from the Boston Red Sox and Leathersich from the New York Mets.
The other twenty unsigned players on the Cubs MLB 40-man roster were apparently tendered 2016 contracts, and six of the twenty (RHSP Jake Arrieta, OF-IF Chris Coghlan, RHRP Justin Grimm, RHRP Hector Rondon, RHRP Pedro Strop, and LHP Travis Wood) will be eligible for salary arbitration if the player is not satisfied with the club's salary offer.
Cook was eligible for salary arbitration for the second time and was projected to get about $1.5M for 2016 (he was paid $1.4M in 2015), and the Cubs may not have wanted to pay him that much if he is expected to spend most of the year as "bullpen injury insurance" at AAA Iowa. So the Cubs could possibly re-sign Cook to a major league contract with a minimal base salary (perhaps $750K) plus a performance bonus based on days spent on the MLB 25-man roster in 2016 (something they could not do if he was tendered), or they could sign him to a 2016 minor league contract with an NRI to Spring Training. Whether Cook would agree to such an arrangement remains to be seen, but the Cubs might not have non-tendered Cook if they didn't already have a 2016 deal in place.
Leathetsich is not yet eligible for salary arbitration, but he could not be outrighted to the minors during the off-season (after 11/20) because he is injured (July TJS), so non-tendering him and then re-signing him to a 2016 minor league contract is the only way the Cubs can remove Leathersich from their MLB 40-man roster but still keep him under club control. Of course the Cubs could have simply waited until the start of Spring Training and then placed Leathersich on the 60-day DL (thus removing him from the 40-man roster), so it would appear that the Cubs believe they will need his roster slot on the 40 before then. It remains to be seen if Leathersich will sign a minor league contract with the Cubs, but (as with Cook) the Cubs probably would not have non-tendered him if they did not already have a pre-arranged minor league deal in place.
So the Cubs MLB Reserve List (AKA "40-man roster") now stands at 36, with four slots left open for free-agents who might be signed over the next few days and weeks, off-season waiver claims, or perhaps even a Rule 5 Draft pick.
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12/2 UPDATE #1: Jon Heyman at CBS Sports reports that the Cubs have signed LHRP Rex Brothers to a 2016 contract ($1.42M salary). Brothers was paid $1.4M in 2015, and would have been arbitration-eligible for the second time post-2015. He was acquired by the Cubs from the Colorado Rockies for minor league LHSP Wander Cabrera last month.
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Tomorrow (Wednesday December 2nd) is the deadline for MLB clubs to tender 2016 major league contracts to unsigned players on the club's MLB Reserve List (AKA "40-man roster").
If an unsigned player is not tendered a contract on December 2nd (or December 1st if December 2nd falls on a Saturday, or November 30th if December 2nd falls on a Sunday), the player is said to be "Non-Tendered," he is immediately removed from his club's MLB 40-man roster, and he becomes an unrestricted free-agent, free to sign a major league or minor league contract with any club, including the club that non-tendered the player. A "Non-Tendered" player receives no termination pay, and the player's former club receives no compensation if the player subsequently signs with another club.
Each unsigned player on an MLB 40-man roster who is tendered a contract must be offered at least the MLB minimum salary ($507,500 in 2016) and (with a couple of exceptions) at least 80% of the player's previous season's salary, and at least 70% of the player's salary from two seasons back.
Some players have a "minor league split" salary in their contract which they are paid if they are sent to the minors. In most cases, a player's minor league "split" salary must be at least 60% of the player's salary from the previous season. The one exception is if a free-agent signs a major league contract with a minor league "split" salary, the "60% rule" does not apply
The minor league "split" minimum salary in 2016 is $41,400 for players with no MLB Service Time who are on an MLB 40-man roster for the first time (like Andury Acevedo, Jeimer Candelario, Willson Contreras, Pierce Johnson, and Dan Vogelbach), with $82,700 the minimum minor league "split" salary for all other players.
An unsigned player under club control who has accrued at least three but less than six years of MLB Service Time is automatically eligible for salary arbitration.
Also, any unsigned player with at least two years but less than three years of MLB Service Time who accrued at least 86 days of MLB Service Time the previous season can qualify for salary arbitration as a so-called "Super Two" if the player is among the top 22% in MLB Service Time of players in that group.
CUBS UNSIGNED SALARY ARBITRATION ELIGIBLE PLAYERS (last updated 11-25-2015):
Jake Arrieta, RHP
Rex Brothers, LHP
Chris Coghlan, OF
Ryan Cook, RHP
Justin Grimm, RHP (“Super Two”)
Clayton Richard, LHP
Hector Rondon, RHP
Pedro Strop, RHP
Travis Wood, LHP
If a club and a player eligible for salary arbitration cannot agree on a contract, the player can request the Major League Baseball Players Association (MLBPA) to file for salary arbitration. The MLBPA is responsible for delivering all requests for salary arbitration to the MLB Labor Relations Department (MLB LRD) on the Tuesday immediately prior to the third Friday in January;
NOTE: Clubs do NOT offer salary arbitration to arbitration-eligible players. It's up to the player to file for salary arbitration, if the club and the player cannot agree on a contract by the mid-January filing date.
Once salary arbitration has been requested, the player submits his desired salary to the MLBPA, the club submits its salary offer to the MLB LRD, and the MLBPA and MLB LRD exchange the two figures on the third Friday in January. The MLBPA and MLB LRD then schedule a hearing with a three-person arbitration panel. Hearings are held on various dates during the first three weeks of February.
The club's offer must be at least the MLB minimum salary, and, in most cases, must be at least 80% of the player's previous year's salary and at least 70% of the player's salary from two seasons back. However, if the player received a raise in excess of 50% by a salary arbitration panel the previous season, a 20% maximum salary reduction from the previous season and a 30% maximum salary reduction from two seasons back does not apply, and the club only has to offer at least the MLB minimum salary.
After arbitration has been requested, the player and the club can continue to negotiate back & forth, and the player can withdraw from the process any time up until the hearing. And in fact this frequently happens, as the player and the club will often agree to just "split the difference" (something the panel cannot do). If the matter does go to a hearing, the arbitration panel must choose either the club's offer or the player's figure.
Win or lose, the player is awarded a standard one-year MLB contract with no "minor league split" salary or incentive/performance bonuses. Also, the contract is not guaranteed, so if the player is released during Spring Training, the club would only owe the player 30 days or 45 days salary as termination pay, depending on when the player is released. (A player on an MLB 40-man roster receives 100% of what remains of his salary if he is released during the regular season).
NOTE: The Major League Baseball Players Association (MLBPA) is very sensitive about salary arbitration, so if a player is victorious at an arbitration hearing and is awarded a contract by an arbitration panel and then is subsequently released by his club prior to or during Spring Training, the MLBPA will almost always file a grievance on behalf of the player, claiming the player was released for economic reasons only (which is not permitted), and asking that the released player receive 100% of his salary as termination pay. In that situation, a club would have to show (by submitting official Spring Training game stats) that the released player was out-performed in Spring Training games by another player (or players) competing for that roster spot.
An unsigned player under club control who does not yet qualify for salary arbitration ultimately has to either accept the club's offer or just not play. A club will negotiate with the player up to a point, but if the player has not signed a contract for the current season by March 1st, the club has the right to unilaterally dictate the player's salary and renew the player's contract from the previous season (albeit for an amount not less than the MLB minimum salary, and not less than 80% of the player's salary from the previous season and not less than 70% of the player's salary from two season's back).
These players are the ones who have a "minor league split" salary in their contract, which the player is paid if he is sent to the minors.
CUBS UNSIGNED AUTO-RENEWAL (PRE-ARBITRATION) PLAYERS (last updated 11-20-2015):
Arismendy Alcantara, INF
Javy Baez, INF
Dallas Beeler, RHP
Kris Bryant, INF
Jeimer Candelario, INF
Willson Contreras, C
Carl Edwards Jr, RHP
Kyle Hendricks, RHP
Pierce Johnson, RHP
Eric Jokisch, LHP
Tommy LaStella, INF
Jack Leathersich, LHP
Yoervis Medina, RHP
Spencer Patton, RHP
Neil Ramirez, RHP
Zac Rosscup, LHP
Addison Russell, INF
Kyle Schwarber, C
Matt Szczur, OF
Christian Villanueva, INF
Dan Vogelbach, 1B
While a club could sign a player prior to the contract tender deadline, in practice clubs usually wait until the contract tender deadline to offer contracts to its unsigned players.
The most common reason for a club to consider non-tendering a player is when the player is eligible for salary arbitration. If the club tenders a contract to an arbitration-eligible player, the club takes the chance that the player will later file for salary arbitration, and that the club could lose in an aribtration hearing. And one thing clubs love is cost certainty, and you just never know (in advance) how an arbitration panel might rule.
The club might choose to non-tender an arbitration-eligible player with the idea that they can instead sign the player for less money than the player is expected to receive via the arbitration process, but for this to work, the club and the player have to agree (in advance) to a contract prior to the player being non-tendered, because otherwise the player could just say "no" to the offer and force the club to either take the chance that the player might subsequently file for salary arbitration if he is tendered, or that the player will sign elsewhere if he is non-tendered, with the club getting nothing in rerurn for losing the player.
For example, Travis Wood made $5.685M in 2015, and is projected to make about $6.5M in 2016 (his last year of salary arbitration eligibility). But the Cubs may not feel that Wood is worth $6.5M to perform the function he serves on this particular Cub team (a versatile "rubber-armed" reliever who can be used in long relief, middle relief, as a set-up man, or even as a closer in a pinch). That role might be worth $4M (plus some additional potential performance bonuses based on appearances, GF, and/or GS), but it might not be worth $6.5M. For the Cubs to non-tender him and then sign him to such a contract, Wood would have to agree to the deal (in advance), and he might not be inclined to do that. Maybe if the Cubs offer a two or three-year deal (3/$12M with performance bonuses)? Perhaps.
Sometimes the club wants to remove a player from its MLB 40-man roster without having to expose the player to Outright Assignment Waivers (which are irrevocable). This can be done one time (and one time only) during the year, and that's on December 2nd, and it's done by non-tendering the player, and then re-signing him to a pre-arranged minor league contract (sometimes for even more money than he would have gotten if he had remained on the 40-man roster) plus an NRI to Spring Training. The Cubs might like to do that with players who will be out of minor league options in 2016, like RHRP Yoervis Medina, 3B Christian Villanueva, and/or OF Matt Szczur.
But for that plan to work, the player must agree (in advance) to the offer, and if the player signs a minor league contract after being non-tendered, the player becomes eligible for selection in the Rule 5 Draft. And if the club and the player conspire to wait to sign the pre-arranged minor league contract until after the conclusion of the Rule 5 Draft, that could be construed as "covering up" the player from selection (which is not permitted), and the Commissiner could take disciplinary action against the club (like voiding the contract and prohibiting the club from re-signing the player).
Also, sometimes a club wants to retain a player on its MLB 40-man roster, but wants to cut the player's salary more than the allowable 20%. The only way that can be done is by non-tendering the player, and then re-signing the player (who is now technically a free-agent) to a contract with a salary below what the club could have offered if the player had been tendered.
For example, the Cubs might want to retain recently acquired RHRP Ryan Cook (claimed off waivers from the Boston Red Sox last month), but they don't want to pay him as much as he could possibly get in arbitration. (Cook made $1.4M in 2015, and even if he is cut the maximum 20%, he still would get $1.12M in 2016). So to retain Cook at a more-reasonable price, the Cubs might want to sign him to a contract with maybe a $750K base salary, plus another $750K in performance bonuses (potentially equaling $1.5M). But to do that, the Cubs would have to first non-tender Cook, and then re-sign him to a 2016 major league contract with a lower base salary (plus performance bonuses) than he would have received if he had been tendered.
In each of these cases, a club opts to non-tender a player that it actually does not wish to lose, with the idea that the player will re-sign after being non-tendered. But in each case, the player (and his agent) must be agreeable to the plan, so that if the player is non-tendered, he does not take the opportunity to shop himself in the open market, with the possibility that the player could sign elsewhere, with the club losing the player and getting nothing back in return.
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