Economy model

Jeff Passan
Yahoo! Sports

Adam Dunn was not offered arbitration Sunday night. Neither was Pat Burrell nor Bobby Abreu. And as pangs of indignation resonated among the fan bases of the players' former teams – but, but, but, we could have had two draft picks! – general managers around baseball nodded solemnly at their new reality.

"It's very simple," said one American League front-office man. "What we've grown accustomed to the last few years is not realistic anymore."

The economy is finally thwacking baseball, the $6.5 billion forever free-spending industry, to the point that teams can no longer risk offering their free agents arbitration for fear they might actually accept it.

The market, agents and executives have indicated the past few weeks, is especially dire for corner outfielders, proven when Arizona, Philadelphia and the New York Yankees said sayonara to their Type A free agents. Had the teams offered arbitration to Dunn, Burrell and Abreu, and had the players declined it by the 11:59 p.m. ET deadline Sunday and eventually signed elsewhere, the original teams would have reaped a pair of compensatory draft choices next June.

For players deemed Type A – generally, the best of the best in a free-agent class – teams that lose arbitration-offered players receive a first-round draft pick of teams that select 16th through 30th, or the second-round pick of the teams that choose first through 15th. They also get a "sandwich pick" between the first and second rounds. Type B free agents bring a sandwich pick, with no penalty for the team that signs them.

The palatability of the Diamondbacks' acquiring Dunn from Cincinnati in August came from the notion that Arizona would receive two draft choices, because in the past arbitration was a formality for players of his caliber.

Now, though, with advertising reps reporting back to their bosses that sales are hard to come by and teams cringing at the notion of fans' disposable income shriveling like a raisin, arbitration is a risk. In the process, the team and player either come to an agreed-upon salary – usually more than the previous season – or each side picks a number and allows an impartial arbitrator to choose the player's salary.

Abreu, for example, made $16 million last season. Though his numbers have declined, he would stand to make about $17 million through arbitration. And while that was a fair amount in the past, even New York couldn't stomach it this year.

The Yankees scrimping. This really is a recession.

If the parked-in-neutral free-agent market hasn't been enough of a sign that fear is pervading this offseason, perhaps the declining of Dunn, Burrell and Abreu, not to mention Kerry Wood and Jamie Moyer is the big, red stamp.

"People are scared," the AL executive said. "You're going to see this for the rest of the winter. CC (Sabathia) is going to get his money and so is (Mark) Teixiera and a couple other guys. Aside from that, though? It's lean."

How the offseason shakes out will have a lasting impact not just in baseball, but across other professional sports. Baseball is setting the baseline as to how a sport handles declining advertising, wobbly ticket sales and other anxieties. The players' union, on the other hand, must differentiate between owners conspiring to use the economy as an excuse to neuter salaries and the realities of the Dow nearly halving from its peak and tantamount wealth vanishing with it.

It's a confusing time. One filled with but, but, buts.

Other arbitration notes …

• Boston did offer Jason Varitek arbitration, an indication that a) the trade market for everyday, ready-to-play catchers isn't exactly tickling their fancy and b) the idea of springing for a $10 million-or-so salary for one year is agreeable. If a team that does need a catcher decides to spring on a multi-year deal for Varitek, who turns 37 in April, the Red Sox will get a pair of draft picks. And they've been as good as any team at turning those picks into gold.

Varitek can't be thrilled at being offered arbitration because the number of teams interested in signing him probably shrunk now that doing so would cost two draft picks.

• An NL assistant GM last week posited that teams in the middle of the country are likeliest to get hammered by the recession, and two have shown that already. The Astros offering arbitration to neither Type A Doug Brocail – who they later signed for a below-market $2.5 million – nor Type B free agent Randy Wolf proved that owner Drayton McLane is making the offseason eminently difficult for GM Ed Wade. By forgoing the Type A rights to Russ Springer as well as the Type B Braden Looper, St. Louis, too, signaled that its purse strings are too tight to take any sort of chance, even though rival executives expected both players to be offered arbitration.

• OK, so Arizona doesn't want to get stuck with Adam Dunn next season at the $15 million or so he'd get through arbitration. Fine. It's a short-sighted maneuver not to offer arbitration – he's bound to get a multi-year deal somewhere – but with the Diamondbacks offering arbitration to Orlando Hudson, Juan Cruz and Brandon Lyon, one scouting director wondered whether it was to avoid a glut of draft choices and the signing bonuses that accompany them.

While two sources dismissed the idea, one pointed out that with Dunn, Hudson and Cruz all Type A players likely to sign elsewhere, it would have left the Diamondbacks with seven high picks, including their own first-rounder, and eight if Lyon doesn't accept arbitration. According to Baseball America, Arizona spent only $4.49 million on its draft choices last season, the seventh-lowest number in the game.

Still, the specter of high draft picks, which most teams consider extremely valuable, did not scare off the Brewers or Dodgers. Each is in position to have six top picks if they cannot re-sign their eligible free agents, all of whom are unlikely to accept arbitration.

• The final list of players who were offered arbitration, by position, with the type and team in parentheses:

Starting pitcher: A.J. Burnett (A, Blue Jays), Paul Byrd (B, Red Sox), Jon Garland (B, Angels), Derek Lowe (A, Dodgers), Oliver Perez (A, Mets), CC Sabathia (A, Brewers), Ben Sheets (A, Brewers)

Relief pitcher: Juan Cruz (A, Diamondbacks), Brian Fuentes (A, Rockies), Brandon Lyon (B, Diamondbacks), Darren Oliver (A, Angels), Dennys Reyes (B, Twins), Francisco Rodriguez (A, Angels), Brian Shouse (B, Brewers), David Weathers (B, Reds)

First base: Mark Teixeira (A, Angels)

Second base: Mark Grudzielanek (B, Royals), Orlando Hudson (A, Diamondbacks)

Shortstop: Orlando Cabrera (A, White Sox)

Third base: Casey Blake (B, Dodgers)

Outfield: Raul Ibanez (A, Mariners), Manny Ramirez (A, Dodgers)

Catcher: Jason Varitek (A, Red Sox)

DH: Milton Bradley (B, Rangers)

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