We've gotten a ton of questions about the Orioles' decision yesterday to not offer their "Type B" free agents -- Kevin Millwood and Koji Uehara -- arbitration, so I'm going to try and offer a better explanation for your Thanksgiving reading pleasure.
Before I do, I want to make one thing clear: I was surprised by the decision to not offer Uehara. I also don't agree with it. I'm simply attempting to explain what the Orioles were thinking when they made the move.
Let's tackle the Uehara decision first. It should, at least, be noted that Orioles president of baseball operations Andy MacPhail tried to enter a gentleman's agreement with Mark Pieper, Uehara's agent, where the reliever would have turned down arbitration if it was offered. That way, the Orioles would have gotten a supplemental pick after the first round of the 2011 draft had Uehara signed elsewhere.
Trevor Hoffman and Javier Vazquez entered in such an agreement with their 2010 clubs. Pieper and Uehara, however, weren't interested, and the reason is obvious. Uehara stands to make more money in 2011 had he accepted arbitration rather than signed a free-agent deal. The 35-year-old made $5 million last year, and there is no way an arbitrator would allow a pay cut after Uehara pitched to a 2.86 ERA in 43 appearances, saved 13 games, set a franchise record by not issuing a walk in 32 consecutive outings and led American League relievers in strikeout-to-walk ratio.
I don't care that Uehara had two more stints on the disabled list, giving him four in his two seasons with the Orioles. Pay cuts are rare, and a reliever who was dominant at times for the final three months of the season isn't going to get one. Instead, Uehara would have probably garnered between $6 million and $7 million in arbitration, a number that MacPhail simply was uncomfortable with because of Uehara's injury history.
Don't misunderstand: MacPhail very much wants Uehara back on the 2011 Orioles, probably even to serve as the team's closer. However, he wants him back on a one-year deal filled with incentives that will escalate if Uehara keeps taking the mound and staying off the disabled list.
There is also a sense that Uehara's first choice is return to the club. He loves the responsibility of closing, and there are few other teams beyond the Orioles with openings in that role. He likes his teammates and the city, enjoying privacy that was especially elusive when he played in Japan. His son, who is picking up the English language, is enrolled in school in Baltimore.
So I gather the Orioles feel like they will re-sign him anyway. Had they felt Uehara would get a multiyear deal elsewhere, I assume offering him arbitration would have been a slam dunk. But MacPhail has certainly put added pressure on himself to resign Uehara. If he can't, the Orioles will not only be without their closer, but they won't get a draft pick either.
Now to Millwood, a situation that is much clearer. The veteran starter made $12 million last season. While he may not have gotten that much for next year had he gone to arbitration, he would certainly have received a figure that would far exceed what he'll get in free agency.
The maximum 20 percent salary reduction does not apply to free agents, so the Orioles could ask an arbitrator to trim his salary as much as they pleased. However, as I said above in talking about Uehara, significant pay cuts are extremely rare just for practical matters.
Sure, the Orioles could fixate on Millwood's 4-16 record and his 5.10 ERA. They can bring up the fact that the right-hander was among the league leaders in earned runs, homers and hits allowed.
Millwood is represented by super agent Scott Boras, who would undoubtedly point out how the pitcher pretty much served the exact purpose for which he was acquired. He ate innings, logging 190 2/3, the second-highest total on the club. He was one of the stingiest pitchers in the AL for the first couple of months, and he got some of the worst run support in baseball.
You get the point. The Orioles still would have to offer him a significant amount of money -- an executive from another club estimated about $8 million -- to win the arbitration hearing against Millwood. An arbitrator simply wouldn't allow a 50 percent or more pay cut for a pitcher of Millwood's stature.
It was much too risky for the Orioles to offer Millwood arbitration, though I don't believe the same can be said for Uehara.
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