With deadline approaching Monday, Reds face arbitration decisions

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Major League front offices face an important roster deadline on Monday. It’s the final date for clubs to offer contracts to unsigned players. In the case of the Reds, they confront tricky arbitration decisions on up to five players on the current 40-man roster. Here are the relevant rules, context and a discussion of those specific choices.

How MLB’s Arbitration System Works

The Collective Bargaining Agreement between MLB owners and the Player’s Association establishes a three-tier system for determining salaries. Players fall into one of the tiers based on their major league service time. As a player earns more service time and employment rights, his power to influence his salary increases.

Tier One | Pre-Arbitration

Players with fewer than three years of service time have no say in the determination of their salary. For those contracts, teams are bound only by the minimum set by the CBA. The minimum salary for 2020 will be $563,500. Reds players like Nick Senzel, Tyler Mahle and new acquisition Jose De Leon fall into that category.

Tier Two | Arbitration

Once a player accrues three years* of service time, he earns the right to salary arbitration. If the club and the player don’t reach a salary agreement by mid-January (this year the date is Jan. 10), they enter into a formal arbitration process. The club and the player exchange salary figures. A hearing in front of a panel of three federal arbitrators is scheduled for February. The sides can continue to negotiate right up until the start of the hearing. If they reach an agreement, the hearing is cancelled. That’s a common outcome. If the process reaches a hearing, the arbitrators listen to arguments from both sides and then, based on comparable players who have signed contracts in recent years, the panel selects either the player’s number or the club’s number. There is no compromise. Anthony DeSclafani and Curt Casali fall into this category.

*A small percentage of players with 2+ years of service time earn the right to an extra year of arbitration. They are referred to as Super Two players. Michael Lorenzen, Trevor Bauer and new acquisition Travis Jankowski fall into this category. Most players go through arbitration three times. Super Two players can go through the process four times.

Tier Three | Free Agency

After players accrue six years of service time, they become free agents, able to negotiate with any team. Pitcher Alex Wood became a free agent after 2019. DeSclafani will become one after 2020.

Monday’s Tender Deadline

Teams don’t have to make offers to players in Tier One or Tier Two who are not under contract. To release a player, the front office simply declines to make an offer (a “tender”). This Monday, Dec. 2 is the deadline for when teams have to offer a contract to their pre-arbitration and arbitration-eligible players for 2020. If a team chooses not to offer a contract, the player is considered “non-tendered” and assigned to the minor leagues if he has an option or, depending on the player’s seniority, can become a free agent. For example, last year the Reds declined to tender an arbitration offer to Billy Hamilton. He became a free agent and signed with the Kansas City Royals.

Reds Arbitration-Eligible Players

The following is an alphabetical list of players on the Reds 40-man roster who are eligible for arbitration in 2020. In parentheses is the year of arbitration they’ll be in this winter. For example (A3) means it’s the player’s third year of arbitration. The dollar amount is an estimate by MLBTR of what the salary will be based on comparable cases.

• Trevor Bauer (A4) – $18.6 million
• Matt Bowman (A2) – $900,000
• Curt Casali (A2) – $1.7 million
• Anthony DeSclafani (A3) – $5.2 million
• Kevin Gausman (A4) – $10.6 million
• Travis Jankowski (A2) – $2.75 million
• Michael Lorenzen (A3) – $4.2 million
• Jose Peraza (A2) – $3.6 million

Derek Dietrich is also eligible for arbitration and projected to earn about $3 million. The Reds have already non-tendered him. He was removed from the 40-man roster earlier this month. Dietrich cleared waivers (no other major league team picked him up, which would have meant agreeing to enter arbitration with him) and was assigned to the Reds AAA team. Dietrich has enough service time to refuse that assignment, which he did. He’s a free agent now. In theory, he could resign with the Reds.

The Reds front office faces similar decisions with the eight players on the list above. Obvious tender candidates are Trevor Bauer, Anthony DeSclafani and Michael Lorenzen. The other five players present less-than-obvious outcomes, for a variety of reasons. Let’s analyze them one at a time.

Matt Bowman | Probably Yes

Due to concerns over hand surgery, the St. Louis Cardinals non-tendered Bowman (28) after the 2018 season. The Reds claimed the right-handed reliever from the Cardinals off waivers. Manager David Bell was familiar with Bowman because of his time as bench coach in St. Louis. Bowman split the season in the Reds organization between AAA and the major league club. He made 27 appearances for the Reds in 2019, for a total of 32 innings. Bowman had a low strikeout rate an ended up with a 4.55 xFIP at the major league level. League average xFIP for NL relievers was 4.52.

While Bowman’s numbers weren’t great, what Bowman has going for him is the low salary projection. It’s barely more than league minimum. What he has going against him is that with a tender, the Reds would be committing to a major league contract and salary for him right now. They may choose to non-tender Bowman and hope to sign him to a minor league deal going into Spring Training. But if they think he has a decent chance of making the team, tendering him is low risk given how little money he’ll make.

Curt Casali | Probably Yes

In about 400 plate appearances over the past two seasons, Casali (31) has hit .268/.340/.427 for the Reds. He’s had modest, but positive defensive metrics. He knows the Reds pitchers. He was paid $950,000 last year. Casali is easily worth his estimated $1.7 million in salary.

If the Reds weren’t planning on upgrading the catching position — and maybe they aren’t — Casali would clearly be tendered. But if the Reds plan on bringing in a new catcher, and using Tucker Barnhart as the backup, there’s a case for not tendering Casali. Of course, the Reds might plan to keep Casali and trade Barnhart if they do acquire a new starting catcher.

Kevin Gausman | No, But Maybe a Multi-Year Deal

Working out Gausman’s 2020 salary will be tricky and may prove impossible. The Reds acquired Gausman (turns 29 in Jan.) from the Atlanta Braves off waivers in early August 2019. Gausman had been a starter through most of his career in Baltimore and Atlanta and was paid like it. Gausman pitched well for the Reds, but as a reliever: 3.10 ERA, 2.72 FIP, 2.42 xFIP, 33% strikeouts, 6% walks over 20.1 innings.

But Gausman’s arbitration estimate of $10-11 million is way more than the Reds will pay a reliever who isn’t an established closer. Gausman’s number is so high because he had a good season as a starter with the Orioles and his Super Two status bumped his arbitration-based 2019 salary to $9.4 million. The Collective Bargaining Agreement says players can’t receive more than a 20% cut in salary in any subsequent arbitration. There is no flexibility built into the CBA language to accommodate a player changing roles, say from a starting pitcher to reliever.

To circumvent that trap, the Reds and Gausman could reach an agreement prior to entering the arbitration process. The Reds could offer Gausman something like $8-9 million over two seasons. But Gausman may not be resigned to a bullpen fate. If he wants to be starter and continue to be compensated like one, he’d turn down a pre-arbitration offer, accept the non-tender and become a free agent. He could try to sign with another club that would use him as a starter.

Gausman might take a guaranteed two-year deal, maybe with a few incentives thrown in. If Gausman can repeat his 2019 performance as a reliever, he would help the Reds 2020 bullpen. But it would have to be at a reasonable price compared to other relievers on the market. This has to be worked out prior to Monday, otherwise Gausman can force an arbitration hearing and get paid.

Travis Jankowski |  Probably Yes, But It’s Not Clear Why

The Reds acquired Jankowski (28) from the San Diego Padres at the end of October for international cap space. After a decent 2018 season (91 wRC+) Jankowski missed three months of 2019 with a fractured left wrist. He struggled to hit at all after that. He spent most of the season with the Padres AAA team. Jankowski has one minor league option left, so the Reds can send him to AAA if they want. The Reds sought Jankowski for organizational depth. He is projected to earn $2.75 million in arbitration. Jankowski has no power. Zero. He has less power than Billy Hamilton. He will draw a walk.

It’s hard to see how committing to Jankowski now makes sense. Instead, the Reds should non-tender him and wait until Spring Training. After all the trades and free agent signings they’ll know if they still need a backup CF. $3 million seems like a lot to pay for a guy to stash in Louisville and hope you never have to break the glass on him. It’s hard to imagine they couldn’t find a better unsigned CF in March at about the same price if the need was there.

But the ink has hardly dried on Jankowski’s trade papers. The relevant variables haven’t materially changed since then. And the Reds made the effort to get him.

Jose Peraza | Probably No

Peraza presents the hardest choice for the Reds front office. He’s estimated to earn $3.6 million in arbitration. Peraza does have a minor league option left but will have to be paid a major league salary based on arbitration. After putting together a nice 2018 season offensively, Peraza (25) slumped badly in 2019. 207 players had at least 400 plate appearances last year (that’s about seven players per team). Of that group, Jose Peraza’s run production (wRC+) ranked #204. He remains plagued by soft hitting, ranking in the bottom 10% in average exit velocity and hard-hit%.

The Reds demoted Peraza at the end of August. While they did bring him back with expanded rosters in September, signs seemed clear. Given how 2019 finished, the Reds wouldn’t be planning on Peraza as their starting SS or 2B in 2020. His role would be as a utility bench player. But to put it bluntly, Peraza doesn’t offer the Reds anything more than Alex Blandino or Josh VanMeter. Blandino plays the same positions and Van Meter plays them all beside SS. Blandino and VanMeter are better defensively. Peraza looked lost in the OF last year.

Yes, he’s only 25. But Peraza has nearly 2000 major league plate appearances. It’s hard to admit the mistake and give up on the centerpiece return of the ill-fated Aroldis Chapman Todd Frazier trade. So maybe the Reds will give him another chance. On the other hand, cutting Peraza for Blandino or VanMeter would save $3 million.

[Featured image: https://twitter.com/Reds/status/1152990004995592192]