"I'm sitting at this table called love, staring down at the irony of life,
How come we've reached this fork in the road, and yet it cuts like a knife?"
-Flight of the Conchords, Not Crying
The Dodgers, as we all know, are anchored by a young corps of young players. Young players are the lifeblood of an organization, not only because of the advantage of producing your own talent, but also because these young players are relatively cheap. The Dodgers are about to come to their fork in the road with some of these young players.
Per terms of the collective bargaining agreement between MLB clubs and its players, players are under team control until the player accumulates at least six full years of service time. For the first three years of major league service, players have essentially no rights; they can have their contracts simply renewed by the club at whatever the club sees fit, usually within reasonable distance of the MLB minimum salary ($400,000 in 2009 and 2010).
After three years of service, players are eligible for salary arbitration. If both sides can't agree on a contract, they each submit a salary and present their cases to an arbitration panel. The panel then simply picks a winner. In 2007, the Dodgers couldn't come to a contract agreement with arbitration-eligible Joe Beimel so they went to an arbitration hearing. Beimel asked for $1,250,000, and the Dodgers countered with a salary of $912,500. The Dodgers presented a more compelling argument, won the case, and Beimel earned $912,500 in 2007.
A nice little quirk of the arbitration process is the group known as "Super Twos." These are players in the top 17% of service time among those with more than two years but less than three years service time. Instead of getting three years of arbitration, these players are eligible for four years (essentially their third through sixth season). Andre Ethier (2 years, 153 days service time) and Russell Martin (2 years, 150 days) are the Dodgers' Super Twos this offseason.
Phillies' ace Cole Hamels, who beat the Dodgers twice in last year's NLCS, is also a "Super Two," and just signed a three-year contract extension for a total of $20.5 million:
2009 - $4,350,000
2010 - $6,650,000
2011 - $9,500,000
Hamels, who has two years, 143 days of service time, struck while the iron was hot, coming off of his 5-win postseason. He tied Dontrelle Willis (2006) for highest pitcher salary with less than 3 years service time. However, from a Dodger perspective, Hamels looks awfully similar to our own young ace, Chad Billingsley:
The Hamels contract is a nice rubric for the Dodgers if they are looking to sign Billingsley to a long-term deal, at least through his arbitration years. Billingsley is not a "Super Two," as he has just 2 years, 110 days service time, so his 2009 will not be as lucrative as that of Mr. Hamels.
The player with the least amount of service time that qualified as a Super Two was Jered Weaver of the Angels. Weaver's 2 years, 129 days service time narrowly edged the Blue Jays' Shaun Marcum, whose 2 years, 128 days didn't net him "Super Two" status. Weaver was called up to the Angels on May 26, 2006, so his service clock started a mere 19 days earlier than Billingsley's.
One would hope that baseball decisions are the main determinant of whether or not to call up a young player, but the fact remains that delaying the callup of a young player by merely a week or three can have a significant financial impact down the road. Billingsley stands to make around $500,000 this season, instead of potentially $4 million were he called up a mere 19 days earlier in 2006. Similarly, Clayton Kershaw by my unofficial count accumulated 105 days of service time in 2008. He was optioned to the minor leagues on July 2, and got called up after the all-star break 20 days later. With those extra 20 days, Kershaw would be much, much closer to perhaps the vaunted "Super Two" status after 2010.
The Dodgers have some important decisions regarding their young players coming very soon. Do they take a risk trying to save money by signing these players to long-term deals now, hoping the players will (a) want the security of a long-term deal, and (b) continue to improve above and beyond their salary? In the immediate future, salary arbitration figures for 2009 must be submitted by Tuesday. In two days, for Russell Martin, Andre Ethier, Jonathan Broxton, Jason Repko, and the Dodgers, it's Business Time.
Be sure to catch the first episode of season two of Flight of the Conchords Sunday at 10pm on HBO, or just watch it online here.