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After Will Ohman was put on the disabled list, it seemed logical that Blake Dewitt would get recalled from AAA Albuquerque. Instead, A.J. Ellis got the call, putting three catchers on the 25-man roster. One reason for this is probably that the Dodgers don't want to take away at bats from Dewitt. But another reaason could be the salary arbitration savings if Dewitt were to remain on the major league club.  Arbitration was the process by which Russell Martin, Andre Ethier, and Jonathan Broxton all saw huge jumps in their pay during this last offseason.

When a player gets called up to the majors, their service time clock begins to run. Once they have six years of service time in the major leagues, they can become a free agent. Of course, if they get sent back to the minors, the clock stops for the time being. For a player's first three years in the majors they make the major league minimum salary (or close to it), but once they have three years of service time they can file for arbitration and thereby increase their salary. For the next three years their salary jumps until they finally reach free agency. There is also Super Two eligibility, which grants players in the top 17% of service time under three years arbitration as well. These players get four years of arbitration instead of three.  A full season of service is 172 days, and players with 2 years of service and close to 3 years end up getting Super Two status. This nearly always ends up being players with 2 years and 130 days of service or more.

At this point in the season, we are just passing the point where there is no longer 130 days left in the season. This means that teams can call up their top prospects and not fear that they will get Super Two status, giving them an extra year of arbitration and consequently costing the team millions of dollars. We've seen Matt Weiters, the Orioles top catching prospect finally got called up, and this was the reason why. In the next few weeks we can expect to see a few other top prospects called up as teams now know they can get three years of service at the minimum salary out of them.

Which brings us to Blake Dewitt. Dewitt ended last year with 150 days of service and has been in the major leagues for 25 days so far this year, so he currently has 1 year and 3 days of service time. There are currently 126 days left in the season, so today marks the first time that Dewitt can be called up and remain indefinitely in the major leagues without likely qualifying for Super Two Status (he would only end up with 1 year and 129 days of service). This means that Dewitt will not be arbitration eligible until at least the 2012 season. It may not matter much right now, but he could end up being a starter as soon as next year. It would be nice to have a starter making the minimum as other young Dodgers see their salaries increase.

Russell Martin, Andre Ethier, and Jonathan Broxton will all be arbitration eligible again next year. On top of that, Chad Billingsley, Matt Kemp, James Loney, and Hong-Chih Kuo will all be eligible for arbitration for the first time in their careers. All these pay increases will probably add $15-20 million onto the Dodger payroll, making up for the expiring contracts of Jason Schmidt, Randy Wolf, Guillermo Mota, etc. Luckily, these young players are all still under team control for three more years (with the exception of Broxton, who is only under control for two). It will be important to start locking up some of them to long term deals in the near future, both for the payroll relief and to ensure that we are able to keep most of them.

The next wave of players is in the same boat as Blake Dewitt, they'll have at least one year of service time after 2009 but won't end up receiving Super Two status. This includes Dewitt, Clayton Kershaw, Ramon Troncoso, and Ronald Belisario. These players will make the major league minimum until 2012.

After them there are tweeners like James McDonald (67 days of service), Chin-lung Hu (131 days), Scott Elbert (44 days), Brent Leach (31 days), Xavier Paul (26 days), and Jaime Hoffmann (11 days). The last four in the group would need to stay up for most of the rest of the year just to get to one year of service time. So they will likely make the league minimum salary for at least four more years. James McDonald could end up with a year of service time, but his recent demotion to the minors makes it unlikely. Chin-lung Hu would just need to get called up before September.

Finally we have the players who have not yet been called up to the majors but could end up being important pieces of the Dodgers' future, players like Josh Lindblom, Ivan Dejesus, and Andrew Lambo. All of these players could be called up for the rest of the year and stick with the major league club and still not be arbitration eligible until 2013. In the event that they are not in the majors full time next year it could be even longer until they get to arbitration. All of these players can be safely called up at this point without having to worry about them wasting their cost controlled years. Of course, with the team rolling right now it's better to having them honing their skills in the minors anyway.

Here is the payroll, through 2011.

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Jon Lester has signed a 5-year extension with the Red Sox for a total of $30 million, and a club option year for $13 million in 2014.  Per Jeff Passan of Yahoo! Sports:

The deal is contingent on Lester passing a physical Tuesday. The impending deal is the largest given to a pitcher with around two years of service time, doubling the four-year, $15 million deal Cleveland’s Fausto Carmona signed at the beginning of last season. If the Red Sox exercise the option, they will have kept Lester off the free-agent market for two years.

The Red Sox have been locking up their young stars this offseason, signing Dustin Pedroia, Kevin Youkilis, and Lester to contracts that bought out at least two years of free agency.  This is something the Dodgers need to seriously consider, and soon.

Let's compare Lester with Dodgers' ace Chad Billingsley:

*Age is as of June 30, 2009

Billingsley more than holds his own compared to Lester.  Billingsley is even comparable to Cole Hamels of the Phillies, who also signed an extension this offseason.  However, Hamels' "Super Two" status blurs the comparison somewhat.  Jon Lester, in the same service class as Billingsley, is as close a comparable player to Billingsley as you will find.

There are no details of Lester's contract as of yet, but this is clearly a good rubrick for Billingsley's multi-year deal with the Dodgers, whenever that may be. Think about this:  if the Dodgers had signed Billingsley to a long-term deal after 2007, he may have received something similar to what Ubaldo Jimenez signed for with the Rockies earlier this offseason.  Comparing the two at similar service times:

Jimenez signed with Colorado for 4 years, $10 million, with two club option years that could take him through one year of free agency, and bring the total value of the deal to 6 years, $22.75 million. 

Removing the first year of the deal for Jimenez, his final five years of his deal -- his 3rd through 7th year -- could be worth $22 million.

Lester's five-year deal -- also through his 3rd through 7th year -- is worth $30 million.  That doesn't even include the $13 million option for 2014, which is sure to be below market value for a top flight starter like Lester, or Billingsley.

Basically, by waiting a year to lock up Billingsley, the market for his services has gone up about 36%.  We all know Billingsley is one of the best pitchers in baseball, even if the rest of the world hasn't recognized it yet.  It's time for the Dodgers to capitalize on this information gap and sign Billingsley before he gets even more expensive.

The sooner the Dodgers get a long-term deal done with Billingsley, and all of their young talent, the better.

UPDATED 3/8/09 3:42pm -- Ervin Santana's contract signed earlier this offseason is four years, $30 million, and takes him through his first free agent year plus a $13 million option for his second free agent year, just like Lester.  Santana has one more year of service time than both Billingsley and Lester, but is still comparable. 

Billingsley has a good chance to catch Santana in wins, and will certainly have a better ERA+, albeit in less innings.  It seems clear the market for the next five years of a pitcher of Chad Billingsley's caliber is roughly $30 million.

As Eric shows in his payroll worksheet  the Dodger payroll is currently at  $87 Million. With the Dodger deferred contract details now public knowledge it looks like the Dodgers tried to add Manny to the payroll while keeping the payroll a tad under $100 Million.

Is $100 Million the new benchmark? Dodger fans have to find it curious that the Dodgers didn't accept the counter offer of Boras/Manny of the same money over two years but with none of it deferred. You would have thought they'd have accepted it instantly. It is certainly a reasonable offer and one would think with good reason, the only thing holding the Dodgers back from accepting it is the possible  Dodgers inability to meet that payroll in 2009 at that level.

I'm not privy to the Dodger finances so maybe after five years of running the team they have found that $100 Million is the payroll amount they feel comfortable with. Or maybe it is a one year deal during this economy.  If so, then Ned is the last person who should be building this team. After all the most important person to add to this team is Manny Ramirez not Mota, Blake, Hudson, or even Wolf.  Wolf might be a bauble we can't afford if we need to fit Manny into this payroll.

Then again you can't leave all those holes on the team while waiting for Manny to make up his mind. However no one put a gun to Ned's head and said spend stupid money on G Mota when any number of minimum wage pitchers could his job. That would save 2.3 Million for Manny. Casey Blake was a nice addition in November but now looks like a useless part with the addition of Hudson. However Blake was signed long before players like Abreu were signing for $5 million.  Furcal was a must addition to this team so that money has to be spent. Randy Wolf or Orlando Hudson are the final pieces. Wolf came in at $5 million this year and Hudson could be anywhere from $3 -8 Million.

So I ask you? If you need to build a team with a payroll under $100 Million why do you spend the money on Hudson or Wolf  until you have Manny locked up? Without Manny you don't need Hudson because this team ain't going anywhere. Just like Manny Hudson was not being flooded with offers. If you can't afford Manny because you signed Hudson then you might want to re-think why it is that you felt you had to have Orlando Hudson.

This team can win the West with Manny in LF and DeWitt at 2nd. It can win the West with Manny in left field and any number of candidates manning Wolf's spot in the rotation. I don't think they can win the West with Pierre in LF, Hudson at 2nd, and Wolf in the rotation. Maybe then can, hopefully we won't find out.

If you can't afford Manny, then spend the $10 Million you can afford on Adam Dunn, add Hudson, and at least you have built a team that can do some damage. Trying to buy a 25 Millon dollar ballplayer for 10 million is a great ploy only if it works. If it doesn't you end up with what we currently have.

Usually after a post like this, the Dodgers will make it all moot and sign Manny while pushing the 2009 payroll above the 100 Million dollar mark.

If they don't then they went the wrong way about building this team.

The Dodgers agreed today with Andre Ethier on a one-year contract for 2009, avoiding arbitration.  The contract has a $3.1 million salary, with $100,000 in incentives that would bring the total to $3.2 million, the exact midpoint of the salary figures exchanged by both sides in the arbitration process (Ethier wanted $3.75 million, while the Dodgers countered with $2.65 million).  I found this quote from Ned Colletti particularly interesting (from Ken Gurnick of MLB.com):

"Neither side was tremendously happy with it, the earmark of a successful agreement," general manager Ned Colletti said.

That's essentially how I feel, but the flip side of the slightly negative outlook by Colletti is that both sides "won" in some way with this deal:

1) Ethier won by getting a salary at least $450,000 higher than I believe he would have received.  Looking at the comps for Ethier, a Super Two outfielder, it would have been hard to justify Ethier setting the bar for such players with a $3.75 million salary.  The Dodgers, with an offer of $2.65 million, had a much better chance of winning the hearing than did Ethier, as their salary offer was much more in line with other players of his ilk.

2) The Dodgers won by avoiding the corrosive arbitration hearing with perhaps their most vocal and sensitive pre-free agency player in Ethier.  Sitting in a hearing listening to your team illustrate just why you don't deserve a certain salary is a drag, and now the Dodgers don't have to deal with any of the after effects of that.  Instead the Dodgers have a player who is happy instead of irritated.  Per Tony Jackson of the Daily News:

``Why wouldn't I be (satisfied)?'' [Ethier] said. ``Being a two-plus player and being in my first year of arbitration, it's a pretty big accomplishment, and it's a great stepping stone for years to come.''

Now let's see which of the young core players the Dodgers lock up first! (My vote is for Russell Martin.)

P.S. - The payroll worksheet has been updated with Ethier's salary.

After yesterday's analysis of Andre Ethier's pending arbitration case (hint: Ethier should settle), another comparable entered the fray.  The Baltimore Orioles signed Nick Markakis to a 6 year, $66.1 million contract extension, which on the surface seems like it should have Ethier licking his lips.  However, as you will soon see, this contract actually helps the Dodgers' case.

Let's look at how Markakis and Ethier compare on the field:

It looks to me like Markakis is and has been the better player.  Not overwhelmingly so, but better nonetheless. Markakis just signed a contract for $66 million (covered ably by our friends at Camden Chat).  How could this possibly mean anything other than great things for Ethier?  Well, let's look further into Markakis's contract.  Here's how the money is spread out:

Signing Bonus: $2.1m (paid over 2009-2010)
2009: $3m
2010: $6.75m
2011: $10.25m
2012: $12m
2013: $15m
2014: $15m
2015: $17.5m mutual option ($2m buyout)

Markakis has 3 years service time, just ahead of the 2 years, 153 days for Ethier.  Since MLB spreads the signing bonus over the life of the contract in its calculations, we must add $350,000 to each year of the contract for comparative purposes.  Thus, Markakis's 2009 salary is $3.35 million.

The Dodgers offered $2.65 million, and Ethier countered with a request of $3.75 million.  The midpoint is $3.2 million, and for arbitration purposes, that is the figure both sides will try to argue against.  Markakis has a higher OPS+, higher WAR, and has more service time than Ethier.  There's no way Ethier should be making more than Markakis in 2009, based on past performance.

Yet another reason Ethier should settle rather than go to arbitration.

The Dodgers and Andre Ethier have exchanged salary arbitration numbers today, as they were unable to come to terms (yet) on a contract like the club did with Russell Martin and Jonathan Broxton earlier in the day.  Per Tony Jackson, here are the numbers:

If the two sides can't come to terms on a contract before February (the midpoint is $3.2 million), both Andre Ethier and the Dodgers will have an arbitration hearing after which a 3-person arbitration panel will choose one side or the other. 

It would behoove Ethier to try to settle before this gets to an arbitration hearing, because I don't think it's a hearing he can win.  Ethier is a Super Two, meaning he is among the top 17% in service time of players with at least two years but less than three years service time.  Either has 2 years, 153 days service time.

Let's look at some outfielders with comparable service time and performance to Ethier:

When I looked at Ethier's arbitration situation earlier this month, we had fewer comps.  But now, thanks to Luke Scott signing with the Orioles, the picture becomes a bit clearer.

When you look at that group above, Either is probably the best of the bunch, but not obviously so.  Luke Scott has a higher OPS+ and more HR (in fewer games), and he's only going to make $2.4 million in 2009.  The Dodgers' salary offer of $2.65 million would make Either the highest paid among this group of Super Two outfielders.

Either's $3.75 million submission would put him too far ahead of his peers.  For his sake, he would be better off striking a deal with the club for $3.2 million or so before facing off against the buzzsaw that is Kim Ng.

Russell Martin has agreed to a one-year, $3.9 million contract, a record for a catcher in his first year of arbitration eligibility (Joe Mauer, with 3 full years of service time, earned $3.75 million in 2007).

Jonathan Broxton has signed a one-year deal for $1.825 million plus incentives.  Broxton will get $50,000 for each of 45, 50, 55, and 60 games finished.  Broxton himself finished 32 games; not bad for a half season as closer (although some came in road losses too earlier in the season).  Only four Dodgers have reached 60 games finished since 1987 (The Eck Era).

Jason Repko signed a $500,000 deal with the club yesterday, and he wants to be traded.  I can't say I blame him, since he doesn't have much of a future here.  He's useful because he has an option year two option years remaining (thanks El Lay Dave and Silverwidow for clarification on this!) so the Dodgers can stash him in Albuquerque as insurance.  I doubt he gets traded this season; the Dodgers don't have much OF depth on the 40-man roster right now.  Without options after 2009, he's a prime candidate to be non-tendered in December.

Andre Ethier and the club have exchanged arbitration figures, per Tony Jackson.  Ethier is asking for $3.75 million, and the Dodgers are requesting $2.65 million.  That seems like too high a number for Ethier to win, but most likely the two sides will settle before it goes to a hearing.

All of these signings are well under my projections, which adds to the payroll flexibility.

The payroll worksheet has been updated with these signings.