If you have been paying attention to arbitration news in Major League Baseball, you may have heard that the Cubs had the option to offer Kerry Wood and Bobby Howry arbitration by midnight tonight. Well the Cubs chose not to offer that to him, but what does it all mean?
Basically, major league teams can offer arbitration to certain free agents by 12/1 (yesterday) and then those players have until 12/7 to accept. Since the Cubs declined to offer Wood or Howry arbitration, you might be asking "Who cares?" Well it matters. In baseball, when a marquee free agent leaves, the team that he leaves is rewarded with high draft picks. The team only gets those picks, however, if they make an effort to resign the free agent. That "effort" is satisfied only by offering the free agent arbitration. What this means is that the player and the team sit down in front of an arbitrator and that arbitrator decides what that player's value is in terms of salary. The team is then bound by that salary amount, if the player chooses to accept it.
In terms of Bobby Howry, there was never a question that they would offer him arbitration, since whatever amount an arbitrator decided on would be more than they would be willing to spend on a washed up reliever.
Kerry Wood is a different story. The Cubs in this situation decided that an arbitrator would have determined that Wood was worth 9 million or more. They feel that they do not want to pay that much, as evidenced by their earlier decision not to offer Wood a contract. Even though the 9 million one year deal is probably far below the multi-year deal that Wood could get on the open market, Hendry still felt Wood might take it anyways since he has a clear preference to stay in Chicago.
Thus the Cubs did not offer Woody arbitration and will get no compensation draft picks. This seems reasonable, seeing as that 9 million is a huge chunk of money and could cut into Hendry's ability to trade for Peavy or acquire a left-handed bat in the outfield. It is not as cut and dry as that, however. Since Hendry went out and acquired Kevin Gregg, he is going to be on the hook for about 5-6 million for Gregg. So essentially what this means is that the difference here is only about 3-4 million. I do not know the market for left-handed bats as well as Hendry, but 3 million does not seem like a good enough reason to give up 2 high compensation picks or take a huge downgrade in the bullpen from Wood to Gregg.
All in all, I give the handling of this entire situation a B-. If 3-4 million is the difference between getting a power left-handed bat or not getting one, then so be it. We can only wait and see what happens but I find that hard to believe 3 million will be the difference and it seems the Cubs would be far better off with 2 compensation picks (if Kerry refused the offer) or having Wood over Gregg (if he accepted and thus Hendry did not need to deal for Gregg at all).