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Managing the Clock

As June starts to wind down, the front office's trigger finger starts to look twitchier in terms of calling up prospects to the big club.  Maybe he's forced his way onto the team.  Maybe it's time to start sitting a moribund veteran.  Maybe it's just boredom, or lack of anything better to do.

Regardless of the reason, you can bet that the front office is keeping a keen eye on the service time being racked up by its youngest players, and that service time clock plays some part in making callup decisions.  It may seem crass or greedy to some, but there are millions of dollars at stake in watching the service time clock.

Maybe even enough to trigger the trade of a key player.

As elaborated previously, when a team signs an amateur player, that team has exclusive rights to a player's services for six to seven full seasons -- in the majors.  Once a player is added to the 40-man roster, his service time clock is running for every day he spends on the big-league club (or on the Disabled List).  At the end of the season, if he's amassed at least six full years of service time, he's a free agent.  If he hasn't, he's not.  It's that simple.

Except for the money, that is.  At the end of the season, if the player has less than three years of service time, the team can pay him any salary it wants to over the minimum, which generally means he'll make something like $400,000.

If, on the other hand, he's got at least three years of service time, he's eligible for arbitration -- in which case, he's going to get paid a very nice seven-digit number.  Whether it's $1 million or $9.9 million, or somewhere in between, depends on how much service time he's got, how valuable a player he's been, and how much he's been paid in the past.  Remember that last part.

The final catch is the Super Two rule, which is applied to players with more than two years of service time but less than three.  Each year, the top 17 percent of these players (in service time) also become arbitration-eligible -- adding millions to their salary, both that year and probably in the future.  Because past salary is one of the factors in arbitrated salaries, reaching arbitration a year earlier will also boost a player's salary in all future years.

And that simple fact has a noticeable impact on long-term contract negotiations.  Consider these six talented young players and the money they will receive before reaching free agency:

The second column shows the player's service time at the time he was negotiating his current contract -- "1.118" means one full season, plus 118 additional days out of a possible 172.  The next seven columns show the player's salary in his first six-plus seasons -- in every case, the first season listed was spent partially in the minors, and at least Y4 through Y7 are part of a long term deal.  The last column shows the player's total guaranteed earnings through six-plus seasons in the majors.  (All salary numbers in millions.)

Three things I want to point out on this list.  First, Crisp is making a lot more money than the others in Year 4.  In fact, he makes more than everyone in Year 5 and only Jason Bay tops him after that; Crisp and Bay finish in a tie for total earnings.  Second, Crisp negotiated his deal with more service time than any of the others.  Third, despite his many talents and charms, Crisp is -- by far -- the least valuable player on this list.

So what the hell happened?  Well, obviously, Crisp having Super Two status happened.  But what also happened is that his Super Two status was anticipated in considering the feasibility of a long-term deal -- both by the Indians and by Crisp's representation.  The Super Two cutoff generally falls between 2.130 and 2.140.  When Crisp finished the 2004 season at 1.158, it was fairly obvious that he was only one year away from arbitration.  In contrast, when Victor Martinez finished the 2004 season at 1.118, it was fairly obvoius that he was two years away.  That changes the negotiating position substantially.

Of course, service time wasn't the only difference bewteen Crisp and Martinez.  Martinez had emerged from a string of minor league MVP's to establish himself as an elite big-league catcher, with a good chance to be not only a "core player" for the Indians, but one of the game's best overall players in this decade.  Crisp had never been a highly touted prospect and had won a starting job in the bigs both on merit and by default.  He posted a 790 OPS that some doubted he would ever improve upon, or even match.

The Indians could have locked up Crisp right then and there, but they simply weren't sure they wanted to.  Because of those extra 40 days of service time, he was only one year removed from arbitration at that point, not two -- so they probably would have had to offer a deal similar to Victor's to get Crisp signed -- even though Crisp was nowhere near as valuable as Martinez.

A year later, Crisp had established himself as a quality all-around player with a slightly better year at the plate and a sterling performance in the field -- and he was now on the cusp of arbitration.  It's hard to overstate the effect this would tend to have on long-term contract negotations, which, for both sides, are largely dependent on estimates of both future salaries and risk.  For a player like Victor, two years away from arbitration, a long-term contract is a chance to increase his total guaranteed earnings from $400,000 to $15.5 million -- a life-changing degree of financial security.

An arbitration-eligible player, by contrast, essentially is already a millionnaire.  Any everyday player -- Ben Broussard for example -- is going to get more than $2 million in arbitration, even the first time.  This dramatically reduces the risk to a player opting not to sign a long-term deal, while doing nothing for the team.  It makes a great value for the team far less likely, because a Super Two like Crisp will have to be paid like Jason Bay -- a player who may hit 20 more home runs than Crisp every season.

In other words, the problem is not only that Crisp took longer to establish himself than Martinez did, or that he is not a player of similar value, but also that because Crisp was going to reach arbitration a year earlier, the team had one fewer year in which to evaluate him as a player while still maintaining the most favorable negotiating position.  Now, it would be an exaggeration to say that Crisp's Super Two status was the cause of his trade. But it clearly made the idea of keeping him long-term somewhat less enticing.

Super Two status is never going to be a major factor in calling up prospects, but smart and fiscally prudent teams will keep one eye on the clock in all decisions.  Crisp was called up in 2003 because of a need on the team; he stayed because he remained the best available option.  Nobody was watching his service time, in part because initially, nobody thought he'd stick as an everyday player.  By the time he'd stuck, the clock was essentially already set.  In the absence of a roster crunch or performance issue, no team is likely to demote a player for a short period purely to suppress his service time.

If Super Two status is to be avoided, generally it's best not to let a prospect accumulate as many as 130 days of service time before the end of the season. For players bouncing up and down over several years, it gets a little more complicated. Here's how the Indians' younger players' clocks figure in to this season's callup decisions:

  • Cliff Lee and Rafael Betancourt will finish the 2006 season with more than three years of service time, becoming arbitration-eligible for the first time.
  • Matt Miller will finish the season at 2.134 and is a possible Super Two.  As a reliever with significant time on the DL, however, he is unlikely to surpass $1 million.
  • Jason Davis is currently right around 2.130.  However, he has only spent about 70 days in the majors this season; players with fewer than 86 days of service time in the current season are ineligible to become Super Twos.  He'll need at least another 16 days in the majors this season, including September callups, in order to be eligible.
  • Jason Stanford entered the season at 2.005, accumulated almost entirely while on the DL.  There isn't enough season left for him to reach arbitration for 2007.  Of course, at this point he'd probably be happy just to get back to the majors at all.
  • Jason Dubois entered the season at 1.037.  Unless he spends almost the entire remaining season in the majors, he will not be arbitration-eligible before 2009.
  • Fernando Cabrera will finish 2006 at 1.105 and will reach arbitration in 2009.
  • Fausto Carmona entered the season with 22 days and has spent about 56 days in the majors this season.  Kelly Shoppach, recalled from Buffalo today, started with 44 days and has added another 50 so far.  Both players are likely to exceed a full year of service time by the end of 2006, putting them on track to reach arbitration in 2009.
  • Jeremy Guthrie currently has about 101 days of service time.  If he spends another month in the majors this season, he will be a possible Super Two for 2009.
  • Andy Marte entered the season with 60 days, so he'll be lined up to become a Super Two for 2009 if he spends 70 or more days in the majors this season.  Don't be surprised if the Indians let him continue to hone his game in Buffalo through late July.
  • Franklin Gutierrez entered the season with 33 days and was recently promoted.  Unless he is demoted for 20 or more days at some point later this season, he will be a probable Super Two for 2009.  Look for him to return to Buffalo once Blake and/or Michaels return to the field.
  • Ryan Garko and Andrew Brown entered the season with 34 and 31 days of service time respectively. Unless they are promoted to the majors immediately and permanently, they will not reach arbitration until 2010.
  • Jeremy Sowers, Brian Slocum, Rafael Perez, Joe Inglett and Ed Mujica will all finish the season with fewer than 125 days of service time; they will not reach arbitration until 2010 at the earliest.