One of the interesting things about the financial climate in baseball is that arbitration rulings -- and requests -- seem to trail the market by a year or two.
For example -- Ryan Howard is asking for $18 million in arbitration. Garrett Atkins is asking for $7.95 million in arbitration.
Ryan Howard had a .289 EQA last season, a .311 EQA in 2007, and a .337 EQA in 2006. He's a below average defensive first baseman who is 29 years old.
Adam Dunn is also a 29 year old below average defensive first baseman (in fact, he was born exactly 10 days before Howard). Dunn had a .299 EQA last season, a .304 EQA in 2007, and a .283 EQA in 2006. Dunn had a .309 and .316 EQA the two seasons before that, but 2006 was Howard's first full season in the majors, so we can't really compare Dunn's seasons then to Howard's.
CHONE and Bill James project a .409 and .410 wOBA, respectively, for Howard in 2009, and a .373 and .396 wOBA for Dunn.
Dunn can also play a bad left field, along with playing a bad first base, for what that's worth.
Dunn is also a free agent, unlike Howard. Dunn can market himself to any team, and any team can sign him and pay him whatever they want to pay him, without regard to putting on a case for an arbitrator. And he's still unsigned, with one agent saying he won't get more than $5 million for one year, although Ken Rosenthal thinks Dunn could maybe get 2 years at $20-24 million.
Regardless, Dunn isn't going to come close to the $18 million for one year Howard is asking for, or even the $14 million the Phillies are offering, despite the fact that they are almost the same player (even down to the huge strikeout numbers). The market has spoken, and it has decided Dunn isn't worth the big bucks.
Is there any reason to believe the market would treat Ryan Howard any differently? If the Phillies had simply non-tendered Howard, would Howard get $18 million a year for 2009? Would he get an annual salary twice what Pat Burrell (2 years, $16 million) got from the Rays?
Not likely. If Howard is a free agent right now, he probably gets a better deal than what Dunn is going to get, and than Burrell, but not much more. He's not getting Mark Teixeira money. He's probably getting $12 million on a one year deal, or something like the 3 year, $30 million deal Milton Bradley got from the Cubs.
So arbitration, for the Phillies, has become a double-edged sword, a situation where they are going to end up paying their player, who they control through 2011, more than he'd get on the open market, despite the fact that the owners have this arbitration system in place in an effort to artificially depress salaries.
Another example? Look at Garrett Atkins of the Rockies. Bad defensive third baseman coming off a mediocre year with the bat. He's 29 (born a month after Howard and Dunn), with a .262 EQA in 2008, a .280 EQA in 2007, and a .309 EQA in 2006.
Compare him to Ty Wigginton, who is 31, a bad defensive third baseman, and had a .291 EQA last year, a .275 EQA in 2007, and a .280 EQA in 2006.
CHONE and James both have Atkins projected at a .364 wOBA in 2009, compared to .351 and .347 for Wigginton. The two guys are, again, basically the same player (except Wigginton is probably a better defender than Atkins).
Wigginton, like Dunn, wants a multi-year deal, but will probably end up with a one year deal making little, if any, more than the $4.35 million he made with the Astros last year. Atkins, if he loses in arbitration, will get $6.65 million -- almost certainly more than Wigginton will make in 2009.
I don't have any pithy commentary or anything to go with this. The Phillies and Rockies may have made bad decisions in offering arbitration to Howard and Atkins, and if Howard wins his case, he's almost certainly looking at a $20 million or more salary for 2010, which could well lead to him being non-tendered next offseason if he doesn't return to his 2006 form.
But I wouldn't be surprised if next offseason, we saw a barrage of Atkins-types, in particular (possibly including Atkins himself, who is arbitration-eligible after 2009), non-tendered, as teams compare arbitration salaries this offseason to what the free agents get.