The Jose Valverde Situation

A week ago, I pleaded with the Astros not to offer closer Jose Valverde salary arbitration. My reasoning:

"Even though it would seem that the risks outweigh the rewards here, financial flexibility is crucial to the Astros, who are in the process of slashing payroll. If their payroll is cut $15-$25 million in 2010, that would leave the Astros with a $80+ million dollar payroll. Can the Astros afford to commit at least $10 million of that to a closer? I don't think so, especially when you take into account that the 2010 Astros right now are locked into 4 players for a combined $54 million dollars. Adding another double digit salary would leave very little payroll to address the various needs of the team and arbitration raises.

In addition, with all the quality closers on the market this winter, there is a significant possibility that there will be good deals on the market for those teams that are patient."

In the end, the Astros decided to offer Valverde salary arbitration, perhaps hoping that Valverde would decline the offer, look for a multi year deal on the open market, and the Astros would wind up with two high draft picks thanks to his type A status. As soon as Valverde was offered arbitration, I began to wonder if he would actually accept it:

At this point, does it make any sense for Valverde to accept the Astros arbitration offer? If he's looking to maximize his earning potential in 2010, then he should absolutely accept because I doubt he's going to make as much as the Astros will have to pay him through arbitration. Valverde is regarded as one of the premier closers on the free agent market, so it's a lock that he will receive a huge contract on the free agent market, right?

Wrong. As we saw last season with Brian Fuentes and K-Rod, the market for closers tends to depreciate when the economy is poor and given all the closing options out there for teams this winter, is it out of the realm of possibility to think that Valverde might not get the free agent riches he craves?

With the arbitration deadline looming tonight at midnight, there are murmurs around the baseball world that Jose Valverde will go the conservative route and accept the Astros' arbitration offer. As Rosenthal and Morosi report:

"Astros owner Drayton McLane isn't going to like this.

Free-agent reliever Jose Valverde could accept the Astros' offer of salary arbitration by Monday's midnight ET deadline, according to major-league sources.

The return of Valverde would eliminate the Astros' need for a closer.

But it also could be a $10 million hit for a team with limited payroll flexibility.

Valverde, who turns 32 on March 24, earned $8 million last season. He missed more than six weeks in the first half with a right calf strain, but went 17-for-17 in save opportunities after the All-Star Game with a 1.64 ERA."

From Valverde's perspective, accepting arbitration would be a sound move only if he feels like he cannot land a multi year deal on the open market. Given how few teams are looking for closers and how many free agent closers are on the market, it would not surprise me if Valverde struck out on the free agent market this season even though he is one of the most coveted closers on the market. With Valverde set to make around $10 million dollars through arbitration, it's hard to envision a scenario where he is able to make more than that on the open market for 2010.

If I'm GM Ed Wade right now, I'm nervous, very nervous. He can state publicly that he'd love to have Valverde back, but if he does indeed accept the Astros' arbitration offer, then the Astros payroll situation would become constricted and worrisome. If the Astros are seriously thinking about cutting payroll, how can they justify paying 5 players almost $65 million dollars next season? Would the Astros have to trade one of their high priced players away? How can the Astros afford to increase the salaries of Wandy Rodriguez and Hunter Pence through arbitration? How will the Astros be able to pay 20 players between $20-$30 million?

I said it before and I'll say it again: offering a closer, who made $8 million last season, arbitration in this market was too risky of a move for the Astros to make. Now they might get burned for it and they will have to pay the price, which in this case, is very steep.