The Five Toughest Decisions of the Winter

With the regular season just a few weeks away, teams are beginning to have to make their off-season plans, at least as it pertains to players on their own roster. In situations where a player has a guaranteed contract, the decision of whether to retain them or not has already been made, but arbitration eligible players and guys who have team options for 2013 force teams to make often difficult decisions. Based on their performance and their 2013 salaries, here are the five toughest calls that teams are going to have to make this winter.

Jake Peavy, SP, Chicago White Sox – $22 million team option or $4 million buyout

While Adam Dunn and Alex Rios have both had big comebacks to spark the offense, Peavy’s return to prior form has been the biggest driver of the White Sox success this year. After dealing with a variety of arm problems, Peavy is going to throw 200 innings for the first time since 2007, and while he’s not quite as dominant as he was then, his K/BB ratio (3.89) is nearly the equal of Justin Verlander (3.93), and ranks seventh in the American League among qualified starters. He’s also the rare fly ball pitcher who can succeed in the White Sox home ballpark, and while it might seem like he’s been around forever, he doesn’t turn 32 until the end of May.

However, is a pitcher with Peavy’s track record of injuries worth $18 million (the net cost of retaining him, considering the presence of the buyout) for 2013? Last winter, Hiroki Kuroda only was able to land a one year, $11 million deal with a similar skillset, and while he was several years older, he didn’t have Peavy’s history of arm problems. It is a weak market for starting pitching, however, and Peavy could probably land a three or four year deal at a reduced annual average value if the White Sox grant him free agency. The White Sox may be looking at a choice between paying him $22 million for 2013 or paying the $4 million buyout and then bidding against others who might offer something like $36 million over three years. However, even if they had to pay the buyout, signing him to 3/36 would value the additional two years at just $9 million apiece, which is probably a gamble worth making given his production.

Verdict: Decline the option, attempt to re-sign to multi-year deal at a lower AAV.

Dan Haren, SP, Anaheim: $15.5 million team option or $3.5 million buyout

Before the season, this looked like a lock to be picked up, but Haren has struggled with back problems that have led to reduced velocity, and in turn, his worst season since his rookie season in 2002. However, an off-season of rest could solve all of his issues, and he’s had stretches of effectiveness this year, including his most recent few starts in September. However, Haren’s strikeout rate has been trending in the wrong direction for four years now, and even early in the season, he wasn’t the same frontline starter he was in Arizona.

At a net cost of $12 million, the question for the Angels will really come down to whether they can afford to keep both Haren and free agent starter Zack Greinke, or if they need to choose between them. If picking up Haren’s option stands in the way of retaining Greinke, then paying the buyout and hoping to bring him back at a lower salary seems like the best bet. If they don’t believe they can re-sign Greinke, however, then they can allocate a few million that would have gone to keeping him around to picking up Haren’s option, making sure they don’t lose two starters in one fell swoop this winter.

Verdict: Decline if they can re-sign Greinke, exercise if they can’t.

Hunter Pence, OF, San Francisco: Offer arbitration at expected $14 million or non-tender

When the Phillies traded Pence to San Francisco, the fact that he was not eligible for free agency until after the 2013 season was touted as a virtue. However, as a player who has already gone through arbitration three times (thanks to achieving Super-Two status earlier in his career), Pence’s salaries have escalated to the point where offering him arbitration might result in a paycheck that is too large for what he brings to the table.

After posting a career best .378 wOBA and +4.7 WAR last year, Pence has regressed to a career worst .324 wOBA and +1.8 WAR this season, as he’s just not getting balls to fall in for hits like he used to. His core statistics are all mostly unchanged, so there isn’t evidence of massive decline, but Pence overachieved in 2010, and his current salary reflects numbers that he probably can’t put up again. If Pence is more of a +2 to +3 win player headed into his age 30 season, $14 million may just be too rich for the Giants blood, especially if they also want to retain the more productive Angel Pagan. However, if they think that Pence could bounce back to something closer to his prior form, $14 million isn’t an outrageous sum for one year, and they would have the right to make him a qualifying offer after next season, which would give them draft pick compensation if he signed elsewhere as a free agent, which they would not get if they non-tender him this winter.

Verdict: Offer arbitration, hope he’s willing to settle for a smaller raise.

Kevin Youkilis, 3B, Chicago: $13 million team option with $1 million buyout

Since the White Sox took Youkilis from their red-stained brethren, his power and walks have come back and he’s performed as well as they could have hoped, though still not at the kinds of levels he’s achieved previously. Still, at +1.7 WAR in just 266 plate appearances in Chicago, his numbers would project out to a +4 win season in over 150 games played, which is easily worth the $12 million net cost of exercising his team option.

Of course, Youkilis has actually never managed to play 150 games in a regular season before, and has only averaged 115 per season over the last four years. So, while he’s been productive when healthy, the injuries are starting to take a toll on his body, and committing a significant chunk of the payroll to a guy who might best profile as a part-time player might not be the best use of resources for the White Sox. On the other hand, this is an absolutely miserable crop of free agent infielders, so he’d be fighting guys like Jeff Keppinger for the title of best available third base option if the Whtie Sox cut him loose. Given the relative lack of alternatives, he probably won’t have to settle for much less than what the option would guarantee him.

Verdict: Decline, but don’t expect a big savings if they try to re-sign him afterwards.

Tim Hudson, SP, Atlanta: $9 million team option or $1 million buyout

Hudson has been an excellent pitcher when healthy, and $8 million isn’t a lot of money for a guy who can still get opposing batters out, but Hudson’s future comes with a lot of red flags. He turned 37 in July, and right about that time, his velocity and strikeout rates both headed south in a hurry. After averaging 90 MPH with his fastball after coming off the disabled list in May, he bottomed out at 88 MPH in July, though he’s creeped back up to 89 in the last month or so. However, his 12% strikeout rate in the second half of the season is a problem, as even a groundball specialist like Hudson needs to miss bats every now and then in order to keep opposing runners from scoring.

Given his advancing age, his back surgery last winter, and his declining velocity and strikeout rates, committing $8 million to Hudson might not be in the Braves best interests. As a Georgia resident near the end of his career, Hudson may be more willing to take a paycut to stay close to home, but how low he’ll be willing to go while still being a rather effective pitcher remains to be seen. If the Braves put him on the market, he might be this winter’s Roy Oswalt.

Verdict: Decline, then try to re-sign to an incentive-laden contract.

Dave is the Managing Editor of FanGraphs.

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If the White Sox make it to the post-season, I think they have to exercise on Youkilis. If there’s no Youkilis, their internal options at third are Brent Morel or resigning Jose Lopez. No thanks.