Billy Wagner and salary arbitration

Theo Epstein, a general manager raised from the Billy Beane School of Hoarding Draft Picks, didn't just trade for six weeks of Billy Wagner on Tuesday. He potentially traded for a couple of impact players in next year's amateur draft.

Wagner signed a contract four years ago that includes an $8 million team option for the 2010 season. Epstein agreed not to pick up that option but would not assure the pitcher he would not offer salary arbitration at the end of the season.

"The Mets had told him that they weren't going to exercise his option," Epstein said, "so we thought it was fair to leave him in the same position he would have been with the Mets. We do have the right, as the Mets would have had the right, to offer him arbitration at the end of the year as appropriate. We'll deal with that at the appropriate time."

(This, by the way, is why it was so baffling that Wagner insisted on the Red Sox promising not to pick up his option for next season. There was no way Epstein was going to pass on a chance to add a couple of draft picks to his team's coffers next June. Remember that scene in Moneyball where Beane trades for Ray Durham mostly just to cash in on the two draft picks at the end of the year? This is almost the same thing.)

Barring serious injury between now and the end of the season, the Red Sox almost certainly will offer the hard-throwing lefty salary arbitration. Once the Red Sox make that offer, things could go one of two ways:

1. Wagner could accept arbitration. The two sides then could negotiate a one- or two-year deal or, failing that, present their cases to an independent panel. Wagner, who has been paid $10.5 million in each of the last four seasons, likely would be awarded a salary somewhere in the ballpark of $12 million.

The Red Sox then would have added a talented lefthanded reliever to their bullpen for next season without having to forfeit the first-round draft pick he would have commanded on the open market.

The downside to the offer of arbitration, of course, is that the Red Sox could be stuck paying that salary no matter what might happen to Wagner. The lefty could tear his elbow to shreds in May, and the Red Sox would have no recourse.

If he were to hurt himself in spring training, though, the team would have an out. Arbitration salaries are non-guaranteed, and that means the Red Sox could cut him by mid-March and pay just 30 days' termination -- or cut him by Opening Day and pay him just 45 days' termination. (Those two numbers would work out to about $1.5 million and $2 million, respectively, on a $12 million contract.)

For the Red Sox, $1.5 million is pocket change.

2. Wagner could decline arbitration. The pitcher could sign with any team at any salary. If he signed with a different team, the Red Sox would receive that team's first-round draft pick and an additional pick in the supplemental first round.

(Note: The Red Sox only would receive a first-round draft pick if the team that signed Wagner had its pick in the final 15 picks of the first round. The first 15 picks are protected from free-agent compensation, and the Red Sox then would receive a second-round pick. Fortunately for the Red Sox, there aren't many teams who finish with a sub-.500 record who are in the market for a high-priced closer the next season.)

The Red Sox then would have traded two non-prospects -- various reports have the Mets receiving Triple-A slugger Chris Carter and another prospect "not of significance" -- for a first-round draft pick and a supplemental draft pick.

This seems like the far likelier scenario particularly given how much Wagner, a career closer, would prefer not to be a middle reliever. He'd only accept arbitration with the Red Sox if no other team showed any interested whatsoever in making him its closer.

If left fielder Jason Bay also declines an offer of salary arbitration and signs elsewhere, the Red Sox would have three first-round picks and a couple of supplemental-round picks. Epstein could feel comfortable signing a Type A free agent like Matt Holliday or Marco Scutaro despite the forfeiture of his own first-round pick -- or he and Jason McLeod could begin preparations for a 2005-like draft haul.

That's what we in the business call a win-win.