You can offer your own free agents arbitration. If they decline, that's where draft pick compensation comes into play and the team who loses that player will get a pick or 2 if the player is rated at a certain level of all MLB players. huh? :? Essentially, arbitration applies not only to younger players under club control, but for any player whose contract is about to run out (remember: younger players are given one year contracts each year). You can offer arbitration to any player on your team whose contract has run out after the season. In the case of the guys under club control, they're stuck with accepting it. In the case of older guys, they have the choice to accept or decline. If they accept the offer of arbitration (as Walker did), they are automatically tendered a one-year contract for an amount TBD by an arbitrator if they are unable to settle on an amount. If they decline the offer of arbitration to sign with another team, the team that lost the player will be compensated with extra picks in the next draft.