7:39pm: Peguero has rejected the assignment and elected free agency, according to the MLB transactions page.

YESTERDAY: The Orioles announced that they have outrighted the contract of outfielder Francisco Peguero to Triple-A Norfolk.

Baltimore signed Peguero, 26, to a Major League contract this offseason despite the fact that he has just 46 big league plate appearances under his belt. Peguero batted a combined .200/.217/.289 from 2012-13 with the Giants and was released after the season. Once considered one of San Francisco’s top prospects, Peguero is a career .306/.337/.427 hitter in the minors, which is nearly identical to the .307/.338/.429 batting line he’s put together this season with Norfolk. Orioles executive vice president Dan Duquette explained his thinking behind the Major League contract to MLBTR’s Tim Dierkes this offseason.

Peguero was one of three minor league free agents signed to Major League deals by the O’s this winter; right-hander Edgmer Escalona — who was also outrighted just yesterday — and lefty Kelvin De La Cruz were both signed to big league deals as well despite having little to no Major League experience.

After being selected first overall in this year's Rule 5 draft by the Astros, Schuster was shipped to the Padres before being picked up by the Royals. But with a stacked Kansas City pen, the 23-year-old never appered to have much of a chance of making the roster, let alone sticking on it for the full season.

Instead, according to a report from Andy McCullough of the Kansas City Star, the move was designed to create a reason for designating out-of-options outfielder Carlos Peguero for assignment. That, in turn, started a ten-day waiting period for Peguero. The Royals apparently hope that other clubs' 40-man spots will be occupied by the time the clock runs, making it more likely that they will be able to slip him through waivers to the minors.

Upside As A Separator

The average age of these eight players is about 27 years old, significantly younger than a standard free agent who signs a Major League deal.  Many of these seven come with top prospect pedigrees.  Peguero, an outfielder signed by the Giants out of the Dominican Republic in 2005, was ranked as the team's fourth-best prospect prior to the 2011 season by Baseball America.  As recently as last year, Peguero was ranked eighth by BA, who said he "still has the most exciting combination of speed and power in the system, along with perhaps the best bat speed."  He went on to hit .316/.354/.408 in 70 Triple-A games to earn his second big league call-up with the Giants, though he received only six starts in September.

The Giants were faced with a difficult situation.  With Peguero having used his four minor league options, they risked losing him to a waiver claim if they weren't willing to put him on the 25-man roster out of spring training in 2014.  The Giants decided to remove Peguero from the 40-man roster by designating him for assignment in late November, cutting ties by non-tendering him five days later.  As agent Dan Rosquete tells it, "The minute the Giants said 'Hey, we're taking him off the roster,' they backed it up with, 'Well, we want him back, what's it going to take?'"  After Peguero's frustration from the lack of opportunity at the end of the season with the Giants, Rosquete's primary goal was to secure playing time for his client in 2014.  Interestingly, the Giants designated Peguero for assignment in part to make room for Cordier, a big arm who had become a six-year minor league free agent after pitching in relief for the Pirates' Triple-A team.  Cordier is one of four six-year minor league free agents this offseason to sign a Major League deal with no Major League experience.

The Orioles swooped in with an appreciation for Peguero's tools, an opportunity for playing time, and a Major League offer.  Orioles executive vice president of baseball operations Dan Duquette "could tell me more about my client than I knew about him," jokes Rosquete.  "Dan Duquette called me and said 'Listen, I'm looking at everything and I can see this guy as an everyday outfielder.'"  In an email, Duquette tells MLBTR Peguero "has good talent as he is a lifetime .300 plus hitter in the minors and [is a] very good defensive player."  As a group, these eight Major League signings possess upside rarely found affordably in free agency. For example, the Indians landed a former first round draft pick in first baseman Cooper, the Orioles added a strikeout lefty who has touched 94 miles per hour in De La Cruz, and the Giants picked up a power reliever who can touch 97 in Cordier.  Plus, all of them are considered to be near big league ready.  

Contracts Dictated By Strong Markets

The majority of the eight players were six-year minor league free agents, with a handful of non-tenders mixed in.  Ultimately, teams wouldn't give Major League deals and the accompanying 40-man roster spot to this level of player unless it was necessary to get the deal done.  Duquette, who authored three of these eight big league deals with Peguero, De La Cruz, and Escalona, notes, "In each case other clubs were offering Major League contracts, so you could say that the Major League contract was required by the market."  

The only way for an agent to really know what it will take is to let the market play out.  Paul Kinzer represents the 24-year-old Pena, who became a six-year minor league free agent after 2013 when the Mets decided not to add him to their 40-man roster.  "I don't know if anybody expected the kind of response we got on him," says Kinzer of Pena.  Kinzer says the strong demand for catchers worked in Pena's favor.  Three teams were close on the player, and the Royals had to offer a Major League deal to separate themselves.  Cooper signed a minor league deal with the Indians in August after recovering from career-threatening herniated disk in his chest cavity.  He opted for free agency at the end of the month, and demand was strong enough that the Indians re-signed him to a Major League deal.  The Rays put pressure on the Tribe by also reportedly making a Major League offer.

A Possible Trend

Though we don't have complete data on the number of inexperienced players signing Major League deals each offseason, the eight such contracts from 2013-14 is definitely the highest number in recent years.  Kinzer, who by his recollection has done three or four of these types of deals in his career, "absolutely" sees a trend toward more of them.  He explains, "Teams can go out and spend a little more on these guys and sometimes get a better return on their money than going with an older, veteran guy."  By "spend a little more," Kinzer is referring to the cost of a roster spot, since none of these contracts were for more than $75K above the $500K league minimum.  The going rate for a veteran backup catcher this winter has been in the $1-3MM range.

Teams are continually trying to find outside-the-box means of acquiring younger talent.  Showing a greater willingness to barter with a 40-man roster spot in November and early December, when most clubs are not near capacity, seems savvy.  The trend could truly explode if more success stories emerge.

The biggest recent success story is the signing of lefty Jose Quintana by the White Sox after the 2011 season.  Quintana was signed by the Mets out of Colombia for $40K in 2006, and signed with the Yankees about a year later after the Mets released him due to a violation of the Minor League Baseball drug policy.  Baseball America never ranked Quintana among the Yankees' top 30 prospects, and he became a six-year minor league free agent after '11.  GM Brian Cashman told Joel Sherman of the New York Post in June 2012, "We looked at him as a fringy prospect. We offered him a minor league contract to stay, but not a 40-man roster position. We didn’t feel he was ahead of other guys we gave spots to. It was a numbers game, but right now it does not look like a good decision."  White Sox scouts Joe Siers and Daraka Shaheed "made him stand out on the six-year free-agent list," then-assistant GM Rick Hahn told Sherman, and the Sox and GM Kenny Williams separated themselves from the pack by offering Quintana a Major League deal.  Fresh off 200 innings of 3.51 ball in 2013, Quintana is a scouting success for Chicago and the best recent example of a Major League deal paying off big for a player with no experience at the game's highest level.  

Quintana, who would go a long way toward stabilizing the Yankees' current rotation, is one that got away.  The team had a firsthand look at the southpaw for five years, but preferred to keep the roster spot open when he reached minor league free agency.  Of the eight who signed this offseason, seven landed with new clubs.  Time will tell whether the Mets, Dodgers, Pirates, Rockies, Giants, and Yankees will regret letting these players go, but if more credible big leaguers emerge from the group, it's likely we'll continue to see an increase in Major League deals for minor league free agents.

Peguero, 25, was non-tendered by the Giants earlier in the week. He's batted .200/.217/.289 in a pair of brief Major League stints (46 plate appearances) but has fared better in the minor leagues. Peguero is a career .288/.318/.399 hitter in 764 plate appearances at the Triple-A level, though those numbers are likely dampened a bit by a knee injury that required arthroscopic surgery.  

Rosquete and Vallin did a nice job securing a Major League deal for their client given his scant MLB experience.  The Orioles have been aggressive in securing players of this nature, having also given MLB deals to Kelvin De La Cruz and Edgmer Escalona. Indeed, Baltimore could be a nice landing spot for Peguero. As Kubatko reports, executive vice president Dan Duquette said that Peguero has big league talent. "He just needs an opportunity," said Duquette. "I'm glad we could add him to the organization."

Prior to the 2013 season, Baseball America ranked Peguero eighth among Giants prospects, noting that he had perhaps the best combination of power and speed in the Giants' system. BA called Peguero a "hyper-aggressive" hitter, likening his approach to that of his now-former teammate, Pablo Sandoval. BA also noted that he has the tools to profile as a regular in the Majors if he can improve his recognition of the strike zone.

Kubatko first reported the signing via Twitter, while Chris Cotillo of MLB Daily Dish first connected the two sides earlier in the week (Twitter link).  

Here are some more notes out of the Bronx and the rest of the AL East:

• If the Yankees have any chance of staying under the $189MM luxury tax level, a source tells Mark Feinsand of the New York Daily News, the club needs for Alex Rodriguez to remain suspended for all of 2014. If the suspension is upheld, the Yankees will avoid both his $27.5MM salary as well as the $6MM bonus they stand to pay if Rodriguez passes Willie Mays on the all-time home run list. 
• The Yankees initially pursued Carlos Beltran more aggressively than Ellsbury or Shin-Soo Choo, reports Joel Sherman of the New York Post, but shifted their attention to Ellsbury as a third year became more and more likely for Beltran. The Mariners were seemingly willing to give Ellsbury a stunning nine-year deal, but the center fielder was apparently less than enthused about going to Seattle. Talks accelerated over the weekend when the Yanks agreed to exceed the Carl Crawford contract, Sherman reports.
• Meanwhile, Red Sox manager John Farrell told WEEI's Salk & Holley (via WEEI.com's Alex Speier) that the field staff and players were "jolted" by the news of Ellsbury's departure. With about a half-dozen current players reaching out for more information, Farrell told them that GM Ben Cherington was "doing the best he can with the two remaining guys, with [Mike Napoli] and [Stephen Drew]." "We're going to do anything we can to bring both guys back," Farrell told his players. Be sure to check out the link for a lot more quotes from Farrell on the team's recent moves and path forward.
• While Ellsbury's parting may have surprised Sox players, it seemed to be rather expected by the front office, as Speier notes. Indeed, as John Tomase of the Boston Herald reports (via Twitter), the club never made its star outfielder a nine-figure offer. Looking ahead, Boston still has plenty of work to do after resolving its catching opening by signing A.J. Pierzynski. But given the club's slate of young players already in the fold, says Speier, there are plenty of ways that Cherington can maneuver in addressing Boston's remaining questions. 
• We just learned that the Orioles could be chasing some big-money free agents, but the club's most immediate move is expected to be the addition of outfielder Francisco Peguero, reports Roch Kubatko of MASNsports.com. Chris Cotillo of MLBDailyDish.com had previously reported (via Twitter) that a deal was in place, but executive vice president Dan Duquette said that "it's not a done deal." Duquette did, however, confirm that an agreement was close. The top Orioles baseball man noted that the club likes Peguero's defensive flexibility and hit tool. Adding Peguero would leave Baltimore with two vacant 40-man spots, Kubatko notes.

• The Reds non-tendered outfielders Xavier Paul and Derrick Robinson, according to the AP.  Robinson had been designated for assignment last Thursday to open a roster spot for Skip Schumaker.
• The Rockies have non-tendered reliever Mitchell Boggs, tweets Patrick Saunders of the Denver Post.
• The Dodgers have non-tendered Ronald Belisario, tweets Dylan Hernandez of the Los Angeles Times.
• The Marlins have non-tendered outfielder Chris Coghlan and reliever Ryan Webb, the club announced via press release.
• The Pirates have non-tendered Garrett Jones, Michael McKenry, and Kyle McPherson, tweets Rob Biertempfel of the Pittsburgh Tribune-Review.
• The Giants have non-tendered Sandy Rosario and Francisco Peguero, tweets Henry Schulman of the San Francisco Chronicle.
• The Cubs have non-tendered Mat Gamel, tweets Chris Cotillo of MLBDailyDish.com. The club has also non-tendered Chang-Yong Lim, tweets Jesse Rogers of ESPN.com. 
• The Mets officially announced their slate of non-tenders, which includes a few new names in Jeremy Hefner and Justin Turner (via tweet from Andy Martino of the New York Daily News).
• The Braves announced that they have non-tendered infielders Elliot Johnson and Paul Janish as well as right-hander Cristhian Martinez (Twitter link). Johnson, 29, batted .209/.255/.283 in 275 plate appearances between the Royals and Braves last season. Janish was less productive in 45 PAs, batting .171/.222/.220. Martinez, 31, missed nearly the entire season due to shoulder surgery. However, he posted a 3.63 ERA in 151 1/3 innings for Atlanta from 2011-12, making him a potential buy-low candidate for another club.
• The Mets have non-tendered Jordany Valdespin, Rubin reports. Valdespin has been a persistent source of drama for the Mets, lashing out at manager Terry Collins after being demoted and also being slapped with a 50-game suspension for his involvement in the Biogenesis PED scandal. The soon-to-be 26-year-old is a career .219/.271/.380 hitter in 350 big league plate appearances. Valdespin's non-tender comes despite him not yet being arbitration eligible, illustrating the Mets' frustration with the second baseman/outfielder.
• The Cubs will non-tender right-hander Daniel Bard, tweets Jesse Rogers of ESPN Chicago. Bard was claimed off waivers in September and never threw a pitch for the Cubs organization. WEEI.com's Rob Bradford notes that Bard was pitching in the Puerto Rican Winter League but walked nine batters while recording just one out. The Cubs could still agree to a non-roster deal with Bard, he adds. Bard's control has vanished into thin air, as the formerly dominant setup man has also walked 56 batters over his past 47 1/3 minor league frames.
• The Mets have informed shortstop Omar Quintanilla that he will be non-tendered, Quintanilla told Jorge Castillo of the Star-Ledger. Quintanilla projected to earn $900K this offseason after batting .222/.306/.283 in a career-high 359 plate appearances last season.
• ESPN's Adam Rubin tweets that the Mets will also non-tender Scott Atchison. The right-hander projected to earn $1.3MM coming off a 4.37 ERA with 5.6 K/9 and 2.4 BB/9 in 45 1/3 innings. Atchison will turn 38 in late March.

Monell, 27, has spent his entire career in the San Francisco organization but has seen just nine MLB plate appearances. In his first full season at Triple-A last year, Monell supplied a pleasing .275/.364/.494 line in 481 plate appearances. He did not appear among Baseball America's ranking of the organization's top thirty prospects.

Peguero, on the other hand, opened the 2013 campaign at eighth on that list, with BA saying he had "the most exciting combination of speed and power in the system" while explaining that he still needed to translate his raw power to game action and improve his strike zone awareness. Now 25 years of age, the Dominican native has seen very sparse big league action but played both of the last two years at the highest minor league level. After a meager .691 OPS campaign in 2012, he managed to bump his slash up to a .315/.350/.416 level in 314 plate appearances in 2013. He only contributed four long balls and three steals, however, and took 53 strikeouts against just 13 walks (though that was an improvement over the 82 K to 15 BB ratio he put up in his first season of Triple-A ball).

Meanwhile, Cordier, who will turn 28 before the start of the 2014 season, has been a fixture in the upper minors for the last several seasons but has yet to break into the bigs. A starter for most of his career after being drafted in the 2nd round back in 2004, Cordier worked out of the pen last year for the Pirates' top affiliate. He notched 11.0 K/9 against 4.8 BB/9 but allowed nearly a hit per inning, resulting in a 4.58 ERA in 53 innings. He had never previously flashed that kind of strikeout potential while working in the Royals and Braves systems, which could be the reason that San Francisco saw fit to trust him with a valuable roster position.

• Beltran has privately told the Mets that he will not accept a trade to an American League team because he doesn't want to alternate between DH'ing and playing center field, and because he's not familiar with the league, according to Adam Rubin of ESPNNewYork.com. Beltran has a list of seven NL team to whom he would accept a trade.
• One of Sandy Alderson's top Major League scouts, Roy Smith, has been following Giants minor leaguers, according to Jeff Passan of Yahoo! (via Twitter).
• Beltran says that he would be okay with a trade to any of the five teams that have been rumored as destinations, tweets Mike Puma of the New York Post.
• The Mets are talking to the Rangers and Red Sox about Beltran but Jon Heyman of SI (via Twitter) still sees the Giants, Braves, and Phillies as the more probable destinations.
• The Rangers are interested in Beltran because of the potential impact that he can have but they aren’t desperate to add a bat otherwise, tweets Jon Paul Morosi of FOX Sports.
• Team officials for two of the clubs in talks with the Mets expect discussions to continue until next weekend, according to Adam Rubin of ESPN New York (on Twitter).
• The Giants, Braves, Phillies, Red Sox, and Rangers have each had a scout on hand to watch Beltran this weekend, tweets Jon Paul Morosi of FOX Sports.
• Yahoo's Jeff Passan says (via Twitter) the Rangers are "coming hard" for Beltran, though San Francisco is still the frontrunner. Passan singles out Giants prospect Francisco Peguero as one name that may have been discussed.
• The Red Sox see Beltran as a "total longshot," and are more concerned with adding pitching, according to ESPN.com's Buster Olney (via Twitter).
• In his Insider-only blog, Olney says the Mets are looking for a top pitching prospect from the Braves – perhaps Mike Minor, Julio Teheran, Arodys Vizcaino, or Randall Delgado. One talent evalutor says he can't see GM Frank Wren parting with any of those four arms for Beltran.
• Andy Martino of the New York Daily News looks at Minor and a few other prospects the Mets may be targeting in Beltran discussions.