While the Yankees have no interest in re-signing Javier Vazquez following a disastrous one-season return to New York, according to Ken Rosenthal of FOXSports.com they’ll offer him arbitration because Vazquez has agreed ahead of time to decline the offer.
In other words, the Yankees will be able to collect a supplemental draft pick between the first and second rounds as compensation for Vazquez signing elsewhere without having to actually risk him accepting their arbitration offer. They never would have taken that risk without Vazquez agreeing ahead of time to decline arbitration, so this essentially gives the Yankees a free draft pick.
I’m not exactly sure what benefit Vazquez gets for agreeing to decline the offer and hand the Yankees a sandwich-round pick, but he’s not the first Type B free agent to agree to such an arrangement. Rosenthal notes that general manager Brian Cashman “enjoys a strong relationship” with Vazquez’s agents, Sam and Seth Levinson, so presumably they encouraged him to do the Yankees a favor.