Downs and Frasor both qualified as Type A free agents, which means Toronto will receive two compensation Draft picks if either declines the offer and signs elsewhere. Gregg and Olivo are ranked as Type B free agents and will net one Draft pick each if they leave.
In the case of Downs and Frasor, the exact location of the compensation picks won't be known until much later in the offseason.
Teams are required to forfeit a first-round Draft pick, but if they sign another Type A free agent that is ranked higher than the Toronto relievers, then the pick the Blue Jays receive drops into the second round.
That is what happened when A.J. Burnett signed with the Yankees in 2008. Toronto originally was eligible to receive a first-round pick from the Yankees but had to settle for a third-round selection after New York also signed Type A free agents Mark Teixeira and CC Sabathia.
The first 15 picks of the first round also are protected. If a team that falls into that category signs a Type A free agent, it would only be forced to part with a second-round selection.
The second pick the Blue Jays would receive as compensation falls in between the first and the second round. That's also the location of the pick Toronto will receive should Gregg or Olivo leave on the open market.
Downs, 34, went 5-5 with a 2.64 ERA and 48 strikeouts over 61 1/3 innings. If he accepts arbitration, the native of Kentucky will be in line for a raise over the $4 million salary he earned in 2010.
That appears to be an unlikely scenario, though, in light of the current market for elite middle relievers. The Red Sox and Yankees are both looking to add to their bullpen depth, which should help relievers such as Downs earn multiyear contracts.
Also driving up the market for middle relievers is the contract Joaquin Benoit recently signed with the Tigers. The 33-year-old right-hander inked a three-year, $16.5 million deal after going 1-2 with a 1.34 ERA and 75 strikeouts over 60 1/3 innings. Impressive numbers, but Benoit is only one year removed from missing the entire 2009 season following rotator cuff surgery.
Frasor also could receive a multiyear offer from another organization, but it's not immediately clear whether his Type A status will scare off other teams. He could instead opt to accept the arbitration offer and remain with the Blue Jays for another season. The 33-year-old went 3-4 with a 3.68 ERA and likely would receive an increase on the $2.65 million salary he earned in 2010.
In the case of Gregg and Olivo, others teams will not have to forfeit a Draft pick if they are able to sign either player.
Gregg could garner some interest in free agency after posting a career-high 37 saves to go along with a 2-6 record with a 3.51 ERA.
Olivo, meanwhile, shouldn't have any trouble finding a multiyear contract because of the lack of depth in the free-agent pool for catchers. The 32-year-old hit .269 with 14 home runs and 58 RBIs in 112 games last season.
The Blue Jays also will receive one compensation Draft pick for catcher John Buck, who recently signed a three-year, $18 contract with the Florida Marlins. Buck was offered arbitraton by Toronto in what was a mere formality to ensure a compensation pick would be granted to the Blue Jays.
The Blue Jays are now eligible to receive as many as 10 picks in the first three rounds of next year's First-Year Player Draft. That's one more than the team received in 2010 after free agents Marco Scutaro and Rod Barajas left for other teams.
But Blue Jays general manager Alex Anthopoulos previously stated he has had ongoing dialogue with the four players, and it's possible they could all remain in Toronto next season.
Anthopoulos opted not to offer arbitration to first baseman Lyle Overbay. The 33-year-old was not a ranked free agent and therefore the club would not have received compensation if he signed with another team. The Blue Jays could still opt to work out a contract agreement with the veteran infielder.