Part two in the series I'm shamelessly stealing from the Rev.
Another toughie, in that there's no obvious replacement in the organization. There are candidates, but none are particularly trustworthy in a fifth starter role. I'm not Steve Green is ready for a regular rotation spot. I'm more sure that Nick Adenhart isn't ready. I'm not sure Dustin Moseley will ever be ready. All three are potential sixth starters, but none jump out at me as rotation regulars at this point. Escobar looks like a mid-season bullpen guy at this point.
Not having a capable replacement in line presents a problem for a pitcher like Garland. I'm not sure the market knows what he worth, though I suspect it's not the $12MM he earned last year. So let's say they re-sign him at $7MM per, maybe $8MM. That takes them out of the market for C.C. Sabathia, unless they're willing to sign both and deal with it later. But there's no guarantee they end up with C.C. or even a solid middle rotation starter in free agency. If you wait to see what you can get on the market, you may end up waiting too long, at which point even Garland is gone.
I think the prudent thing to do is offer him arbitration (to preserve the compensation). Then they make a run at a front line starter. If they land one, they don't re-sign Garland and hope he doesn't accept arbitration. If they don't, they re-up with Garland for a short term deal. If they fail to land a good starter AND Garland leaves, they go after a Garland comparable, or try to land one via trade.
Key point about arbitration, awards are for one year contracts. Worse case scenario, they sign a guy like Sabathia, and Garland accept arbitration. In that case, the Garland deal is only one year, and the Angels go into spring with six starters. Someone's likely to get hurt (remember when Santana and Saunders were battling for one rotation spot?), or you deal Weaver or Saunders for a big bat. I don't want to see either of those guys traded, but I'd do it for the right return.