Typically, the case is actually before an arbitration panel of three people. These people tend to be labor lawyers, looking to judge a fair case without any prior interested investment in the outcome.
They also take into account different rules, such as the collective bargaining agreement CBA , the labor rules regarding baseball players, and what the players association has to say on the matter. From there, arbitrators choose a salary figure, typically one a one-year contract, that make sense for both parties. This is a provision within the CBA that helps guarantee certain eligible players the right to an arbitration procedure, if they feel they need it.
That qualification, as mentioned, can depend on years of service time, also known as years of major league service. This refers to a player who has more than two but fewer than three years of total major league service time, but still ranks as a top player in terms of the arbitration-eligible players for that year.
This may result in the player having an extra year of arbitration available to them. Baseball arbitration can be a major story in the offseason. Everything from the rest of the year—from night baseball games to salary offers the next go-around—may hinge on how salary arbitration played out. The Baseball Arbitration Process adds another unique layer to the complexity of baseball. It will be difficult for clubs and players to argue their proposed salaries as there is no previous comparable season.
The next issue with baseball salary arbitration is the arbitrators. Pitchers are evaluated on the simplest statistics such as innings pitched and earned run average ERA. However, the arbitrators do not understand those numbers. Also, there is only a short amount of time for the player and club to present to the panel, so it would be wasted time explaining the advanced statistics to the arbitrators. Thus, they will never really know how valuable these newer statistics are in proving how good a player is for a club.
Therefore, it might be time for the league to rethink the panel of arbitrators. Perhaps players and clubhouses will propose that the arbitrators be lawyers who specialize in sports law or be other professionals who work in baseball exclusively. This would ensure that they have a more advanced and current expertise level of baseball. A Super 2 player will have three years as a pre-arbitration eligible player and four arbitration years while a player who doesn't earn Super 2 status will have three years of salary arbitration following their four pre-arbitration years.
During the first three years of service a pre-arbitration eligible player will typically make somewhere around the major league minimum salary. However, once the player accrues enough service time to be eligible for salary arbitration. This benefits the player because that player now has some leverage to earn a salary that has at least some basis in that player's performance. The team is benefited because while the player will receive a salary increase, the player will still likely earn a salary lower than their true value on the free agent market.
This is important for a team because the team to either save money or to utilize the savings on other players. A player eligible for salary arbitration has to file by Jan. Once the player files, the player and team will exchange salary offers by January At this point, the player and team have the opportunity to come to an agreement on a specific figure for the upcoming season prior to the hearing.
If the player and team are unable to come to an agreement prior to the scheduled hearing, the player's salary will be determined by the arbitration panel. Cases are prepared rigorously by personnel on both sides. Agents are known to hire full-time arbitration staff, and also to bring on short-term consultants and advisors during the off-season. Teams often do the same, bringing on interns or advisors and often designating senior Baseball Operations personnel to organize case preparation throughout the off-season.
If evidence is brought up that is not specifically listed in the CBA it is not to be considered by the arbitrators. For years, the Players Association executed a brilliant strategy. As free agency created market competition and poor payroll management, GMs would bid each other up and ink players to ridiculous contracts.
In arbitration hearings, player-agents would make clear and convincing comparisons between their young stud and the mediocre talent with a ridiculously bloated contract. The result was devastating for management. Each bad contract sent ripples through the market and forced salaries up for everyone, all the way down to two-year veterans in their first salary arbitration hearing.
The rising tide of salaries in the open market would lift all boats. In the labor agreement, the owners were able to address that in part. In other words, Super Twos can be compared to Super Twos and three-year players, but not four-year players.
Threes can be compared to other threes and fours, but not fives. The exception is that fives can compare themselves to anyone, just like free agents. The Players Association did secure a loophole, though. Each panel is directed to give as much weight to the argument as they choose to. Yes, there is, and this is one of the more confusing rules in baseball contracts. This is critically different from the rule regarding maximum salary reduction for players who have not yet reached salary arbitration eligibility.
In any case, it is incredibly rare for this rule to come into play. The nature of the arbitration system almost never propogates salary reductions. The maximum-cut rule does not apply for free agents in arbitration. The Collective Bargaining Agreement specifically states that the maximum salary reduction rule is inapplicable in free-agent arbitration cases.
The last case where someone walked out of an arbitration hearing with less money than they made the previous year was Randy Milligan in Occasionally players settle prior to their hearing and settle at a salary that is less than they made the year before, but even that is extremely rare. Arbitrators can use whatever logic they want to reach their decision.
Essentially this is the same as an arbitrator looking at the midpoint between the two submitted salary figures and trying to decide whether the player is worth one dollar more or one dollar less than that midpoint.
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