What is arbitration in mlb? Spring training is underway, but that normally joyful return to the diamond may be a bit clouded for the 19 players who just went through one of Major League Baseball’s strangest annual traditions: arbitration.
State of play: This year’s arbitration window concluded last week, and just six of the 19 players who fought for a higher salary won their case.
That .316 winning percentage was the players’ lowest in a normal season* since 2012 — though it’s not as if the winning players necessarily feel great about what they had to endure, either.
How it works: Every offseason, players with between three and six years of MLB service time are eligible for arbitration — a process wherein teams and players each present a salary number for the upcoming season and then argue for it in front of a panel of arbitrators.
Arbitration can be avoided: Just 33 of the 200-plus arbitration-eligible players this year passed last month’s deadline without inking a contract, and 14 of those 33 settled before having to go to arbitration.
But the 19 players who had arbitration hearings were forced to engage in the uncomfortable dance of not only arguing why they should be paid more, but also listening to their teams argue why they should be paid less.
Between the lines: Among those who went to arbitration were 2021 National League Cy Young winner Corbin Burnes, 2022 American League batting champion Luis Arráez and 2022 All-Stars Kyle Tucker, Max Fried and Ryan Helsley. Not exactly replacement-level players.
Providing that kind of value for your club only to hear them explain why you deserve less money can be quite the gut punch.
What they’re saying: “There’s no denying that the relationship is definitely hurt from what [transpired] over the last couple weeks,” said Burnes, who led the league with 243 strikeouts for the Milwaukee Brewers last year.
The big picture: While the mechanics of arbitration often yield uncomfortable outcomes, the players’ union has no interest in doing away with it.
“Salary arbitration is a right that generations of players have fought for and defended,” a union spokesperson told The Athletic ($).
In fact, the union tried negotiating for players to reach arbitration sooner during last year’s lockout, while the league proposed replacing it with a merit-based algorithm. Ultimately, it remained unchanged.
The bottom line: Baseball is a game, but MLB is a business, and that’s perhaps never more apparent than during arbitration.
Players who have three or more years of Major League service but less than six years of Major League service become eligible for salary arbitration if they do not already have a contract for the next season. Players who have less than three but more than two years of service time can also become arbitration eligible if they meet certain criteria; these are known as “Super Two” players. Players and clubs negotiate over salaries, primarily based on comparable players who have signed contracts in recent seasons. A player’s salary can indeed be reduced in arbitration — with 20 percent being the maximum amount by which a salary can be cut.
If the club and player have not agreed on a salary by a deadline (typically in mid-January), the club and player must exchange salary figures for the upcoming season. After the figures are exchanged, a hearing is scheduled (typically in February). If no one-year or multi-year settlement can be reached by the hearing date, the case is brought before a panel of arbitrators. After hearing arguments from both sides, the panel selects either the salary figure of either the player or the club (but not one in between) as the player’s salary for the upcoming season.
The week prior to the exchange of arbitration figures is when the vast majority of arbitration cases are avoided, either by agreeing to a one- or multi-year contract. Multi-year deals, in these instances, serve as a means to avoid arbitration for each season that is covered under the new contract.
Once a player becomes eligible for salary arbitration, he is eligible each offseason (assuming he is tendered a contract) until he reaches six years of Major League service. At that point, the player becomes eligible for free agency.
What is MLB arbitration?
Arbitration is what happens when a player and team cannot agree on a salary number for the upcoming season. A hearing is held between the club and the player, which is heard by independent arbitors. Then, the arbitors rule in favor of the player or the club.
MLB arbitration rules
Should a player not have a contract for the upcoming season, and the club tender a contract, the player and club must agree on a salary number. Both parties have to agree to a number by mid-January.
Should the player and the club not agree on a salary number for the upcoming season, then the team and player go to salary arbitration. The player and team both file a salary number they feel is appropriate, mostly based on the salaries of players of similar ilk and production over recent years.
In a hearing in February, a panel of independent arbitors hears the case and rules either in favor of the player or the team.
Oftentimes, a player and the team will agree on a salary number before officially going to arbitration, and in recent years franchises have tended to sign players to extensions, often “buying out” years of arbitration and sometimes free-agency years.
Typically, players get raises during the arbitration process, but their salaries cannot be cut more than 20 percent in relation to the prior year.
Who is eligible for arbitration?
MLB salary arbitration is reserved for players who have at least three years of MLB service time but are not yet eligible for free agency, which is earned after six years of MLB service time.
In certain cases, players who reach a certain service-time threshold are eligible for arbitration a year earlier — this is known as a Super Two player.
What is a Super Two player?
A Super Two player is a player who has more than two but fewer than three years of MLB service time — that’s time spent on a 25-man roster or the MLB Injured List — but ranks in the top 22 percent of service time is pooled with players who are arbitration eligible, thus accelerating the player’s arbitration clock, giving him an extra year of arbitration.
The cutoff date for Super Two eligibility varies from year to year, depending on when that top 22 percent was called up/placed on a 25-man roster. In 2019, the Super Two cutoff was placed at two years, 115 days of service time, the earliest cutoff in years.
Benefits of salary arbitration
Players on their rookie contracts have no leverage when it comes to salary, meaning the club sets the player’s salary as it sees fit (usually around league minimum). Arbitration-eligible players are more fairly paid for their contributions to their major league squad, and for the first time have a say in their salary.
Cons of salary arbitration
Arbitration can be a messy, vicious process; teams are trying to prove the player is worth less than what he believes he’s worth, while the player is trying to earn a raise in the years leading up to free agency.
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