how to get a credit card processing account can you pay lowes credit card gift card credit card repayment cover halifax can use credit card checks debit credit card line of credit pnc secured credit card credit card payment schedule spreadsheet cvs credit card credit card templates illustrator american airlines aadvantage credit card reviews valid visa credit cards numbers get a credit card instantly credit card debt lawyer pa 1st national processing credit card companies pay the home depot credit card online printable credit card receipt form credit card repayment cover ppi american airlines aadvantage business credit cards credit card details generator free itunes account no credit card free credit card swiper for android credit card loan consolidation calculator 76 credit card application how to write a hardship letter to credit card companies use virtual credit cards paypal icici customer care credit cards gander mountain credit card mastercard how to answer a credit card lawsuit in california citibank credit card images sony playstation credit card breach getting your money back credit card address mail walmart credit card payments visa credit cards account information what are prescreened credit card offers visa airline rewards credit cards compare canadian credit cards 2010 do interest free periods credit cards work tesco credit card online make payment credit cards that start with 4802 suntrust secured credit card offers pay brylane home credit card apply credit cards bad credit no credit check chase credit card status online credit cards with ;chip and pin; technology credit card summons california credit card offers 0 apr 12 months hdfc credit cards emi offers boa credit card payment best credit card for cash back canada chase amazon credit card login .gov credit card consolidation lipman credit card machine balance transfer credit card meaning ocbc bank titanium credit card credit card wage garnishment california hilton rewards credit card paypal credit card mobile abn amro nieuwe creditcard aanvragen intuit credit card for ipad bank america credit card account login credit card signs minimum member one credit union credit card exxon mobil credit card online access hdfc credit card online payment ifsc code first national bank credit cards online credit card bill payment standard chartered bank how soon to apply for credit cards after bankruptcy hdfc credit card terms and conditions credit card balance transfers uk costco credit cards processing card usb flash drive price products credit can get credit card score 600 most luxury credit cards credit card knife cancel victoria;s secret credit card online interest rates us bank credit cards how to apply for a credit card from bank of america amex nectar credit card login javascript verify credit card number balance transfer credit card no fee 0 cheapest credit card merchant services fake credit card templates balance transfers credit card offers credit cards that offer 0 interest rates credit cards based on equifax score best credit cards to build credit for students banks credit cards singapore hsbc credit card agreement pay my gottschalks credit card online banksa amplify credit card joint credit card company diners club credit card application singapore slumberland credit card payment wells fargo hdfc visa gold credit card new credit cards 2013 best credit card to apply for with bad credit pay off debt credit card negotiate your credit card debt settlement pier one imports credit card customer service signing the back of a credit card valid credit card security number platinum credit card amex credit cards business no credit history preapproved credit card then denied pictures of credit cards free apple id without credit card on iphone credit cards with no fees for balance transfers the best unsecured credit cards for bad credit numero servizio clienti deutsche credit card bankrate credit card minimum calculator chase credit card check balance by phone ge money online credit card access phone numbers to report stolen credit cards can we withdraw cash credit card chase disney credit card login in applied cvv number american express credit cards how to use secured credit cards to rebuild credit credit card to help build my credit card usb flash drive china cheap credit tesco clubcard credit card charges abroad bank of america credit card routing number activate citibank credit card phone number pay hsbc credit card online payment citibank premier credit card 50000 my credit card details safe psn federal government credit card counseling citibank credit card payment using bill desk best credit card with airline miles american signature furniture credit card number how do i make my credit card primary on paypal barneys credit card discount online credit card approval now credit card advice for college students carnival sea miles credit card application how do i change my apple credit card info take credit card payment through paypal credit card balance transfer fee free can pay credit card through paypal ebay apply credit card rebuild my credit african bank credit card application online can you use a walmart credit card anywhere capital one credit card access code disney credit card $200 gift card best credit card reader writer best apr rates on credit cards pay my credit card bill online bank america prepaid visa credit card number pay my exxon mobil credit card bill great credit cards for students virgin atlantic credit card offers the gm credit card sign in householdbank credit card payment online citibank mastercard credit card india first savings bank credit card application starwood preferred guest? business credit card from american express open apply best credit cards online rbs online credit card uae anz credit card cash withdrawal fee westpac low rate credit card interest rate best credit card incentives in canada credit card website images easy to get department store credit cards 2012 visa credit card best interest rates bosca credit card wallet with money clip how can i send money online using my credit card using chase credit card checks earn credit card identifier for american express is compare usaa credit cards best delta credit card deals google play store update credit card apply for credit card with frequent flyer miles credit cards for bad credit with no start up fees cvv no american express credit card simmons credit card online how do i create an apple id account without a credit card aarp credit card 5 cash back carte blanche credit card validation credit card address verification codes sbi credit card apply application credit card indian bank my credit score free no credit card required credit card reader for iphone paypal low interest credit card nz not using a credit card hurt credit score pre approval high limit credit cards how to get a credit card company to lower my interest rate compare credit cards travel insurance discount fee credit card processing does ally bank have a credit card what you need to know about accepting credit cards new credit card for balance transfer american express delta credit card benefits what major banks offer secured credit cards solo credit card credit india plastic card embossing machine arco credit card fee credit card merchant processing credit care card holder what is credit card processing wiki which is the best credit card available in india sears card credit score free best interest rate on credit cards canada credit card lawyers houston the home depot consumer credit card payment address credit card application bad credit no application fee credit card information stolen psn hack apply for a prepaid credit card + canada what credit cards does costco accept for gas best 0 balance transfer credit cards uk best air credit cards best buy hsbc credit card account login aaa credit card bank of america sign in how does cancellation of credit card affect credit score facebook credits gift card code free credit card 2 cash back rewards ba credit card hdfc credit card offers best credit card rebuilding credit scores pier one imports pay credit card citibank credit card rewards redemption catalogue malaysia credit card cash back bonus bank america credit card services address free application for credit cards hsbc kawasaki credit card payment marathon oil credit card discount delta credit card baggage fees old credit card debt bankruptcy apply nordstrom credit card online us government credit card low standard rate credit cards how to pay hsbc credit card bill online from hdfc bank verizon wireless credit card processing credit card machine my new business best buy credit card payment in store can i ask my credit card to lower my apr remove credit card paypal limited how to ask credit card companies to lower payments current airline credit card promotions my 1st premier credit card chase bank usa credit card customer service polo ralph lauren wallet burnished credit card case with money clip inside the credit card black market credit cards for people on social security credit card monopoly board game credit card software for mac walt disney world credit card one nevada credit union credit card get credit card machine new business best leather money clip credit card holder chase freedom credit card review 2012 what is the name of the three digit code on the back of a credit card can i freeze my credit card in water how to cancel my american express credit card declaring bankruptcy on credit card debt citi credit card log in online bank of america credit card international usage psn credit card safe credit card interest vs car loan interest ocbc malaysia credit card application status abn amro credit card customer care online credit card payments without merchant account chip pin credit cards canada intuit quickbooks accept credit cards chase credit card lawsuit 2009 aaa platinum plus gas rebate credit card credit card starting with 3727 first citizens credit card online cell phone credit card processing iphone can you use lowes gift card pay lowes credit card hsbc premier credit card requirements login capital one credit card account free credit score without putting credit card information credit card paper application best gas credit card anz visa credit card balance united credit card chase bank jp morgan chase commercial credit cards best credit cards earn travelocity miles barclays credit card apply hyderabad accepting credit card payments on ebay jp morgan chase credit cards canada check status of sears credit card application hdfc titanium credit card current offers portable credit card processing terminal credit card signature not required icici photo credit card india zero fee credit cards australia credit card act 2009 disclosure apply for lowes credit card online b of a credit cards sign in government credit card bailout gov get credit card atm pin hdfc cards virtual credit cards paypal abn amro credit cards online nl cash rewards credit card citi bank rate credit cards does secured credit card rebuild credit detecting credit card type number new credit card bankruptcy laws credit card debt help 2010 pay gas company credit card fake credit card verification code global transport credit card processing capital one credit card login us credit card apr explained example hsbc amanah credit card privileges visa credit card chase freedom credit card logon credit card debt statistics in 2010 credit rebuild credit cards chase mileage plus credit card benefits debit/credit card vending machines 0 apr balance transfer credit card no fee write off credit card debt uk halifax credit card ppi claim bad credit card card merchant account credit card processing canada credit card ppi claim calculator can use paypal accept credit card payments security code on credit card generator united airlines chase credit card 10000 miles good credit card for gas purchases put your own picture credit card accept credit cards your android phone best in store credit cards to have can you use zappos credit card nordstrom rack get netflix free trial without using credit card credit cards no balance transfer fees 0 interest requirements getting bpi credit card chase visa signature credit card extended warranty credit cards for under 18 uk master credit cards apply credit card account number rental application customized credit card chase free prepaid reloadable credit cards stats on college students and credit cards credit card insurance premium interest free credit card offers australia low balance credit card chase credit card insurance car rental cvv number on credit card citibank credit card balance transfer interest rate calculator cheap credit card machines wells fargo credit card interest rate incipio stowaway credit card case for iphone 4 firestone credit card payment bank of america credit card travel protection priority club chase credit card 6000 first financial bank usa credit cards paying credit card bill on due date free real credit card numbers security codes work my first premier secured credit card prevent online credit card theft credit card helps your credit score can get credit card pay off loan credit cards zero interest rate personal credit card debt us visa credit card applications bad credit american express prepaid credit cards balance no fee 0 balance transfer credit cards credit card machine repair atlanta chase credit card number generator american express business credit card application discount credit card processing services chase bank credit card after bankruptcy chrysler credit card test how to get a lower interest rate on credit cards how to accept credit card payments for my business does getting declined credit card hurt credit score mastercard top up credit cards best business credit cards for good credit office depot business credit card online list of real credit card numbers and security codes british airways chase credit card miles hsbc credit cards offers fortunoff credit card payment pay target credit card over phone russell simmons credit card fees visa credit card students no credit wfnnb king size credit card capital one student credit card journey ashley stewart credit card customer service number cash advances and credit cards number to cancel bank of america credit card pay my capital one credit card bill best credit card transfer balances no transfer fee apply pnb global credit card credit card size 8gb storage device card only checks transunion free credit report mail order credit card processing service credit card cash transfer 0 best signup bonus credit card 2012 citi platinum select credit card review block pre-approved credit card offers credit card manual imprinter credit cards for stay at home parents paypal pay with credit card cash advance mailing address for lowes credit card payments horizon gold unsecured credit card american air lines credit cards paypal prepaid credit card review credit cards australia no credit checks best unsecured credit cards people bad credit hsbc credit card online application malaysia qantas credit card uk do u need credit card for apple id account without best buy credit card score minimum credit card readers for ipad flexperks credit card offers free credit report.com without credit card is it bad for your credit to apply for a credit card credit card number and security code example list of all credit cards in canada do bank of america have secured credit cards ge money credit card customer service number manhattan credit card payment online india the best credit cards for airline points credit card with chip for europe guaranteed secured credit card approval car rental no credit card no credit check credit card terms and conditions safe send credit card number through email alaska air credit card rewards best business credit card offers small business pay new york and company credit card credit card lawsuit attorney dallas manhattan credit card payment online pay off credit card debt faster american airlines credit card account login american express credit card online bill payment india bdo credit card philippines rewards pac sun credit card slate credit card online chase credit card payment online apply online credit cards india international student credit card in usa icici credit card status of application form best cash rewards credit card program what to do if credit card is compromised credit card india citibank home depot credit card online access ipad credit card swiper canada aventium black credit card status best cashback credit cards clark howard no foreign transaction fee credit card usa continental chase credit card sign on aa citi credit card login do need credit card information itunes credit card phone processing can you use a capital one credit card at an atm sears credit card bill payment online pay firestone credit card credit card exchange rate calculator credit cards with benefits compared chase bank joint credit cards 5 star credit card account best iphone credit card swiper room store credit card hsbc what are some good credit cards to have hsbc advance visa platinum credit card free credit card backgrounds bank america world points credit card benefits business credit cards with rewards no annual fee credit card processing applications for iphone best credit card for travel miles 2010 buckle credit card online pay check city bank credit card status furniture stores that offer credit cards juniper bank credit card sign in average credit cards americans have can you send money credit card through paypal fake credit card numbers that work with security code and expiration date 2011 can you use american credit cards in europe usb credit card reader pos hsbc credit card balance transfer offer amazon payment two credit cards virgin air mile credit card car rental no credit card cape town spg credit card canada promotion best retail credit cards for bad credit citibank eva air credit card canadian secured credit card applications find unsecured credit card bad credit wyndham rewards visa credit card cash back bonus credit card rewards credit card balance transfer current account business rewards credit card offers chase credit card phone number card report lost best way lower interest rate credit cards city credit union has limited your debit card credit card interchange fees act low interest visa credit cards for bad credit managing credit card debt calculator foreign credit card zip code low fee cash advance credit cards lowes credit card mailing address payments credit card vs debit card online purchase good credit cards help rebuild credit best credit card abroad 2012 accepting credit cards online canada
Home Maury Brown Breaking Down How Salary Arbitration Functions in MLB

Like Shoot to Thrill - An AC/DC Tribute on Facebook!

An authentic tribute of AC/DC that covers the best of the Bon Scott era and the best of Brian Johnson's material

Who's Online?

We have 601 guests online

Atom RSS

Breaking Down How Salary Arbitration Functions in MLB PDF Print E-mail
User Rating: / 62
PoorBest 
Written by Maury Brown   
Friday, 30 January 2009 17:09

A Biz of Baseball Original ArticleEach year, hundreds of millions of dollars are doled out to players that are part of the salary arbitration process in Major League Baseball. This year, 111 eligible players filed for salary arbitration, and by mid-February all of them will have reached new contracts either through negotiations with their respective clubs, or through rulings by an arbitration panel.

While many have heard of the process, the details aren’t widely published. With arbitration season in MLB in full swing, here’s a breakdown of the process.

History

Many have said that the breaking of the Reserve Clause is the greatest advancement for the players, but Marvin Miller, the former executive director for the MLB Players Association, has said that salary arbitration did more for advancing the salaries and rights of the players.

Before 1973, players were offered a contract by the clubs they played for, and it was a matter of “take it, or leave it.” In an attempt to challenge the Reserve Clause, as well as leverage higher salaries in this system, players began conducting holdouts on contract renewals. The owners, and then commissioner Bowie Kuhn, realizing the wolves were at the door, opted to allow salary arbitration as a way of stopping the holdouts, and rationalized that in the long run, stop free agency. Only Charlie Finley of the A’s and Dick Meyers of the Cardinals voted in opposition of salary arbitration.

“We’ll be the nation’s biggest assholes if we do this,” Finley said at the time. “You can’t win. You’ll have guys with no baseball background setting salaries. You’ll have a system that drives up the average salary every year. Give them anything they want, but don’t give them [salary] arbitration.”

Meyers, who had experience in arbitration, said it more darkly, “This will be baseball’s ruin.” 1

In this new system, players with over 2 years of major league system could file for salary arbitration, if they were not under long-term contract. If the sides could not come to a contract agreement within a period of time, the club would submit a salary figure for the coming season that they felt the player was worth, while the player would do like wise. If the sides could not reach agreement with the figures submitted, the parties could go before arbitors from the National Labor Relations Board and present their case. The arbitors would then rule on one figure or the other. There would be no middle ground.

The system remains much the same, with a panel of three arbitrators ruling on salary cases.

How the Sides Have Fared

As was often the case, Charlie Finley was right. It was not the doom that Meyers predicted, but players almost exclusively come out ahead.

To date, of the 485 cases that have gone to arbitration hearing, the owners have won 280, while the players have won 208. But, the owners haven’t truly won. Of the 110 players that filed for salary arbitration last season, their average salary increased 120 percent from $1.38 million to $3.04 million. Ryan Howard saw his pay jump 1,011 percent from the year prior when he won his case before the arbitration panel going from $900,000 to $10 million.

Understandably, players and their clubs work to reach agreements in advance of hearings. This year (as it has often been in the past) the deals reached have mostly been 1-year agreements with the base salary for the player being below the mid-point between the club offering and player asking figure (to date, only John Maine’s contract is exactly between the Mets’ offering salary and his asking figure while Justin Duchscherer sees a salary $100,000 higher than the mid-point between the A’s and his figures). Still, with 46 players exchanging figures, 13 contracts that have been reached by players and clubs after salary figures were exchanged (Nick Markakis, Zack Greinke, Maicer Izturis, Jason Kubel, Melkey Cabrera, Justin Duchscherer, Geoff Geary, Wandy Rodriguez, Prince Fielder, Chad Durbin, Jayson Werth, John Maine, and Brian Bruney) sees average salary increase from 2008 to 2009 is 257 percent. In total (single year, and multi-year contracts) these 13 alone account for $151,910,000 in salaries.

As the stakes have grown ever higher, the number of cases that have gone all the way to hearing have dropped. In 1973, the first year of salary arbitration in MLB, 29 cases were heard with the owners winning 16 cases, and players winning 13. Since then, the highwater mark has been 1986 when 35 cases were heard (owners won 20 cases to the players 15). As recently as 2005, only 3 cases were heard (all pitchers): Kyle Lohse and the Twins, Jeremy Affeldt and the Royals, Juan Cruz and the Athletics.

A Peek Inside How Salary Hearings Function

The criteria by which salary arbitration cases are presented are part of the CBA, although from talking to a baseball man that has made a living a salary arbitration for nearly every club, while it is outlined in the CBA, most anything is permissible at hearing, it’s just that what is presented can be easily challenged and undermine your case, should the information presented fall far outside the CBA’s criteria.

Player Comparison – The sides are allowed to use other players with like ML service time as a comparison to make their case. The CBA expresses this as “Major League service not exceeding one annual service group above the Player’s annual service group.”

Player Comparison (Look Backs) – While using a player with more ML service time as a comparison in terms of 2009 salary to 2009 salary, the sides can do a “look back”. So, for example, using Albert Pujols’ numbers and salary for 2009 would not be acceptable in Ryan Howard’s case, but using Pujols’ figures when he had the same ML service time that Howard now has is permissible.

Contract Comparison – In nearly every instance, one-year contracts are used in hearing. Multi-year contracts are not used as they have different structures – frontloaded, backloaded, etc. So, using a 2009 salary figure in a mult-year contract creates issues as the single year salary could be influenced by the overall contract structure.

Position Comparison – For practicality purposes, comparing players at like positions are used. Clearly, attempting to compare a middle infielder to a catcher would not hold much weight with the panel. However, instances of comparing corner outfielders has been used.

Does Advanced Sabermetrics Come Into Play? – As Finley crudely noted, the arbitration panels are not “baseball people”. Therefore, advanced metrics are normally not employed in the hearing process. OBP, OPS, and even OPS+ are making their way into cases being presented, but for the most part, the stats that have filled the boxscores for years are the bread and butter in salary cases.

Intangibles – Clearly, the player’s performance on the field is the largest factor in determining whether the club or player figure is selected in a salary arbitration hearing, but it is not the only one, special qualities of leadership and “public appeal” can be used. A good example is last year when Ryan Howard's team was able to use a "special accomplishments" provision that allowed them to compare players outside of Howard's service time window. This, however, is rarely done. The exception appears to be pitchers, where agents have been able to make a case that on the day their player pitched, attendance and television ratings were higher. The most notable case was when Dick Moss represented Fernando Valenzuela citing “Fernandomania”.

Injuries – The sides can use injuries (or the lack of them) at hearing. A player that has been on the DL more often than a comparative player can be used by management to make their case for the lower offering figure by a club.

What is Not Admissible in Hearing? – The following outlines what is not allowed at salary arbitration hearing, as defined by the current CBA:

(i) The financial position of the Player and the Club;

(ii) Press comments, testimonials or similar material bearing on the performance of either the Player or the Club, except that recognized annual Player awards for playing excellence shall not be excluded;

(iii) Offers made by either Player or Club prior to arbitration;

(iv) The cost to the parties of their representatives, attorneys, etc.;

(v) Salaries in other sports or occupations.

Salary Arbitration and How it Influences MLB

As mentioned at the outset, salary arbitration almost exclusively benefits the players. Contract agreements have been reached outside the door of the hearing room just before a case is going to be presented to the arbitration panel. Hundreds of millions of dollars will be doled out to these players, with nearly all of them seeing massive pay increases. As one team executive said when asked what he liked about salary arbitration, “What’s there to like about it?” Ask the players.

1 – Finley and Meyer quotes from Lords of the Realm by John Helyar

UPDATED SALARY ARBITRATION NEWS

As of publication today, two more salary arbitration eligible players reached deals with their clubs.

Starting pitcher John Maine reached a 1-year, $2.6 million deal with the New York Mets. The right-hander can earn an additional $25,000 if he pitches 200 or more innings. Maine pulled in $450,000 last season so his raise from 2008 to his 2009 figure as a first year salary arbitration eligible player is 478 percent. He had been seeking $3 million while the Mets were offering $2.2 million in salary arbitration. His $2.6 million salary for 2009 is at exactly the mid-point between the two figures.

Reliever Brian Bruney and the New York Yankees reached a 1-year, $1.25 million agreement today, thus avoiding arbitration. Bruney had been seeking $1.55 million while the Yankees were offering $1.1 million. His $1.25 million for 2009 is $75,000 below the mid-point for the two figures. This is Bruney’s first year of salary arbitration eligibility. Last season he made $725,000. His raise to $1.25 million is a 72 percent increase from last season.

FOR MORE ON SALARY ARBITRATION:

Salary Arbitration Filings Tracker

Salary Arbitration Figures Tracker

Arbitration Scorecard


Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.

Don't forget to register and log in on The Biz of Baseball site to get updates via your in-box, and see information only logged in members can see.

Subscribe to The Biz of Baseball

Add to GoogleAdd to My Yahoo!

Subscribe in Bloglines


 
 
Banner

Poll

Should MLB Force Jeffery Loria to Sell the Marlins?