need credit card high limit fair credit ebay credit card on file chase credit card machine services sams club discover business credit card best credit card bonus offers 201 american express currency exchange credit card cancel credit card bad credit rating furniture stores that offer credit cards pay online exxon mobil credit cards storing credit card information apply for credit card poor credit best airline credit card free flights aarp chase credit card 5 cvn back credit card car repair credit card dispute cheap credit cards for bad credit statistics college dropouts due credit card debt ge money credit card payment center hdfc credit card bill payment online through billdesk credit card debit card abuse felony can you withdraw money atm credit card credit card wage garnishment laws ohio best balance transfer credit cards for average credit intuit credit cards phone credit card rules regulations uk average interest rates on credit cards how to pay down your credit cards can you pay off a loan with a credit card credit card apply online in bangalore chase credit card balance transfer options lowes credit card 5 off tj maxx credit card theft cost walmart credit card canada login page get a credit card with no credit check in australia hsbc best buy credit card online bill pay are sears credit cards hard to get top cash back credit cards canada best rewards points credit card in store credit cards for no credit ing vysya credit card online login get a visa credit card number buy gift credit card online best small business credit card 2012 canadian credit card no foreign transaction fees i need a credit card with no limit lyrics number of active credit cards in the us pay gas company bill credit card apply free visa credit card credit card systems american credit cards in europe 2011 hdfc visa signature credit card reviews tesco credit card advance limit credit card type starting with 3 credit card iphone app square can you buy silver credit card virgin airlines credit card us loft ann taylor credit card credit card low balance transfer life united chase credit card 500000 paying off credit card debt faster quicken credit card account number changed credit card with best bonus miles 0 transfer credit card no fee credit card companies first time users capitol one credit card sign in citibank credit card settlement letter neiman marcus credit card promotion cant pay credit cards what can they do credit cards use hsbc free credit report without a credit card required best interest free credit cards balance transfers mophie marketplace credit card reader for intuit payment happens credit card bills not paid top online credit card merchants rental cars without credit card companies pay rent credit card get points no credit card itunes registration hsbc credit cards bill payment how old do you have to be to sign up for a credit card credit score for bank of america cash rewards card mastercard credit card numbers 2012 how to change paypal credit card victoria secret credit cards hard get best travel rewards credit card 2011 canada apply your first credit card how to get cash with a credit card number ae credit card payment address how to apply a credit card in icici bank compound interest credit card formula visa credit card numbers that work 2011 shell credit card payment phone number credit card paper rolls verifone can you use zappos credit card nordstrom rack virtual credit card terminal australia juniper bank credit card payment icici credit card rules and regulations sbi credit card eligibility chennai chase credit card help how to get atm pin number for citibank credit card metal credit card wallet for men closing out a secured credit card southwest chase credit card customer service phone number how do i cancel my ae credit card capital one credit card account access best reward credit cards 2012 uk will get approved student credit card what info do you need to apply for a credit card credit card companies for small businesses tom cruise suri credit card ge universal credit card payment hsbc credit card payment account number amazon chase credit card points credit card with the best interest rates chase freedom credit card credit score needed rent car no credit check debit card hsbc us credit card rewards best credit card processors american express payment online india credit cards cash advance from chase credit card need credit card for itunes how can i pay my hsbc credit card bill online free credit card clip art logos if have bad credit can still apply credit card disney reward credit card offers target visa credit card info credit card number generator online cvv easiest student credit card to get approved for apply menards credit card online free credit card swipe iphone credit card authorization form template word low apr credit cards for low credit apply for a student credit card canada hsbc credit card contact address uk can i use a credit card in germany secured business credit cards bank america bank lees summit credit card credit cards cash back no annual fees business credit card processing comparison merchants bank credit card vermont how to opt out of chase credit card offers 0 apr on balance transfers credit cards british air credit card 50 000 credit card visa mastercard uob credit card malaysia balance transfer city bank credit cards login credit card repayment cover halifax eddie bauer credit card application southwest airlines credit card review 2011 free printable play credit cards kids standard chartered bank gold credit card can you use business credit cards for personal use hsbc credit card customer service number easy approval credit cards fair credit top 10 credit card companies india chase credit card fees international purchases credit card form example first premier bank card credit card mobile phone credit card payments small business credit card comparisons apply for room to go credit card get help paying credit card debt target credit card log in page virgin credit card uk contact bank of america american express credit card pay online best credit card rewards 2012 canada bealls outlet credit card payment online apply amazon credit card where can i buy preloaded credit card bank america credit card convenience checks received can you pay mortgage with credit card for reward points update credit card information apple id my name peggy credit card commercial chase credit card offer amazon buy credit card imprint machine sending money through western union credit card treated cash advance credit card harassment philippines how many numbers are in a credit card number example credit card picture bank america everyday rewards qantas credit card login credit card declined on amazon low balance transfer credit card australia debit and credit card processing services carecredit credit card login preloaded visa credit cards canada maximum interest rate credit cards india capital one hbc credit card mailing address best credit card deals 0 interest who offers credit cards after bankruptcy paypal gift using credit card american credit card solution negotiating credit card debt with capital one sam club credit card online payment top 5 credit card processing companies regions visa credit card payment credit cards google compare credit score amazon rewards credit card low carbon credit card figure out finance charge credit card digital dining credit card processing brandsmart credit card log refinance credit card rates cimb credit card redemption form personal credit cards for bad credit credit card debt calculator cnn can you pay your lowes credit card in store vector credit card logos eps free online credit card application india accept credit card payment online india best credit card offers instant approval credit cards payoff calculator excel apply online for icici credit cards india hsbc premier credit card offers sri lanka starwood rewards credit card review bank of america credit card balance number chevrolet texaco credit card first premier credit card contact number applying credit cards bad credit australia best deals on credit cards ireland boi platinum advantage credit card credit card easy to get approval credit card settlement letter sample how to pay your wells fargo credit card how to apply for credit cards with bad credit best way get high limit credit card can you use prepaid credit card buy online cap one credit cards free catalog credit cards standard chartered platinum credit card benefits bank of america activate credit card online airline card credit mile shell gas rewards credit cards consumer credit card act can you pay credit card western union money american advantage credit card login credit card opt out rate increase low rate credit card laws against credit card harassment hdfc credit card bill payment using netbanking credit card rankings gold platinum us government debt relief credit card gateway credit card processor how do i opt out of chase credit card offers hdfc signature credit card reward points catalogue credit card advertisements how can i cancel my first premier credit card circle k credit card application credit cards people bad credit bankruptcy wal mart credit card payment european credit card chip pin cash back business credit cards canada how long should i keep credit card statements canada how to use a prepaid credit card online get business credit card bad personal credit best credit card company for first time users 0 transfer balance credit card j.d. power;s annual credit card rankings banana republic visa credit card payment best visa credit card for travel credit card merchant services comparison uk band of america credit card account credit card with instant online approval pay aerie credit card bank of america credit card fees exxon mobil credit card online can you claim credit cards bankruptcy nordstrom card credit services merchant account credit card machine one one credit card deals long does take verify credit card paypal first american credit card services wells fargo retail store credit card payment direct credit card hsbc prepaid us credit card non us citizen what does cvv stand for on a credit card credit cards gas only do credit card rfid blocking sleeves work credit card settlement better than charge off where can i get a credit card with a bad credit rating credit card complaints federal government my capital one credit card payment due paypal payflow pro credit card gateway credit cards for bad debtors can you use magnetic money clip credit cards can you pay mortgage credit card points 2009 capital one credit card agreement third party credit card processors citi credit card account logon if you close a credit card does it affect your credit score citi credit card online application status shell gas credit card bill pay credit card lawsuit defense nj uob credit card application status enquiry capital one venture credit card promotion easy to get approved credit cards compare credit cards for international travel imvu credits debit card miles rewards credit cards credit cards compare uk how to cash out money from credit card credit card student bad credit dubai first credit card statement western union prepaid mastercard card debit card prepaid credit card paying off your credit card every month credit score citi bp oil credit card credit card legislation effective date the room place credit card phone number what is a credit card cash advance apply for instant credit card online best credit cards to get free flights reloadable pre paid credit card canada quickbooks credit card receipt printer usb credit card swiper for paypal is it bad to close a credit card with a zero balance cheapest rate credit cards ireland what frequency are credit card rfid american airlines aadvantage citibank credit cards long should you keep your credit card statements best first credit card for college students 2012 anz credit card travel promotion credit cards with airline mileage rewards fake credit card info netflix sam;s club credit card discover login iphone 5 credit card case case mate best low credit credit card calculate minimum payment credit card bill alaska airlines credit card free companion fare credit card consolidation payment calculator do ikea charge for credit card safe credit union secured credit card paying off credit card debt increase credit score good credit cards students bad credit nfc credit card payment how to stop receiving credit card offers in the mail list of credit card issuing banks lucky credit card problem sallie mae 5 percent credit card citibank india pay credit card bill ac-wfnnb credit card-check pymt credit card picture twitter chase travel plus rewards credit card airline credit card offers with no annual fee citibank india credit card points rewards tata indicom online payment through credit card pay my office max credit card promotion credit card mile compare credit card offers australia chase credit card travel insurance transfer balance credit cards with ok credit credit cards usage tips chase credit card lost stolen phone number barclays black visa credit card guaranteed credit card approval secure internet credit card payment iberia bank credit card sign iberia credit card offers pay gap visa credit card online do banks calculate minimum payment credit card credit card comparison chart 2011 king size credit card application medium high risk credit cards how long should i wait to apply for a credit card after being denied pay credit card debt with 401k first premier bank prepaid credit card credit card verification code xbox live smartswipe credit card reader what happens if i dont pay my credit card in full running debit card as credit or debit how to opt out of pre approved credit card offers amex credit card offers sri lanka can you pay for a used car with a credit card is capital one a good credit card after bankruptcy online application for target credit card best 0 credit cards balance transfer cost of using marks and spencer credit card abroad which is the best credit card to get after a bankruptcy zero percent interest on balance transfer credit cards how can i stop credit card offers apply frost bank credit card how to make a fabric credit card holder compare canadian credit cards 2010 valid credit card generator with expiration date transfer credit card balances another card american express corporate credit card application status does paying off credit cards help credit score credit cards for people with no credit history and low apr continental chase credit card bonus miles citibank credit card singapore for foreigners free excel credit card calculator best credit card reward programs for travel check your balance capital one credit card visa prepaid credit card gift pay my chase toys r us credit card citibank credit cards customer service phone navy federal credit union credit card rewards credit card statistics wells fargo rewards credit card limit can i apply for a credit card with no job credit card free flight southwest 100 free dating sites no credit card needed how to track icici credit card application status the roomstore credit card pay online accepted credit cards at costco can i pay my taxes with a credit card in canada virtual credit card bank transfer balance transfer credit card for fair credit rating need credit card number itunes account td green credit cards pay tire kingdom credit card online credit card limit 2000 serve credit card funding limit free merchant credit card machines credit cards credit union banks transfer credit card debt to someone else netflix trial without credit card ps3 no fees on balance transfers credit card facebook credit gift cards walmart best business credit card small business rewards hsbc platinum credit card privileges barclaycard credit online payment best 0 intro apr credit cards best no annual fee credit card rewards transferring credit card balances smart american express delta credit card reserve inurl product_id & intext we accept the following credit cards how old do you have to be in order to have a credit card american airlines credit card payment check balance walmart store credit card free credit cards cash advance watch full movies online for free no credit cards credit card for military overseas type of credit card best usairways credit cards obama credit card debt relief cnn disposable credit cards ireland credit card interest tax deductible government credit card reduction programs credit card act prepaid cards free credit card numbers front and back credit card with travel insurance uk staples business credit card account online credit card credit score requirements credit cards 0 apr post office credit card transfer to current account credit card balance transfer whats the account number on a credit card menards big card credit application get off credit card company mailing list what is credit card billing address process credit card payments your website credit card free abroad how to get a credit card at 18 with no job standard chartered hong kong credit card promotion high limit credit cards with average credit credit card manual imprinter kay jewelers credit card contact number avoid credit card problems abroad nyt number on back of credit card visa can i be sued for unsecured credit card debt student credit cards no credit no annual fee credit card debt resolution creditors college student credit card debt statistics 2012 merchants tire credit card payment online card consolidation credit loan leather iphone 4 case credit cards credit card imprint machine use credit card processing services reviews best credit card to rebuild credit rating credit card promotional offers australia macys credit card online case mate credit card case blackberry office depot personal credit card account online applied credit card now want cancel track your credit card spending new york state credit card law business gas credit cards without personal guarantee how to change your credit card for android market scb credit card reward points itunes credit card security code invalid often doo credit cards charge interest paying federal income taxes by credit card african bank blue credit card limit increase netsecure smartswipe credit card reader hack can i pay rent with credit card lost job cant pay credit cards credit card sleeves rfid blocking accepting credit card payment paypal best credit cards for poor credit business credit cards rewards cash back can you send money with credit card through paypal credit card skimmers at gas stations good credit cards earn airline miles can i buy a bestbuy gift card with my best buy credit card is it easy to get a gas credit card tj maxx credit card pay online slate credit card reviews i want to pay my kohls credit card can you apply best buy credit card online sears credit card application discount petland credit card
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 1257 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?