Salary arbitration in Major League Baseball is arguably more important than free agency, and this year the stakes may never have been higher as the downturn in the economy is front and center for all but a handful clubs.
On Monday, the annual 10-day filing period commences, and with it, millions of dollars will be in the balance. This year, it will be Ryan Howard who will once again look to leverage the system to the fullest. Last year, of the 110 players that filed for salary arbitration, it was Howard that took his case all the way to hearing, and won his case with the Phillies, landing the largest sum of the 2008 arbitration class. The case was a windfall for Howard, and a substantial loss for the Phillies. Howard’s figure was $10 million compared to the Phillies’ offering figure of $7 million. Howard had made $900,000 in 2007, or a raise of 1,011 percent after winning his case.
And Howard isn’t the only Phillie player up for arbitration in 2009. According to Jeff Euston of Cot’s Contracts, the Phillies have the most players that are salary arbitration eligible in all of MLB at 10 (Joe Blanton, 4.016 of service time - Eric Bruntlett, 4.102 of ST - Clay Condrey, 3.012 of ST, Greg Dobbs of ST - Chad Durbin, 4.102 of ST - Cole Hamels, 2.143 of ST - Ryan Howard, 3.145 of ST - Ryan Madson, 5.027 of ST - Shane Victorino, 3.092 of ST, and Jayson Werth, 5.102 of ST)
Watching the headlines on the economy, and seeing how the free agent market has yet to break from its log jam, 2009 – maybe more than any year in recent memory – contract agreements with arb eligible players should be brokered in advance of figures being exchanged, or if at that stage, in advance of hearing.
Salary arbitration is truly an advantage almost exclusive to the players. Of those 110 players who filed last year, the average salary for them jumped from $1.38 million to $3.04 million. Of the 48 players that exchanged figures (see a detailed break down of last year’s filings), the increase in salary was 220 percent.
Is it any wonder that most clubs work our contract agreements in advance of hearings before a panel of arbitors, where they choose either the club figure or player figure only? Most players accept contract extensions at, or below the mid-point between the club and player figures. Clubs, while offering players most assuredly a sizable increase from the salary the player was making the year prior, cut their losses with the moral victory that at least they met the player in the middle or somewhere closer to what they planned to offer.
So, starting Monday, and through the 10-day filing period, watch the flurry of deals get done with those that file for salary arbitration. Players, as well as clubs, are closely watching the FA market, seeing that money and years are expected to be down for all but the marquee players. Eagerness to get inked for extra years, as opposed to gambling in arbitration may set the rank and file in motion (last year, of the 110 players that filed for salary arbitration, sixteen players received multi-year contracts, two more than 2007 and the most since 17 in 2002).
Look for salary arbitration updates regularly leading up to the beginning of season on The Biz of Baseball
Maury 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.
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