blain;s farm and fleet credit card login credit card service tax malaysia chase credit card application phone number how to download free apps for iphone 4 without credit card lowes credit card login mobile pay my disney chase credit card fleet credit card services what credit card is best for students credit cards to build credit score mint credit card change of address how can i lower credit card payments canadian credit cards low rate can buy stuff online prepaid credit card city bank credit card japan can joint checking accounts be garnished for credit card debt credit cards for bad credit uk if i dont pay my credit card bill what happens gap visa credit card payment center mens warehouse perfect fit credit card commerce bank credit card offers juniper credit card bill payment unsecured bad credit credit cards instant approval compare credit card rewards singapore bank of america american express credit card contact credit card for merchants best credit cards credit score 700 citi card credit card payment iphone case credit card pouch hdfc bank platinum credit card citibank credit cards india toll free number should i close my zero balance credit cards long does take get debit card credit union bank of america student platinum plus credit card how to apply for credit card in sbi fia credit card customer service does walmart offer credit cards do you have too much credit card debt which credit card is best for rewards best deal on credit cards uk interest credit cards tax deductible business requirements applying credit card citibank is paying an annual fee on a credit card worth it credit card for poor credit history credit card swipe machine bangalore standard chartered bank credit card status of application discover secured credit card review cheap credit card balance transfer ireland city bank credit cards login bank of america aaa credit card log on capital one venture card credit limits army regulation government credit card identity theft credit card fraud...punishment ny co credit card customer service number create itune account without credit card first data credit card processing customer service capital one close credit card american express credit card login online stop credit card checks mail hsbc credit card bill online payment options nationwide credit card free use abroad best visa credit card for travel lloyds tsb business credit card online itunes gift card credit card chase united credit card customer service number manhattan credit card application form singapore how do i change credit card on iphone icici credit card without annual fee choose default credit card amazon settle credit card debt affect on credit score 0 interest credit cards halifax do secured credit cards build credit forward citi credit card review deutsche credit card platinum best credit card swiper for android visa credit card no foreign transaction fees when to pay off credit cards fidelity credit card rewards 529 how to use your first credit card pier one credit card customer service phone credit card app canadian banks offer prepaid credit cards citifinancial credit card pay online best capital one credit card international travel best credit card sign up bonus ever psn credit card number not valid how to reduce credit card debt by 70 percent first data credit card machine paper do credit card balances affect your credit score hsbc credit card platinum offer credit score do need capital one credit card rewards 660 credit card website nfc phone read credit card opt out credit card deals do i need to use my visa card to build credit maybank credit card advance cash leather iphone case with credit card holder benefits do credit cards offer merchants how can i pay off my credit cards fast there government help credit card debt does citibank credit card cover rental car insurance victoria secret credit card number what is the credit card number on a debit card gas credit cards with poor credit how do i pay my pnc credit card bill should i use a student loan to pay off credit card debt what type of credit score do you need to get a walmart credit card secured credit card listings american express credit card black card hardship credit card programs gucci mens credit card holder ipad itunes no credit card fake visa credit card number and security code can i pay my wells fargo student loan with a credit card citi thank you credit card review if you pay credit card one day late; what is the best credit card company for college students chase united mileage plus credit card benefits apply credit card visa bad credit free valid credit cards details capital one student rewards credit card does consolidating credit cards hurt credit score easy get department store credit cards bad credit credit card bin database list playstation store change credit card information long does take apply credit card uk walmart discover credit card application poor credit credit card no annual fee is it bad for your credit to apply for a credit card gateway credit card processing reviews interest free credit card purchases what is a finance charge on a credit card statement what is the point of a secured credit card halifax credit card minimum payment percentage should you pay credit cards mortgage chip and pin credit card france hdfc credit card shopping offers open university hong kong credit card nra credit card designs line of credit vs credit card debt icici bank credit card offers on flights what are the major banks that offer credit cards in the philippines add credit card paypal different country what is the best american express credit card best reloadable credit card canada personal credit card processing services credit card approvals after bankruptcy mastercards credit cards numbers list credit card numbers names apply for a bp gas credit card what is the difference between using a credit card and a debit card hdfc credit card bill payment billdesk southwest rapid rewards credit card plus vs premier hsbc discover credit card login credit cards for good credit scores uk jp morgan chase commercial credit card payment credit card no balance transfer fee 2010 visa business credit card canada international transaction fee free credit card best credit card readers for cell phones do prepaid credit cards work for online shopping can you pay your victoria secret credit card online american express platinum credit card south africa mobile credit card terminal capital one student rewards credit card credit limit hilton citi credit card login best travel reward credit cards 2012 canada credit card relief now reviews bofa small business credit cards bank credit card codes better use cash credit cards europe iphone 5 credit card payment asiana airline visa credit card credit cards deals australia credit card processing companies lowest rates deutsche credit card visa servizio clienti balance transfer credit card deals australia credit cards for student loans bank of the west credit card center how do i figure out what my credit card payment will be unsecured credit cards for poor credit score best airmiles credit card 2011 uk credit card flash drive custom saks fifth ave credit card payment valid visa credit card number free free credit card codes information best unsecured credit cards after bankruptcy discharge unsecured post bankruptcy credit cards free virtual credit card paypal verify credit card minimum repayment bank of america rewards credit card review best rewards credit card for fair credit prepaid best credit cards small business rewards offers taking credit card payments on my website best thank you rewards credit card credit cards hsbc apply internet merchant services credit card processing wireless credit card swiper need pay walmart credit card bill need mastercard bad credit no bank account working credit card number generator 2011 free vcc credit cards instant approval bad credit no deposit what is a security code on a credit card low credit card rates offers my credit card has been used fraudulently longest credit card 0 purchases what is a secured credit card and how does it work credit cards with zero interest on balance transfers chrysler jeep dodge credit card partially secured credit cards bad credit people how do i pay my irs bill with a credit card teenage credit card application credit card iphone app best ge money walmart credit card payment address kroger credit card payment online apply tribute gold mastercard credit card credit card risk management tools southwest chase visa credit card sign in citibank credit card identifier names of major credit cards ge money discount tire credit card login conoco76 phillips 66 credit card best credit cards after chapter 7 bankruptcy credit card machine paper rolls credit card reward program compare low rate credit cards for people with bad credit can use my halifax credit card abroad aarp credit card chase can you freeze your credit card account check my credit score free without credit card transfer money from credit card to bank account india cooperative bank credit card payment credit card issuer identifier best card for someone with fair credit rating pay rent online using credit card how to setup credit card machine for business southwest credit cards rewards apply for chase credit card student free verizon phone no credit card needed credit card reform act summary 2012 hdfc credit card reward point redemption canadian credit card has best rewards program add credit card to paypal different country harley credit card holder chase credit card identity theft protection can your wages be garnished for credit card debt in georgia interest free money transfer credit cards credit card reform act of 2009 wikipedia credit card calculator monthly interest payments most recommended credit cards can u pay rent with a credit card virgin money credit cards contact citibank secured credit card application status small business credit cards no personal credit hdfc online credit card application status credit carding slang value city furniture credit cards platinum zero percent interest balance transfer credit card offers legacy visa credit card log find billing address credit card lic premium payment through hdfc credit card what is a real credit card number and security code boston college alumni credit card stolen credit card information internet arhaus credit card access best credit card processing company in canada is it bad to have a lot of store credit cards pay icici credit cards online best credit cards for flying points hsbc credit card website credit score do need best buy card how long will it take to pay off $50000 in credit card debt credit card fees paypal transaction bdo credit card requirements ofw secured credit card line of credit worst credit card debt citibank business credit card application status credit card india citibank free psychic reading phone no credit card credit card visa number format visa prepaid credit card walmart safe send credit card number through email mbna american express rewards credit card ibc credit card payment continental airlines credit card 50 000 bonus miles best small business credit cards with rewards potterybarn kids credit card login frequent flyer credit card best credit cards australia what happens when you can;t pay your credit cards best rates on credit cards in canada hdfc visa gold credit card rewards close credit card account letter uk what are credit card convenience checks credit card embossing machine chase bank credit cards phone number westpac credit card insurance premium will american credit cards work in canada credit card interest rate calculator payment paypal business account accept credit cards pay buckle credit card bill i need a credit card right now how do i know what credit card is right for me airline reward credit card business credit cards miles quickbooks credit card processing kit reviews amazon chase credit card apply safe shop online credit card union plus credit card payment phone number credit card manual imprinter uk best credit card offer online secured credit cards for business bank of america free valid credit card numbers that work online secured credit card reports credit agency need credit card fast but have bad credit approved student credit card no foreign transaction fee card consolidate credit debt hypercom credit card machine instructions pay off 2nd mortgage credit cards what are the major credit card companies how to check the status of my capital one credit card application make credit card wallet tire credit card for bad credit credit cards for rebuilding credit canada no more credit card offers mail bank america student platinum plus visa credit card review discover credit card security code location credit cards for someone with no credit history wells fargo mor credit card reducing interest rates on credit cards what are the major banks that offer credit cards in india standard bank credit card holders specials process credit card payments iphone how can i get a credit card without any credit history buy vending machine credit card standard chartered manhattan credit card cash back list banks offer secured credit card no credit card car hire malaga luhn credit card validation javascript things consider before choosing credit card aaa platinum plus gas rebate credit card best credit card offer in malaysia department store credit cards low credit scores can minors get credit cards money magazine credit card awards 2011 get chase credit card checks unsecured credit cards college students bad credit virgin atlantic credit card free flight sams club discover personal credit card best credit card for college student to establish credit can you ask lower interest rate credit cards happens credit card debt you file bankruptcy credit card or debit card credit card processing fees refund chase student credit card karma points will transferring credit card balances hurt my credit score college students credit cards statistics 0 apr credit card best credit card have build credit working credit card numbers september 2012 prepaid credit card travel usa average interest rate credit cards now pay citibank credit card bill payment online immediate cash advance on credit cards payment credit card industry data security standards air miles credit card review average american credit card rate how to pay your credit card bill online hsbc online casino no credit card musicians friend credit card hard get 10 000 credit card debt relief obama joint credit card application chase dillards credit card payment login not using a credit card hurt credit score cash advance credit cards bank citizens banks credit card jcb credit card australia average monthly minimum credit card payment credit card payments reported irs beginning 2011 webster bank visa credit card best rate credit cards processing credit card industry facts personal debt statistics make a credit card payment how do you calculate interest rate on a credit card when was the first plastic credit card issued irs credit card debt settlement credit card cases metal business credit cards rewards way vending machine credit card acceptance can you have someone cosign credit card what is a good credit card to get pays credit card swipe fees unsecured credit card offer bad credit credit card reform act summary 2009 best credit card offers in the uk credit card money transfer offers venture credit card contact min payment credit card calculator credit cards for bad credit with no checking account required chase bank credit card contact info verify paypal without credit card or. bank credit cards to build your credit up how does a bank of america secured credit card work how fast can i get approved for a credit card bank of america credit card services contact us department store credit card interest rates checks mail credit card companies select comfort credit card ge know before getting first credit card bank of america american express credit card pay online new credit card law 2010 summons to appear in court for credit card debt walmart credit card account management credit card black alaska air mile credit card art van credit card payment address pre qualified credit card credit score low interest credit card balance transfer canada hsbc premier credit card rewards hong kong business cost of accepting credit cards prepaid credit cards krogers credit card payoff calculators free 1st premier credit cards apply macy;s credit card online the most prestigious credit cards pacsun credit card review amazon chase credit card $30 log my sears credit card account credit card imprint machine ways earn points credit cards how do i pay my credit card with paypal bobs furniture credit card phone number big lots credit card account pin and chip credit card what type of credit card starts with 4313 card consolidation credit debt unsecured chase business credit cards online how to answer a credit card lawsuit in california orange and barclaycard launch contactless credit card fair credit visa cards canada credit gift cards credit card processing using smart phone credit card applications bad credit unsecured toys r us credit card ge walmart credit card balance do secured credit cards help establish credit track 1 track 2 track 3 credit card ing vysya credit card online login saks fifth avenue credit card pay online card credit bcr average credit card swipe fees helzberg credit card review gifts reward points icici credit cards credit card low apr bad credit annual fee instant approval credit card bad credit where else can i use my new york and company credit card best credit card on the market today visa credit card offers uk orchard credit card online login build credit card history credit cards are bad for college students time period to dispute credit card charge best unsecured credit card for no credit first national credit card customer service apply for bank of america business credit card ebay pay by credit card not paypal bank america credit card pre qualification credit card processor cancellation fee desert school credit union credit cards low apr credit card no credit history asda santander credit card login debt payoff calculator credit card buy lr with credit card online this credit card has been denied by the bank that issued it business credit card resources credit cards 0 apr for 15 months can get secured credit card while consumer proposal can use prepaid credit cards paypal discover credit card account center login can you claim credit cards bankruptcy credit card sales slips apply credit card student no income student credit card gas rebate chase credit card offer chase bank amazon credit card online cvv generator for credit cards best starter credit card 2011 get paid online credit cards priceline credit card reviews free prepaid credit cards no fees uk old navy credit card account payment why do lidl not accept credit cards hsbc credit card customer care email address first tennessee bank credit card 0 percent balance transfer credit cards canada what are some good credit card offers google checkout sandbox credit card number can you pay off a mortgage with a credit card how to activate my wells fargo credit card bloomingdales credit card discount how can i pay my toys r us 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 330 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?