MLB Arbitration: What does it all mean?

You’ve heard the teams, you’ve heard the players, you’ve heard the numbers. You know it’s another time in baseball when money gets discussed and the dates mean something…but what do you really know about “Arbitration”?

Here’s what most people know: a select few players get the opportunity to negotiate their salary for the coming year and if neither the team nor the player like what the other has to say, they get to go to court, where some lawyer-type makes the decision for them. In a nutshell, that’s about right. But why only some players? How do they figure out the salaries? Should I panic if my team hasn’t agreed to terms with one of our guys and has to go to court? Is this a completely new contract? Why can’t he sign with someone else? These are great questions, and I will try my best to answer them.

1) Why do only a few players go to arbitration?

This has to do with Major League service time. From your rookie year until you hit three years of service time in the big leagues, you’re under the control of your team. They determine your salary, and you have to like it. Okay, you don’t have to like it, but you have to take it. The league minimum for 2014 is $500,000.

After three years though, you get a little bit of leeway. IF your team decides they want to keep you on and tenders you a contract by the non-tender deadline (tender being a fancier word for ‘give’) and you feel like you deserve more, then you have the right to negotiate your salary with the team. This is your arbitration period. You can do this for every year until you have six years of Major League service time under your belt. After six years, you get to be a Free Agent and can negotiate with any team. If your team hasn’t tendered you a contract, then you are a Free Agent and can negotiate with any team.

To recap this section, from years 0-3, the team controls your salary. From years 4-6, you can negotiate your salary with the team you have  a contract with and potentially go to arbitration. After year six, you’re a Free Agent.

2) What happens when you’re “arbitration eligible”?

As mentioned above, from years 4-6 of your Major League career, you are considered “arbitration eligible.” That’s great, but what exactly does that mean?

Let’s say you’ve been playing well for your first couple of years. You’ve hit at a consistent .260-plus average, knocked double-digit homers, and your defensive WAR is pretty great for your limited time in the Majors. You’re making just above league minimum. Most of the other guys who play your position and put up the same numbers as you are making MILLIONS. You just finished your third season.

Your team comes to you with a contract; they love your numbers and feel that you’re an important part of the future. They tell you they’re going to renew your contract at a cool $900,000. You think this is nice, but like we said, there are others who are doing the things you do and getting paid a LOT more for it. You just want what’s fair. You file for arbitration, which is just a formality, and now you and your team actually sit down and talk numbers.

If you and your team agree on a number, that’s great! You sign a contract, get paid your money, and play your season. But if you don’t..

3) Why are they going to court?

You feel like you’re worth, oh, I don’t know, $2.3 million dollars. The team, certainly mindful of their finances, understands that you feel you’re worth more than that 900 grand, and counters with $1.5 million. Figures have been exchanged. Because you two haven’t officially signed a contract for a number yet, you’re scheduled to go to court at sometime between February 1st and February 21st. If you two don’t get your differences settled by then, either with your number, their number, or somewhere in between(which is what usually happens), you go to court where an independent, third party arbitrator takes a look at both cases.

This arbitrator looks at what you feel your worth and what the club feels you’re worth, and then looks at comparable players and how they stack up. From this information, the arbitrator picks either your number or your team’s number, and that’s the price you play at. Rinse and repeat for the next two years.

4) What is a “Super-Two” player?

A “Super-Two” player is a player that is ranked in the top 22% of players who have between two and three years of MLB Service Time plus at least Eighty-Six days(not games) of service time in the prior year. Super-Two players will go to Arbitration four times instead of three. The current cutoff for being Super-Two Eligible is two years and 121 days (2.121; courtesy mlbtraderumors.com) of MLB Service Time.

5) Should I be worried about the arbitration process?

As a fan, no, you don’t really need to be worried about arbitration. If your player is going to arbitration, that at least means he’s going to be playing for your team (barring a trade, of course). If the team and the player go to court over a minuscule difference in figures, that might mean there’s a bit of tension between the two sides. If the player has an outrageously high number picked out for himself, maybe that means he’s got an inflated opinion of himself.

There’s several angles you could read into if you’re the sort that likes to read between the lines on things. Arbitration, however, is just part of the process of being a professional baseball player as outlined by the CBA. If your team has an impressive streak of not going to arbitration hearings with players, that really just means the front office and player understand the worth of one to the other. Aside from that, it’s just a fun trivia question answer.