With the major league baseball season now in full swing, there have been many behind-the-scenes off-season processes that have led each club to either a flurry of successes or another season chalked up to a ‘rebuilding process.’ And one of the most vital procedures that greatly impacts each major league baseball team is the ever-confusing salary arbitration process.
So, what exactly is arbitration? For those not well-versed in the world of law, the word arbitration may seem foreign. Well, according to the Merriam-Webster online dictionary the verb, “to arbitrate” is defined as “…the act of settling a dispute between two parties after hearing the arguments and opinions of both.”[1] And essentially, this is exactly what happens in major league baseball. But who are the two different parties and what could they possibly be arguing about?
Well, the two disputing sides include first, a major league club and then typically, a younger player who is under that club’s control. The reason the most publicized arbitration cases include baseball’s youthful superstars is that upon a player being drafted, a team controls that player for six years of service in the major leagues (a year of service being defined as when a player spends 172 days on the big-league roster or the Major League injured list.)[2] And for the first two years of this service time, the club can choose to pay their player whatever they want. This is why young and already trophied players like that of Jeremy Pena are cashing in just above the league minimum of $700,000.[3]
However, once a player reaches three years of service time in the show, they are given the opportunity to negotiate their contract for the coming year with the club that controls them. This eligibility to negotiate salary extends until the player becomes a free agent at the end of their 6 years of service. Hence, by definition, arbitration-eligible players are players in their 3-6 years of MLB service time.
In most arbitration situations, the club and the player come to an agreement before the winter arbitration deadline. This statement resoundingly rang true this past winter as in a record-breaking class of arbitration-ready players only 33 did not come to an agreement with their respective clubs.[4] But in the dicey circumstance where negotiation is not settled before the tender deadline in early December, the respective parties will do what is referred to as exchanging numbers. This means that the club and player will each come up with what they think the player’s salary should be for the upcoming season. These differing figures are then submitted to independent arbitrators, and arguments by the club and the player will be made. Finally, the arbitrators will side with either the club or the player on what salary will best suit the player based on their past contributions to the team.
Obviously, this process can create trifles in the relationship between a player and team who go to an arbitration hearing. As quite literally, the club is trying to devalue their own player and blunt their accomplishments just to win a hearing and save a couple of extra dollars. In fact, many players have come forward to express their distaste for the arbitration process and how their clubs handle the whole procedure. For example, just this year the 2021 Cy Young Award winner Corbin Burnes of the Milwaukee Brewers noted of how the organization was not afraid to place the blame of their 2022 playoff-missing campaign directly on him. Burnes went on to say, “There’s no denying that the relationship is definitely hurt from what [transpired] over the last couple weeks. There’s really no way of getting around that.”
Now although salary arbitration proceedings are uncomfortable and often create riffs between players and their clubs, the intention of this process is one rooted in fair-minded logic. Salary arbitration offers negotiation between players and their teams to decide on proper compensation for a player and their on-field contributions. Despite the creation of some harsh feelings due to stringent motives from those high up in the MLB ladder, salary arbitration provides players with a more reasonable salary than those who are not yet arbitration eligible.
[1] “Definition of Arbitration,” in Merriam-Webster Dictionary, June 7, 2023, https://www.merriam-webster.com/dictionary/arbitration.
[2] Rachel Luba, “MLB Salary Arbitration for Dummies,” September 10, 2020, https://www.youtube.com/watch?v=pJOtCLWXgbg.
[3] Spotrac.com, “Jeremy Pena,” n.d., https://www.spotrac.com/mlb/houston-astros/jeremy-pena-26131/cash-earnings/.
[4] Mark Feinsand, “Arbitration Roundup: 33 Exchange Figures,” MLB.Com, January 14, 2023, https://www.mlb.com/news/mlb-arbitration-deadline-wrapup-2023.