How Does Baseball Arbitration Work?

Find out how baseball arbitration works, how it’s used to determine player salaries, and why it’s become such a controversial issue in recent years.

Introduction

Arbitration is a process whereby a player and team can each submit a salary figure to an independent arbitrator, who will then choose one of the two figures as the player’s salary for the upcoming season. The key word here is “independent” – the arbitrator is not beholden to either side and is free to choose whichever figure he or she believes to be more accurate.

This system was put in place in 1974 as part of the first collective bargaining agreement between MLB and the Major League Baseball Players Association (MLBPA). It was seen as a way to avoid the threat of strike action by giving players a fair hearing when it came to their contract negotiations.

The process begins with each side submitting their figure to the American Arbitration Association (AAA), which then appoints an arbitrator. The two sides then present their cases to the arbitrator, who will make a decision based on the evidence presented.

If the arbitrator decides in favor of the player, then that is the salary that he will receive for the upcoming season. If, however, the arbitrator decides in favor of the team, then the player will only receive whatever salary was proposed by the team. In either case, both sides are bound by the decision of the arbitrator and cannot negotiate further on that particular contract issue.

It should be noted that sometimes teams will try to lowball their initial offer knowing that they are likely to lose in arbitration, but that they will still end up paying less than they would have if they had gone to trial. In such cases, it is up to the arbitrator to decide whether or not to award more money to the player based on how much he believes that player is actually worth.

What is baseball arbitration?

In baseball, arbitration is a process by which a player and team can have a salary dispute heard and resolved by an independent arbitrator. The arbitrator will hear both sides of the argument and then render a decision that is binding on both parties.

This process is typically used when the two sides cannot come to an agreement on a new contract, or when there is a disagreement over the terms of a existing contract.

salary arbitration began in baseball in 1974, and it has been used extensively since then to help resolve disputes between players and teams. Major League Baseball has a detailed set of rules governing how arbitration works, and these rules are set forth in the collective bargaining agreement between MLB and the MLB Players Association.

Players who are eligible for arbitration are typically those who have accrued at least three years of major league service time, or who have been in the majors for less than three years but have more than two years of service time and are not subject to the Renewal Rule.

Players with less than three years of service time can also be eligible for arbitration if they meet certain other criteria, such as being among the top 22% in terms of service time among all players who have accrued between two and three years of service.

How does baseball arbitration work?

In baseball arbitration, players and teams exchange salary figures, and if they are unable to agree on a number, an arbitrator will choose one or the other. The arbitrator must choose one of the two numbers, and cannot split the difference. This system is used to avoid lengthy and costly holdouts or negotiating sessions during the off-season.

Who is eligible for baseball arbitration?

Any player with three or more years of MLB service time who is not eligible for free agency is eligible for arbitration, although teams can choose to non-tender a player, making them a free agent, instead. Once a player is eligible for arbitration, they can be “renewed” by their team for one year at or near the minimum salary. Afterwards, they can be arbitration-eligible for up to four more seasons.

What are the benefits of baseball arbitration?

There are a number of benefits to baseball arbitration. First, it is a relatively quick and efficient way to resolve disputes between players and teams. Second, it allows both sides to present their case before a neutral third party. This can help to ensure that the final decision is fair and reasonable. Finally, baseball arbitration can help to avoid lengthy and expensive litigation.

What are the drawbacks of baseball arbitration?

The main drawback of baseball arbitration is that it can be very expensive. For example, if a player is seeking $5 million in arbitration and the team is offering $3 million, the arbitrator will choose one number or the other. The player or the team can then accept that decision or walk away from it, but they cannot negotiate a compromise.

Conclusion

In baseball arbitration, teams and players submit their “final offers” to an independent arbitrator, who then picks one or the other. It’s basically like having a trial without the court system.

The big benefit of arbitration is that it can help avoid protracted contract negotiations that can drag on for months (or even years). And because both sides have to live with the arbitrator’s decision, it tends to lead to more reasonable contracts than if either side just went ahead and signed whatever they wanted.

Overall, baseball arbitration is a pretty efficient way to handle player contracts. It’s not perfect, but it’s a lot better than the alternative.