MLB Arbitration Explained
What is Arbitration?
You might have heard the term a ton recently, or if not, in recent years around this time. Without boring you with legal jargon, an arbitration hearing is a player, represented by his agent, meeting with the team to settle on a salary. The hearings take place in front of a third party arbitration panel who remains neutral and will end up setting the players salary.
Not all players are eligible for arbitration though. There are three different kinds.
Pre-Arbitration Eligible Players
These players aren't eligible for arbitration because they haven't played a minimum of three years of major league service and are still under team control. They generally don't earn the big bucks as the team will hover around the minimum, and these first years in the league are just meant for the player to maximize their potential. Playing well during these first years despite the low salary will set them up for a large payday increase after their three years. Going to arbitration afterwards can help them get a better salary, but also keep it within range of what the team is willing to offer.
This second class are players who are eligible for arbitration. Generally speaking, these are players with between three and six years of service. Their salary isn't only determined by the team, and if the player and their agent can't come to an agreement with the team, they can take it to arbitration. There's an exception to this however. It's called the Super Two. So, if a player has less than three years of service, they can still enter arbitration hearings if they have more than two years and 86 days of service and are part of the top 22% of players.
The third and final class of players are free agents. Players generally become free agents after six years of service and aren't contractually bound to their team anymore. They can get arbitration if their team has offered them a tendered contract by the tender deadline.
MLB Players Involved
Coming into January, there were still a lot of players who were facing arbitration, but were offered contracts to avoid the hearings. The most notable of these are Cody Allen of the Cleveland Indians. The 29-year-old relief pitcher signed a 1-year $10.575 million deal with the Tribe, a $3 million increase from his salary last season. His fifth season straight with a sub 3.00 ERA is what's responsible for the increase.
Another huge deal that was made was Khris Davis of the Oakland Athletics. The slugger signed a 1-year contract at $10.5 million. The 30-year-old finished last season with 43 home runs and 110 RBIs. The A's still have Kendall Graveman, Chris Hatcher, Liam Hendriks, Josh Phegley, Marcus Semien, and Blake Treinen to come to agreements with, or they're off to arbitration.
Some other notable players who avoided arbitration are Stephen Vogt, who signed a $3.065 million contract with the Milwaukee Brewers, and Zach McAllister, who signed a $2.450 million deal with the Indians.
Still Without Contracts
There are still a number of players who don't have contracts and are facing arbitration. The Houston Astros still have to come to an agreement with Brad Peacock, Collin McHugh, Dallas Keuchel, Evan Gattis, George Springer, Ken Giles, and Lance McCullers Jr. (Super Two) before the deadline. The Chicago Cubs also might see Kris Bryant and Kyle Hendricks go to arbitration.
The Red Sox and Yankees also have some stars unsigned. Drew Pomeranz, Jackie Bradley Jr., Mookie Betts, Sandy Leon, and Xander Bogaerts still don't have a salary for the Sox, and Aaron Hicks, Dellin Betances, Didi Gregorius, Sonny Gray, and Tommy Kahnle are facing arbitration for the Yanks. In the North, the Toronto Blue Jays have Dominic Leone (Super Two), Josh Donaldson, Kevin Pillar, Marcus Stroman, and Roberto Osuna still unsigned.
If teams and players don't come to an agreement by mid-January, both parties will submit their salary propositions to the arbitration panel. Hearings will be taking place at the beginning of February, just before the start of Spring Training.
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