Arbitration Explained

How salary arbitration works
From the good guys at MLB.com

Arbitration is prescribed by Major League Baseball's collective bargaining agreement as a method to determine salaries primarily for players with at least three years but fewer than six years of Major League service time. Also eligible are players in the top 17 percent of the two-years-plus service class and free agents who accepted salary arbitration rather than test the open market.



The filing is a procedural move to preserve rights, but does not preclude the club and player from continuing negotiations. If negotiations do not produce an agreement, the two sides must submit blind salary figures after the filing period. While negotiations may continue, hearings this year have been scheduled from Feb. 1-20 and are held before a three-member arbitration panel that will weigh written and oral arguments from both sides and select one figure or the other, without explanation, to be the player's 2004 salary.

There are six criteria considered by the arbitration panel, which is instructed to assign such weight to the evidence as shall appear appropriate under the circumstances. Nonetheless, the crux of every case is the quality of the player's contribution to the club the previous year and comparative baseball salaries.

The arbitration panel is directed to give particular attention, for comparative salary purposes, to the salaries of players with Major League service time not exceeding one annual service group above the player's annual service group. However, a player with "special accomplishments" may argue comparative salaries of players without regard to service time. Players with five years of service also may argue comparative salaries without regard to service time.

The other criteria are career contribution, past compensation, injuries or other debilitations, and the club's recent performance and attendance as an indication of public acceptance.

Evidence that is not admissible includes the financial condition of the club or player, press comments, offers made by the club or player prior to the hearing and salaries in other sports or occupations.
By Ken Gurnick