Deciphering the MLB Arbitration Process


The World Series is set to start, and that means the Major League Baseball season is nearly at it’s end. After the final series of the year, baseball will move on to free agency, where a lot of wheeling and dealing will be done between players and teams. In addition to the free market, one of the most common terms baseball fans will hear over the next few months will be “arbitration”. The MLB arbitration process may seem complicated from the outside, but it can be much simpler than it actually appears. Let’s attempt to decipher the process to clear up any lingering questions.

The arbitration process is fairly exclusive, and not every player is eligible every season. A player is eligible for arbitration when they have exceeded three years of Major League service time, but have not yet surpassed six total years of service time. For example, San Francisco Giants‘ shortstop Brandon Crawford has 4.094 years of service time, and first baseman Brandon Belt has 4.128. Both players are eligible for arbitration this year under that criteria.

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NOTE: Service time is normally written as a decimal, so 4.094 years of service time is four years, and 94 days. Also, a full year of service time is 172 days, while an MLB season generally lasts 183 days (162 games, plus 21 off-days). That is why the Chicago Cubs held Kris Bryant down in the minor leagues for two weeks at the beginning of the season. At the end of his sixth season, Bryant won’t technically have six complete years of service time, delaying his free agency for an extra year.

After reaching six years of service time, a player can become a free agent, available to sign with any team.

There are ways for teams to “buy out” a player’s arbitration years. Giants’ catcher Buster Posey signed a nine-year deal before the 2013 season, putting him under team control until the 2021 season. The Giants bought out their catcher’s arbitration years, and also made it so he wouldn’t hit the open market when he surpassed six years of big league service time.

So what happens when a player does hit arbitration eligibilty? In January, before the season begins, an arbitration-eligible player and his team will exchange salary figures with each other, attempting to come to terms on a salary for the upcoming season. The two sides will have around two weeks to negotiate after figures have to be submitted, and in most cases, the two sides will come to terms, usually meeting in the middle.

For example, Crawford and the Giants went to arbitration last offseason. Crawford submitted a sum of $3.95 million, while the Giants countered with their own offer of $2.4 million. The two sides negotiated, and reached an agreement on a $3.175 million contract for the 2015 season, right in the middle of the two side’s initial offers.

Sometimes, in fairly rare cases, the two sides can not come to terms, and will go to an arbitration hearing. In such a situation, the player and the team will present their respective cases to an arbitration panel, consisting of three people. The panel will select one side’s salary submission to award the player. In a hearing, there is no “meeting in the middle”. The panel selects only from the two submitted figures. So going with the previous example scenario, the panel would select either Crawford’s $6 million, or the Giants’ $5 million.

The vast majority of cases are settled before a hearing ever occurs. In the previous offseason, 175 players filed for arbitration, and only 14 went far enough to be heard by the panel. Of those 14 cases, eight went in favor of the team, while six went in the player’s favor. That is about normal, as teams win about 57 percent of cases.

There is an exception to the “three-year minimum, six-year maximum” rule for arbitration. There are cases where a player is considered a “Super Two” player, making them arbitration eligible before they hit that three-year threshold. A player with between two and three years of service can become eligible, if they rank in the top 22 percent of players in that criteria, in terms of service time. Since 2009, the average service time required for a player to reach “Super Two” status is 2.134 years.

When Bryant’s sixth season is complete, he’ll be just shy of six years of service time, and won’t be eligible for free agency because he was held down for those two weeks at the start of the year. However, at the end of his third season, he will almost certainly be eligible for arbitration as a “Super Two”, because of how close he’d be to three full years. Over the course of the beginning of his career, Bryant will be eligible for arbitration four times, rather than the traditional three.

The arbitration process seems like a lot to understand from the outside, but it’s much simpler than it looks. The arbitration process will be starting soon, and hopefully this little guide can help clear up any misconceptions or questions surrounding the process.

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