Volume 2, Chapter 11
Salary arbitration
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Salary arbitration
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Settle salary disputes between team and player
when negotiations for salary fail
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Eligibility for arbitration: determined by CBA
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According to experience, sometimes performance
Player’s case presented by agent/lawyer
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Submitted to neutral arbitrator, decide precise amount of
compensation
Limited to issues of compensation and rights for players
and the team he plays for
Usually assisted by representatives from players’
association at the hearing
Grievance arbitration: interpret and enforce rights
already created by CBA
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Salary arbitration in MLB
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Eligibility: experience, performance
The Association and the Major League Baseball
Labor Relations Department shall annually select
the arbitrators
A panel of 3 arbitrators in each case
In the event they are unable to agree by January 1 in
any year, they jointly shall request that the
American Arbitration Association furnish them lists
of prominent, professional arbitrators.
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Role of arbitrators
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Consider Performance, leadership, public
appeal, length/consistency of career, previous
salary, salary of similar players,
physical/mental defects, team performance,
attendance
NOT considered: financial position of player
and team, press comments, testimonials
Select offer of either team or player
Can NOT reveal reasons of decision
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Super Two in MLB
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The service time cutoff for Super Two is
determined by the Major League Baseball
Players Association each season, equating to
the senior (service length資歷) 22% of
players who have accrued between two and
three years of service time and at least 86
days of service in the just-completed season
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two years and 122 days at the end of 2010
two years and 139 days at the end of 2009
Arbitration eligible from 3rd to 6th year
FA after 6 years
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Salary arbitration in free agents
(before 2012)
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Another class of arbitration-eligible players:
free agents with >6 years of service
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Original team has option of offering arbitration
A team must offer arbitration in order to get
draft-pick compensation if the FA sign with
other team
If the FA accept arbitration, he is no longer FA
and becomes bound to his current team (usually
ned in prehearing salary agreement)
If the FA reject arbitration (in most cases), he
can sign with any (including his original )team
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Qualifying offer to FA (2013-)
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teams have the option of making qualifying
offers to any players who were with the team
all season long
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Salary: average of the top 125 salaries from the
prior year
$13.3 M in 2012, $14.1 million in 2013
signing a player who has rejected a
qualifying offer lost a first-round pick
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rather than going to the player's old team, it just
disappears.
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Salary arbitration in NHL
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Eligibility: age, experience
Roles of Arbitrator
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‘only’ consider performance, compensation of
players in similar situations
Determine 1- or 2-year contract, salary, bonus,
explanation of reasons for decision
Salary can be either offers or ranging in between
Decision is final and binding on the parties
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Salary arbitration in NHL
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Owners have walk-away right: right to reject
award
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3 times in 2 years, no more than twice in same
year, used only 2 times 1996-2003
Player become FA after rejection, If unable to
obtain better offer from other team, he can return
to previous team with offer prior to becoming
FA
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Comparison of salary
arbitration between NHL and MLB
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Encourage player-owner negotiation
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Very few filed cases go to arbitration
No exchange of briefs before hearing, NHL
require parties to exchange briefs 48 hrs
before hearing
Making reasonable offers
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NHL tend to make extreme offers, knowing
arbitrator likely to choose close to midpoint
MLB tend to make reasonable offers: arbitrator
consider salary higher or lower than midpoint of
both offers
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Comparison of salary
arbitration between NHL and MLB
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Consider performance, salary of comparable players
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NOT financial situation of teams
Rich team pay more  higher salary across league
Not hold player responsible for financial health of team
Salary arbitration NOT set up players’ market, but
rather follows it
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Based on comparable players’ salary, only following
trend set up individually negotiated contracts
Few owners give high salaries, market value of players
rise at such a tremendously fast pace