What is MLB Arbitration, and How Does the MLB Arbitration Process Work?
Since we are fresh off the deadline to tender players a contract, let’s talk about what happens when a players is not tendered a contract, is still talking with the team, but hasn’t come to a contract agreement with the team. That is called arbitration, and it’s a tricky concept.
What is Pre-Arbitration:
In their first 3 years of Major League service time, teams control the salary of the player , but players can voice their opinion. The team has to give them at least the league minimum (2025 league minimum = $760,000). The players get small raises (something like 10k, 20k, etc) as the 3 years progress.
What is MLB Salary Arbitration:
MLB.com/glossary/transactions/salary-arbitration: “Players who have three or more years of Major League service but less than six years of Major League service become eligible for salary arbitration if they do not already have a contract for the next season. Players who have less than three but more than two years of service time can also become arbitration eligible if they meet certain criteria; these are known as "Super Two" players. Players and clubs negotiate over salaries, primarily based on comparable players who have signed contracts in recent seasons. A player's salary can indeed be reduced in arbitration – with 20 percent being the maximum amount by which a salary can be cut.
If the club and player have not agreed on a salary by a deadline (typically in mid-January), the club and player must exchange salary figures for the upcoming season. After the figures are exchanged, a hearing is scheduled (typically in February). If no one-year or multi-year settlement can be reached by the hearing date, the case is brought before a panel of arbitrators. After hearing arguments from both sides, the panel selects either the salary figure of either the player or the club (but not one in between) as the player's salary for the upcoming season.
The week prior to the exchange of arbitration figures is when the vast majority of arbitration cases are avoided, either by agreeing to a one- or multi-year contract. Multi-year deals, in these instances, serve as a means to avoid arbitration for each season that is covered under the new contract.
Once a player becomes eligible for salary arbitration, he is eligible each offseason (assuming he is tendered a contract) until he reaches six years of Major League service. At that point, the player becomes eligible for free agency.”
Basically after a certain number of years, the player gets to negotiate his salary with the team.
How Does a Player Become Eligible for Arbitration:
After 3 years of MLB service time but before 6 years of service time (free agency) a player becomes eligible to negotiate with the team. Service time is measured by the following: A player accumulates service time by spending a day on the Major League 26-man roster or injured list with 172 days equating to one full year of service. If a player is traded during this time, their service time and eligibility travels with them.
MLB Arbitration Rules:
Salaries cannot be cut more than 20 percent in from the year before. Both parties (team and player) have to agree to a contract by around mid-January.
What Happens if They Don’t Agree to a Contract:
If the player and the club cannot agree to a contract by the deadline, they will both go to an arbitration hearing. In these hearings, the team and the player (and his agent) both submit what they think the player (or in the eyes of the player, himself) should earn. Then, they both present their cases unto what they should earn. Then, the impartial arbiter will decide how much money the player will earn. It has to be one of the figures presented by the team or player. It cannot be different or in between
The One Con of Salary Arbitration:
There is one very big con of salary arbitration. It strains the player-team relationship. The team is LITERALLY saying that the player is not as good as he thinks he is. Also, if you wanna re-sign him, DON’T TAKE HIM TO the hearing. Why would a player re-sign with a team that he (the player) thinks doesn’t believe in him.
Now you now what MLB arbitration, and how the process works. Thanks for reading!