A quick primer on baseball's arbitration process and today's filing deadline - BaltimoreBaseball.com
Dan Connolly

A quick primer on baseball’s arbitration process and today’s filing deadline

Photo credit: Joy R. Absalon

This is always a confusing time for baseball fans: The days leading up to the arbitration-exchange deadline, which this year is today at 1 p.m.

Heading into Thursday, the Orioles had nine arbitration-eligible players, but are now down to seven after signing infielder Ryan Flaherty to a $1.8 million deal and T.J. McFarland for $685,000.

Flaherty batted .217 in 176 plate appearances and McFarland had a 6.93 ERA in 16 games pitched. And these guys got raises? What gives?

Well, it’s the way baseball’s economic structure is set up. For the first three years of big-league service (in most cases), players make at or around the league minimum (between $500,000 and $550,000 over the last few years).

Then, from years four to six, players enter the arbitration process, and hefty raises often follow, especially if they have above-average seasons. After six years of service, they can become free agents and test the open market.

If a team wants to retain a player in years four to six, they have to deal with the arbitration process. If not, they just cut those players loose in the offseason (non-tender a contract) and they become free agents able to sign with anyone.

In Flaherty’s case, for instance, the Orioles felt like his versatility and professionalism was worth tendering him a contract. So, they knew he’d be getting a raise – and he got one, going from $1.5 million in 2016 to $1.8 million in 2017 to avoid arbitration.

Today, assuming none of the remaining cases are settled, both sides will file a salary figure and will begin to prepare for an arbitration hearing, which will occur in early February.

A three-person arbitration panel will hear both sides and will choose one of the numbers, which will be that player’s salary in 2017.There’s no middle ground at the hearing. Once it goes to the panel, it’s either one number or the other.

The Orioles may exchange salary numbers with all seven players Friday, but that doesn’t mean they’ll all go to hearings. The sides can continue to negotiate up until the hearing, and the Orioles typically settle with most of their players. And the ones they don’t settle with, they usually beat in the arbitration hearings. The Orioles are 10-1 in hearings since attorney Peter Angelos became majority owner of the team in 1993. The last time the club lost was in 1995 in a case involving pitcher Ben McDonald.

This already is shaping up to be an interesting arbitration season for the Orioles, however. Many of their key players are arbitration eligible: closer Zach Britton, third baseman Manny Machado, starters Chris Tillman and Kevin Gausman, reliever Brad Brach, second baseman Jonathan Schoop and catcher Caleb Joseph.

The website mlbtraderumors.com estimates that those seven will make a combined $44.4 million in 2017, an increase of $23.6 million from last year for those seven.

Here’s a look at what the remaining arb-eligible Orioles made in 2016 (according to the website, Cot’s Baseball Contracts) and what mlbtraderumors.com predicts they’ll make in 2017.

Brach: 2016, $1.25 million; projected 2017, $2.9 million

Britton: 2016, $6.75 million; projected 2017, $11.4 million

Gausman: 2016, $532,000; projected 2017, $3.9 million

Joseph: 2016, $523,500; projected 2017: $1 million

Machado: 2016, $5 million; projected 2017, $11.2 million

Schoop: 2016, $522,500; projected 2017, $3.4 million

Tillman: 2016, $6.225 million; projected 2017, $10.6 million

2 Comments

2 Comments

  1. Boog Robinson Robinson

    January 13, 2017 at 8:18 am

    Great explanation of the process Dan. I don’t believe I ever heard exactly, how the years of service factored into the equation before this article. Thanks!

    • Dan Connolly

      January 13, 2017 at 8:38 am

      Some players with more than two years service time and fewer than three can get an extra year of arbitration, but I didn’t want to make it more confusing. For the most part, it’s 0-3, 4-6 and then free agency.

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