I’m Having an Arbitration

Arbitration is an interesting concept when it applies to baseball. It is one of those somewhat misunderstood aspects of the collective bargaining agreement. Theoretically the purpose of arbitration is two-fold. First it provides a safeguard to minor league players who are drafted by a major league baseball team. Teams retain the rights of a player for 6 years after drafting them. During this time the player is sent to the minor league system where they develop skills that will hopefully allow them to flourish at the major league level. Because of the sometimes long lag from draft day to major league debut, a team needs some sort of guarantee that their investment in raw talent will not go unrewarded. Arbitration allows for this by allowing the team to maintain ownership of their talented players at a relatively known salary rate to provide fiscal clarity for young prospects. The arbitration process has a second and equally valuable aspect. It allows players to see their value increase based performance. This safeguards the player from having his market value stagnate when he comes to the major league level. Arbitration ensures that the player receives fair market value for his services during the time at which a team owns his rights. These were the reasons why arbitration was added to the collective bargaining agreement. There was another hidden benefit to the team that has become an interesting subplot to the off-season.

If a player becomes a free agent at the conclusion of fulfilling their contract, the team may offer the player arbitration. If the player accepts then an arbitrator will determine the fair market value of the player and provide the framework for a one year contract between the player and the team. In previous incarnations of the collective bargaining agreement if a player was not offered arbitration by a specific date then the team could not negotiate and sign the player before May 1 of the next year basically losing the player’s services for half a season. Usually in these cases the team would offer arbitration as a placeholder while negotiating with the player for a longer term but retaining at least an interested party role. With the new collective bargaining agreement recently signed, that rule was eliminated meaning that a team can continue to negotiate with a player and have them available to play as early as opening day. Under the old system, if a team offered a player arbitration and the player declined and signed a free agent contract elsewhere then the team offering arbitration was awarded an additional draft pick at the next year’s amateur draft. The type of draft pick was determined based on several factors that basically made the stars a Type A and the second tier players Type B. The team signing the free agent lost their first round draft pick for signing another team’s Type A player and the team losing the free agent was given a pick between the first and second round as compensation. For Type B signings, the team losing the draft pick was awarded a compensatory selection but the team signing the free agent did not lose their first round pick. How Type A and Type B free agents are defined becomes somewhat of a black art ranking up there with describing the infield fly rule and determining when to award a save to a reliever. The new bargaining agreement eliminated the May 1 service constraint but still requires teams to offer arbitration by a certain date which this year is today. By 8 PM Eastern Time teams must notify the league office which of its free agents will be offered arbitration. Many teams have held off signing free agents to determine whether the player’s former club would offer arbitration so they could determine if compensatory draft choices would be granted. It becomes a game of draft pick roulette when teams sign players before the arbitration deadline.

The Diamondbacks have an interesting dilemma. They have 3 players who are free agents eligible for arbitration. Miguel Batista, Craig Counsell, and Luis Gonzalez. Since Counsell has already signed with the Brewers and was identified as a Type B free agent, the Diamondbacks will receive an extra draft pick for him. The team offered Miguel Batista arbitration feeling that if he accepted the team would get a starting pitcher at a reasonable price for one year. It is believed that Batista is seeking a multi-year contract and that several clubs are interested in giving him more than one year so if Batista signs elsewhere the Diamondbacks would receive a draft choice since Batista too is defined as a Type B free agent. This leaves Luis Gonzalez who has publicly stated on numerous occasions that he would like to finish his career as a Diamondback. The team on the other hand made their intentions well known telling their aging superstar that his services were not wanted at any price. If the team offered Gonzalez arbitration it would go against their message. It could also backfire if Luis accepted arbitration as that would mean the Diamondbacks would be forced to sign him for another year thwarting their youth movement plans. It is further complicated by the fact that Gonzo is a Type A free agent meaning that the team could receive an extra first round draft choice which could come in handy during a youth revival. In the end though the risk was too great that Gonzalez would accept arbitration so the Diamondbacks did not offer him that opportunity meaning that Luis has indeed played his last game as a Diamondback and in exchange Arizona gets no extra draft choices when he signs elsewhere. The Gonzo era is officially over.

Leave a Reply

Your email address will not be published. Required fields are marked *