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02-12

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2

Prospectus Feature: The Genius Of Arbitration
by
Eugene Freedman

02-11

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0

The BP Wayback Machine: Arbitration Negotiations
by
Tommy Bennett

01-14

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30

Analyzing A-Rod's Arbitration Case
by
Eugene Freedman

01-10

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34

What Will Happen if Alex Rodriguez Appeals?
by
Eugene Freedman

11-21

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13

Analyzing A-Rod's Arbitration Case
by
Eugene Freedman

10-08

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9

Analyzing A-Rod's Arbitration Case
by
Eugene Freedman

02-14

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0

The BP Wayback Machine: Beating Eric Gagne
by
Gary Huckabay

02-05

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14

Arbitration Showdown: Mock Hearing: Jason Hammel
by
Ian Miller, Doug Thorburn and Ben Lindbergh

02-04

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15

Arbitration Showdown: Mock Hearing: Chase Headley
by
Sam Miller, Jason Wojciechowski and Ben Lindbergh

02-04

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7

Arbitration Showdown: The Insider's Intro
by
John Coppolella

07-03

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7

Overthinking It: Does Arbitration Drive Players Away?
by
Ben Lindbergh

02-20

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5

Bizball: Inside the 2012 Salary Arbitration Class
by
Maury Brown

02-07

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16

Bizball: Salary Arbitration Picture Postcards
by
Maury Brown

01-19

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The BP Wayback Machine: Roger Abrams
by
David Laurila

01-18

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3

The BP Wayback Machine: The Arbitration Process
by
Thomas Gorman

01-19

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10

Transaction Analysis: Arbitration Avoidance
by
Christina Kahrl

01-18

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Transaction Analysis: Votto's Extension and Being Young in New York
by
Christina Kahrl

10-25

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4

Contractual Matters: AL West Arbitration Forecast
by
Jeff Euston

01-20

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9

Transaction Action: International Arbitration Avoidance Day
by
Christina Kahrl

12-04

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18

Arbitration Theory
by
Tommy Bennett

12-02

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35

Prospectus Today: The Risks of Arbitration
by
Joe Sheehan

02-25

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4

The Ledger Domain: Salary Arbitration Beats Free Agency
by
Maury Brown

04-13

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Prospectus Q&A: Roger Abrams
by
David Laurila

01-21

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0

Transaction Analysis: Dodging the Arbitrator
by
Christina Kahrl

02-26

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The Ledger Domain: The 2007 Salary Arbitration Results
by
Maury Brown

02-06

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Transaction Analysis: NL Central Catchup
by
Christina Kahrl

01-18

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0

Prospectus Today: Exchanging Numbers
by
Joe Sheehan

01-31

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0

The Arbitration Process
by
Thomas Gorman

02-11

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Transaction Analysis: January 12-February 6, 2004
by
Christina Kahrl

02-05

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Transaction Analysis: Transaction Analysis, The Wests
by
Christina Kahrl

01-22

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0

6-4-3: Maddux vs. Atlanta - Son of Big Exciting Contest
by
Gary Huckabay

12-13

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The Daily Prospectus: To Offer, or Not to Offer
by
Joe Sheehan

02-10

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Transaction Analysis: January 25-February 4, 2000
by
Christina Kahrl

01-26

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Transaction Analysis: January 18-24, 2000
by
Christina Kahrl

01-22

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Transaction Analysis: January 13-21
by
Christina Kahrl

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February 12, 2015 6:00 am

Prospectus Feature: The Genius Of Arbitration

2

Eugene Freedman

How baseball's unique animal pushes negotiations closer together.

In the past two weeks Mat Latos, Neil Walker, and Jarrod Parker have lost their arbitration hearings and Danny Valencia, Jerry Blevins, and Vance Worley prevailed, determining each of their salaries for the 2015 season. More than a dozen hearings remain before February 20th. Major League Baseball and the Players Association have two types of arbitration in their collective bargaining agreement. The first is grievance arbitration, a common labor-relations dispute-resolution mechanism designed to resolve disputes over the meaning of the negotiated agreement and to deal with disciplinary matters. The other is salary arbitration and it is a rather unique animal.

Salary arbitration is a creation of the collective bargaining agreement and its origin is linked to the reserve clause system. Baseball’s reserve clause is a system that ensures clubs’ unfettered right to control a player for his first six seasons. Historically, it had been much more restrictive, though. Teams could renew players for one additional year after each season, in perpetuity. Curt Flood unsuccessfully challenged the reserve clause to the Supreme Court. See Flood v Kuhn, 407 U.S. 258 (1972). Ultimately, it was upended through a grievance arbitration decision frequently referred to as Messersmith-McNally, after players Andy Messersmith and Dave McNally, who were grievants in the case. The result of Messersmith-McNally was to allow players free agency under certain circumstances. Following the decision, Major League Baseball (“the Clubs”) and the Players Association negotiated a limit to the reserve clause and a process by which players could receive market-like salaries in the years they were under team control. That process is called salary arbitration and it is contained in Article XI, E of the parties’ CBA.

The CBA provides that players with more than three and less than six years of Major League service are eligible for salary arbitration. Additionally, a class called “Super Two” players, with at least two and less than three years of Major League service, are eligible if they have at least 86 days of service during the previous season. They must also rank in the top 22 percent in total service among the players with at least 86 days of service and at least two but less than there years. These service time cutoffs are why clubs are very conscious of when they promote top prospects to the Majors. Such delayed promotions frequently are described as not letting a player’s arbitration clock start ticking.

What makes baseball salary arbitration different from grievance arbitration in the labor-management setting, or arbitration in most other settings, is that it uses a format called final offer arbitration. In most arbitration settings, the arbitrator can craft any decision she feels is appropriate, as long as it conforms to the terms of the agreement and law. In many cases, there is a belief that the arbitrator will “split the baby,” referring to Biblical tale of King Solomon. In final offer arbitration, the parties submit their final offer as their proposed remedy, and the arbitrator is bound to select one offer or the other. The arbitrator has no discretion to fashion a different remedy.

“History attests to the genius of this one-issue process,” said George Cohen, the former Director of the Federal Mediation & Conciliation Service, who served as the MLBPA outside counsel during the 1994-1995 unfair labor practice strike. Cohen said, “at the culmination of an informal, private, expedited hearing the arbitrator must award either the team’s proposed salary or that of the player. And that award is final and binding on all parties. It requires immediate decisions, with no rationale and no precedent.”

Arbitrator Richard I. Bloch, who served as baseball’s grievance arbitrator from 1983 to 1985 and heard baseball salary arbitration cases for nearly 30 years, said that it can be frustrating not to be allowed to justify the award and tell the parties why it was the right decision, but that having no written decision definitely helps with expedition.

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How the percentages show that it behooves management and players to settle their cases.

While looking toward the future with our comprehensive slate of current content, we'd also like to recognize our rich past by drawing upon our extensive (and mostly free) online archive of work dating back to 1997. In an effort to highlight the best of what's gone before, we'll be bringing you a weekly blast from BP's past, introducing or re-introducing you to some of the most informative and entertaining authors who have passed through our virtual halls. If you have fond recollections of a BP piece that you'd like to nominate for re-exposure to a wider audience, send us your suggestion.

Tommy Bennett tried to determine how teams and players come up with the arbitration figures they exchange in the piece reprinted below, which was originally published as an "Expanded Horizons" column on February 2, 2010.

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January 14, 2014 6:00 am

Analyzing A-Rod's Arbitration Case

30

Eugene Freedman

What did we learn from the release of Alex Rodriguez's previously confidential arbitration award?

On Monday, January 13, Alex Rodriguez filed suit against Major League Baseball, the Office of the Commissioner of Baseball, and the Major League Baseball Players Association. After a short oral argument in the United States District Court for the Southern District of New York, Judge William H. Pauley III ordered that A-Rod’s attorneys were required to submit an unredacted and complete version of the previously confidential arbitration award with their filing.

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January 10, 2014 6:11 am

What Will Happen if Alex Rodriguez Appeals?

34

Eugene Freedman

If A-Rod isn't happy with the outcome of his arbitration case, will he have any recourse?

Alex Rodriguez’s attorneys have, at various times, suggested that he will challenge the outcome of his Biogenesis suspension-related grievance arbitration should he not be satisfied with the result—and that only a result of no suspension will be acceptable. (Update: Arbitrator Fredric Horowitz reduced Rodriguez's sentence, but only to 162 games. A-Rod does plan to appeal to federal court.) In a column in November, I wrote, “Courts grant great deference to labor arbitration and arbitrators under what’s referred to as the Steelworkers Trilogy, a series of cases issued by the Supreme Court in 1960.” That is true whether the case involves teamsters in Detroit or Chicago or baseball players in San Diego or New York.

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November 21, 2013 6:01 am

Analyzing A-Rod's Arbitration Case

13

Eugene Freedman

Going public won't help Alex Rodriguez win his case.

On Wednesday, Alex Rodriguez reportedly stormed out of his disciplinary hearing and made various pronouncements to the media, most notably during an interview with Mike Francesa on WFAN and the YES Network. Under normal circumstances, we could see this as his true emotional response to the negative ruling he’d just received (that Commissioner Selig would not be required to testify in the case). But because everything we’ve seen thus far from A-Rod and his team has been so orchestrated, I can interpret this only as a well-rehearsed and well-scheduled event like all of the rest.

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What's the most likely outcome of A-Rod's appeal?

Week one of Alex Rodriguez’s disciplinary hearing has come and gone, with another week likely still remaining to be scheduled around the arbitrator’s other commitments at some point in the near future.

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Performing a postmortem on a high-profile arbitration case from the past.

While looking toward the future with our comprehensive slate of current content, we'd also like to recognize our rich past by drawing upon our extensive (and mostly free) online archive of work dating back to 1997. In an effort to highlight the best of what's gone before, we'll be bringing you a weekly blast from BP's past, introducing or re-introducing you to some of the most informative and entertaining authors who have passed through our virtual halls. If you have fond recollections of a BP piece that you'd like to nominate for re-exposure to a wider audience, send us your suggestion.

We've been conducting mock arbitration cases at BP for the past two weeks, but back in Eric Gagne's heyday, Gary analyzed how his actual hearing might have gone down in the piece reprinted below, which was originally published as a "6-4-3" column on February 28, 2004.
 


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February 5, 2013 10:29 am

Arbitration Showdown: Mock Hearing: Jason Hammel

14

Ian Miller, Doug Thorburn and Ben Lindbergh

The $2.55 million gap between the Orioles' offer and Hammel's request is the largest among the group of players who have not yet signed.

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The Padres' third baseman had a breakout 2012. If he hadn't settled with San Diego, how might his arbitration hearing have gone?

It's salary arbitration season in Major League Baseball, and here at Baseball Prospectus we're holding mock hearings, arguing for or against the actual team/player filing figures before a three-person panel of certified arbitrators. We've selected 10 of this winter's most intriguing, highest-dollar cases to cover in depth over the first two weeks of February (regardless of whether the players' real-life cases remain unsettled). After each side's opening argument and rebuttal/summation below, we'll give you a chance to vote on what you think the result should be before seeing the panel's decision. For more on the arbitration process, read the series intro by Atlanta Braves Assistant GM John Coppolella, listen to his appearance on Episode 35 of Up and In, or check out the BP Basics introduction to arbitration.

In Part One of this 10-part series, we'll tackle San Diego Padres third baseman Chase Headley, who (unbeknownst to our arbitrators) settled with San Diego for $8.575 million last week.

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Atlanta Braves Assistant General Manager John Coppolella kicks off our arbitration series with a look at typical team strategies and his own arbitration experience.

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July 3, 2012 10:15 am

Overthinking It: Does Arbitration Drive Players Away?

7

Ben Lindbergh

Is a team that takes a player to arbitration really running the risk of driving him toward another team down the road?

​"Why did they trade for me if that's what they think?"Yankees left-hander Jim Abbott, after losing a 1993 arbitration case in which the team used a "very negative" presentation

Imagine, for a moment, that you’ve just accepted a job that requires you to join a union. This union is pretty powerful, but there are limits to its power. The main downside of your new deal is that you can’t control your own fate: for your first several years, you won’t get to choose which company you work for or where you spend most of your time.

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February 20, 2012 3:00 am

Bizball: Inside the 2012 Salary Arbitration Class

5

Maury Brown

Taking a deeper look at the players who went through (or threatened to go through) the arbitration process this winter

Salary arbitration is a funny thing. In an era when club owners and COOs are more honed in on cost certainty with contracts than ever, few clubs fully know what player payroll for the upcoming season will be until approximately a month and a half before the season begins. Until each player has reached a contract or gone to hearing in the salary arbitration process, you don’t know what each player will ultimately be paid.

This year, I went diving deeper than ever before in salary arbitration, and for the time, I am making all my data for the 2012 salary arbitration season available for download. Here’s the details, plus an explanation as to why the increases, while large, shouldn’t be too surprising on a certain level.

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