Salary Arbitration Hearings: A Blue Jays History And How They Work

A portion of this story was published last year. As we've got a bunch of new folks hanging around here (and because of massive confusions on the Twitterwebs), I figured that it'd be worth it to put this up now.

Salary Arbitration Hearings: A Blue Jays History

Seems like a few good players made that arbitration list, with the Jays' all time arbitration record (from the club's perspective) sitting at 5-3, a healthy .625 winning percentage, better than the MLB average of .590 (see this great article on Hardball Times). The source was my copy of the Toronto Blue Jays Official Guide 2000--this part of the book should still be up-to-date for at least another couple of weeks or so!

This offseason, the Blue Jays have two players with whom they are heading towards arbitration hearings:

• Brandon Morrow (RHP) asked for $4.2MM, club offered $3.9MM (7% difference).
• Casey Janssen (RHP) asked for $2.2MM, club offered $1.8MM (18% difference).

How Salary Arbitration Hearings Work

When a player and a team fail to come to an agreement before January 17, then the two must exchange salary figures for a one-year, non-guaranteed contract and prepare for arbitration hearings in February. A non-guaranteed contract simply means that if the player is released in Spring Training, he only gets a portion (30 or 45 days, prorated) of his salary. There is actually no rule against continuing to negotiate after the exchange of figures, but Blue Jays general manager Alex Anthopoulos has repeatedly stated that he would only negotiate multiyear (or single year with options) deals.

In the hearing, the three-arbitrator panel meets with the two sides, with each given one hour to plead their case, followed with a half hour of rebuttles. Then the panel of non-baseball experts is given 24 hours to decide which salary figure is most appropriate. They must choose either the high (player) figure or the low (team) figure to assign to a one-year, non-guaranteed contract with no options or other frills. There is no further negotiation or middle ground allowed once the hearing begins. Because the arbitrators can only choose from two figures, teams cannot throw out an obviously low ball offer, nor can agents submit a ridiculously high number.

Only evidence pertaining to the following topics can be brought up in the hearing (from The Sports Economist):

1. The contribution of the player during the previous season
2. The length and consistency of the player’s career
3. The record of the player’s previous compensation
4. The performance of the player’s club (and attendance) during the previous season
5. Any physical or mental defects the player may have
6. Comparable baseball salaries (of players in a similar class/MLB experience level)

Of note is that team finances (and ownership wealth) cannot be considered, but attendance (#4) does--something that may prove to be beneficial for the Blue Jays. A "similar class/MLB experience level" (#6) means that salaries are only compared with other players with the same amount of MLB experience, or one year more maximum. Also, any multiyear deals that the team offers during the period between the exchange of salary figures to the hearing cannot be admitted as evidence to the panel.

If, after reading through this, you are still confused about how salary arbitration works, take a look at the fantastically simple flowchart that Ian the Blue Jay Hunter put together.