Arbitration process remains arduous
Players and clubs continue to search for fair compromise
During a period when the stock market is experiencing wild swings, mostly to the downside, nothing on the economic front remains more consistent than the monetary gains by Major League Baseball players who are eligible for arbitration.
Take the case of Ryan Howard of the Philadelphia Phillies, for example.
Howard was paid $900,000 by the Phillies last year. In the worst-case scenario for Howard this year, he will receive a raise of $6.1 million.
If all goes well for Howard, he could end up making $10 million for this season or, better yet, signing a multiyear contract that is likely to be in the range of $100 million-plus.
Investing in the stock market should go so well.
Howard's case is a result of the fact that he is eligible for salary arbitration for the first time after playing for the Phillies for two seasons and 145 additional days. His agent has filed for $10 million and the Phillies have countered with $7 million. If the two sides can't come to an agreement, it will be up to a three-judge panel to select either the player or the team figure.
Arbitration, and the fear of arbitration by the Major League teams, produces results that are all but staggering to the baseball fan and even to the teams themselves.
"The arbitration process is the worst thing that has happened to the Major League teams since the Black Sox scandal," says one veteran executive who has worked for a number of clubs and has vast experience related to arbitration cases.
Here's what Bud Selig had to say when asked by the New York Times about the economics of baseball: "In the last 15 to 18 months, talking to every club, asking 'What do you hate most about the system?' The bottom line is if they had their choice, without a doubt, it's salary arbitration. Free agency at least you can elect to do, but in salary arbitration you're somewhat of a prisoner of what other people have done."
The most interesting part of the quote is that it ran in the New York Times on Feb. 23, 1992 -- 16 years ago.
Selig was the owner of the Milwaukee Brewers at the time and a member of the economic-study committee that was formed in the 1990 labor negotiations to determine where baseball is headed economically.
Selig, of course, has moved on and now is the Commissioner of Baseball. Baseball has been stuck with the same old system of arbitration with only a few minor changes in the process.
The one thing that has changed about arbitration is that the numbers involved keep moving to record highs.
It was on Feb. 23, 1973, a collective bargaining agreement was signed between the players union and the owners which provided for salary arbitration as a means for resolving salary disputes.
It all seemed to be innocent enough in the beginning. Oakland star Reggie Jackson went through the process in each of the first two years.
Jackson won the first time around and received a salary of $135,000 after winning the MVP award in 1973, but he lost a case the next year when he sought $168,500 and an arbitrator chose the team's $140,000 submission. It may have been that Reggie finished fourth in the MVP voting, who knows.
The financial gains by the players through arbitration moved somewhat slowly at first, and it wasn't until 1983 that the $1 million mark was passed when an arbitrator awarded that figure to Fernando Valenzuela of the Los Angeles Dodgers.
This year, there were 48 players who exchanged figures with their teams in filing for arbitration and in one-third of those cases the player and team were separated by $1 million or more.
There are 10 players seeking $5.2 million or more through arbitration and eight of these are above $6.2 million.
Howard's number of $10 million doesn't even take the top spot on the highest salary figure sought by a player.
The top dollar amount being sought this year is $12.5 million by the closer of the Los Angeles Angels, Francisco Rodriguez. The Angels have countered with a figure of $10 million.
If Rodriguez wins his case, or even if he settles by splitting the difference, he would become the second-highest paid relief pitcher in the Major Leagues this season and trail only Mariano Rivera of the New York Yankees.
The Yankees signed Rivera to a three-year contract for $15 million a season this offseason. As a player with five years of Major League service, Rodriguez can point to Rivera's contract as a comparison and you can be assured this point will be a part of the negotiations.
It is the link with free-agent signings that helps to fuel the arbitration process. There also is the factor that the free-agent talent pool is shrinking as teams attempt to lock up their young stars, and the list of potential free agents after this season isn't going to get any team very excited.
In addition to the dollars involved, the arbitration process is very unsettling to both the player and to the team. Most general managers would rather go to a dental appointment than an arbitration hearing.
The last thing the Phillies want to do is to upset their young star Howard.
During the past two seasons, Howard has hit more home runs (105) and driven in more runs (285) than any player in the Major Leagues. He has been a bargain for the Phillies as his combined salary for the two years was $1.255 million.
You can be assured the Phillies would like to do a long-term deal, but when the player and his agent look at recent free-agent signings you can be assured that it is going to be one tough negotiation.
Philadelphia finds itself in the same position as St. Louis was a few years ago when their star slugger, Albert Pujols, was eligible for arbitration for the first time in 2004. Pujols was coming off of three great seasons.
The Cardinals offered Pujols $7 million in arbitration and this lead to a seven-year deal for $100 million. The problem for the Phillies is that Howard's agent is likely to view the $100 million as ancient history in view of baseball's increased revenue.
As Commissioner Selig has pointed out, the business of baseball is booming, but the process of arbitration and its related contacts isn't getting any easier.
Fred Claire was a member of the Los Angeles Dodgers from 1969-98, serving the team as executive vice president and general manager. His book -- "Fred Claire: My 30 Years in Dodger Blue" -- was published by SportsPublishingLLC. This story was not subject to the approval of Major League Baseball or its clubs.