RFA Tags / Arbitration

[Canada8999]

Colby please correct me if I'm wrong, but the current RFA system is in place to help small market teams.  At the time, we also considered an arbitration system, but did not have the necessary infrastructure in place (yet).  We've since modified the salary cap structure to allow teams to have some control over their budgets through strong/poor performance, and now have a robust contract valuation system and draft-pick compensation rules - would anyone be in favor of revisiting salary arbitration?

[Mr.TradeKing]

I have never heard the talks in the first place, however I am intrigued.

~MTK

[Canada8999]

• Teams could offer their pending free-agents arbitration, where they must offer X% of the player's extension price.
• The players then are listed with non-tendered free-agents for standard bidding, and awarded to the highest bidder.
• If the highest bid is not the original team, then draft pick compensation kicks in (depending on Type A / Type B, etc.).
• The tendering team may also get the chance to match (is this what they do in MLB?), and retain the player (similar to our current RFA rules).
• If retained, the player is signed to a one-year deal
• Teams would have a specific time window after the season to declare their tenders

Some notes:
In MLB, there is no limit to the number of players that can be tendered, but teams risk the salary implications of all players accepting (no teams outbidding).
Poor performing / small market teams will typically be on the receiving end of compensation picks, as they won't be the highest bidders and will have their picks protected - is this enough?
Retained players are then subject to the standard 60-day window before they can be traded.

We could potentially extend this to replace our current prospect extension rules (where players with less than 6 years experience are retained via arbitration without any free-agency bidding), but I would suggest tabling that for now.

[Canada8999]

Poor performing / small market teams will typically be on the receiving end of compensation picks, as they won't be the highest bidders and will have their picks protected - is this enough?

To clarify my "is this enough?":

In MLB this is enough because they don't care about fairness ... it's a business and if you make bad decisions your team sucks - too bad.  However, we have a lot of ownership turnover and want to ensure that owners are not able to destroy a team for many years into the future, then leave a team that most new owners will also abandon after frustration sets in. 

Personally I think this is enough, as small market teams will be able to load up on picks and the trade market is very liquid such that new owners can make a positive impact.  Colby/Jake might be better able to speak to the struggles of a small market team...

[lp815]

To clarify my "is this enough?":

In MLB this is enough because they don't care about fairness ... it's a business and if you make bad decisions your team sucks - too bad.  However, we have a lot of ownership turnover and want to ensure that owners are not able to destroy a team for many years into the future, then leave a team that most new owners will also abandon after frustration sets in. 

Personally I think this is enough, as small market teams will be able to load up on picks and the trade market is very liquid such that new owners can make a positive impact.  Colby/Jake might be better able to speak to the struggles of a small market team...

As I see it now, it seems to not put the smaller market teams at any more of a disadvantage than what they are at now...I guess my question is are we wanting to discuss arbitration because the league is unhappy with the current format, or that the league should want to adhere to real MLB rules?

[Canada8999]

Personally, I would like to see arbitration just because I think it would be a cool addition.  I'm bringing it up now because others are unhappy with the current sign-and-trade rules (and a few mentions of the RFA rules), and thought it was certainly in the same realm if not a possible solution.

[rcankosy]

Correct me if I'm wrong, but we seem to have arbitration even if it does not go by that name.  We allow the extension of expiring prospect contracts at far less than market value for up to 5 years.  Isn't that what arbitration really is?

[Canada8999]

Correct me if I'm wrong, but we see to have arbitrationeven if it does not go by that name.  We allow the extension of expiring prospect
contracts at far less than market value.  Isn't that what arbitration really is?

It's similar - the current prospect extension rules are meant to mimic contracts like Longoria's, where teams/players avoid/buyout arbitration years.  They're long-term, rather than year to year.  More importantly, in MLB arbitration avoids to non-prospects as well.

[Canada8999]

Here is a summary of MLB's rules I found, can't claim it's accurate but it seems to be

How Baseball Arbitration Works

MLB Rules Governing the Eligibility and Process of Arbitration

Feb 23, 2008 James Lincoln Ray

If you are a baseball fan, then you have probably heard a lot about the recent arbitration hearings between players and their clubs that have taken place during the 2007-08 offseason, the most notable of which involved Ryan Howard, the Philadelphia Phillies, and $10 million. What you may not know, however, are the rules governing arbitration.

That’s the fault of the jokers on ESPN and Fox Sports, who will tell you tons of crap that you don't care about, but don’t bother to explain the very basic rules and regulations governing the game's economy. Idiots. But, don't worry, because this little article will explain everything you need to know about Major League Baseball arbitration. Here goes.

What Players Are Eligible for Arbitration?

A player and club who cannot agree on a contract may agree to salary arbitration, provided that the player has enough service time in the majors. The following players are eligible for arbitration:

(1) Players with at least 3 but less than 6 years of service in Major League Baseball;

(2) The top 17 percent of players with at least 2 but less than 3 years of Major League service. These are known as “Super 2” players. To qualify as a Super 2, a player must have accumulated at least 86 days of service in the previous year. Historically, the cutoff point for Super 2 status is 2 years, 128 days of service, though the requirement has been as high as 2 years, 140 days in years past.

(3) Players who have filed for free agency may also go through the arbitration process if their former team makes an offer of arbitration and the player accepts.

The Club's Arbitration Offer Requirements

(1) A club must offer contracts to players under its control by no later than December 12;

(2) If a player has filed for free agency, his former club must offer him arbitration by December 1. If the player accepts by December 7, the player is placed back on the team's roster, and the two sides may continue to negotiate or go to an arbitration hearing. If the free agent player declines the arbitration offer, the sides may continue to negotiate.

(3) The club's salary offer to a player under its control may not be less than 80% of the player's total compensation from the prior year, and may not be less than 70% of his compensation from 2 years earlier. These rules, however, do not apply to free agents who are offered arbitration.

The Arbitration Procedure and the Arbitration Hearing

Arbitration works as follows: In January, the player and the club each submit a salary figure to a three-person panel of professional arbitrators. hearings are conducted between the 1st and 20th day of February.

At the hearing, each party has one hour to present its case to the panel, and then has an additional 30 minutes for rebuttal. The player must attend the hearing, but is usually represented by his agent. A club executive or attorney usually represents the team.

The arbitration is a “high-low” proceeding, during which each side presents its case for why the player should be awarded the requested salary in the upcoming season. In deciding to award the higher or lower salary, the panel may consider the following criteria:

(1) the player’s contribution to the club in terms of performance and leadership;

(2) the club’s record and its attendance;

(3) any and all of the player’s “special accomplishments,” including All-Star game appearances, awards won, and postseason performance;

(4) the salaries of comparable players in the player’s service-time class and, for players with less than five years of service, the class one year ahead of him.

The parties may not refer to team finances, previous offers made during negotiations, comments from the press or salaries in other sports or occupations.

The panel, without opinion, awards the player a one-year, non-guaranteed contract at one salary or the other. If the player is cut within 16 days before the season begins, he is entitled only to 30 days’ termination pay. If the player is cut during spring training but after the 16th day before the season begins, he is entitled only to 45 days’ termination pay.

That's it. That's baseball arbitration. Not that hard, right?

Copyright James Lincoln Ray. Contact the author to obtain permission for republication.

http://www.suite101.com/content/how-baseball-arbitration-works-a45599

[Canada8999]

Our current three year clock for prospect contracts for the league minimum is a direct reflection of the first three years of arbitration eligibility, where players get pretty much nothing.