Arbitration Basics

The arbitration process can be confusing, but it doesn't have to be. At its essence the process provides a structured way of compensating players with significant MLB experience who haven't yet earned the right to negotiate for their salaries in free agency.

When a player has between three and six years of service time or qualifies as a super two, he's arbitration eligible, assuming he’s on a team’s roster and not already under contract. Players who qualify for arbitration can negotiate for raises based on their production in comparison to that of their peers. While arbitration eligible players don’t earn as much as they could on the open market and can only negotiate with one team, it can still be a lucrative process with many agreements in excess of $5MM.

Only a small percentage of cases go to hearings each year. Players who do have hearings must defend their filing number in front of a panel of arbitrators (players might attend the hearings, but agents and MLBPA officials would argue on the player’s behalf). After hearing arguments from both sides the panel will either side with the team or the player; there’s no compromising.

Here are some links to posts and resources that will help make sense of arbitration, a fixture in baseball offseasons for four decades:

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