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Context For The 2020 Arbitration Class

By Jeff Todd | January 11, 2020 at 7:00am CDT

The just-finished flurry of arbitration news settled a bunch of price points. Some are reasonably notable; many were already largely anticipated and accounted for. More than ever before, the deals were closely fought (is it me or did they used to settle at rounder numbers?) and closely held (heaven forbid anyone learn anything any second before absolutely necessary). But at the end of the day, quite a few hit the books.

But what of the unfinished negotiations — those that did not come to resolution? I’m going to endeavor to give some context to the slate of arb-eligible players who’ve exchanged figures with their respective teams.

As you may have heard, or picked up from following along for some time, the arbitration process has evolved quite rapidly over the past several years. Once upon a time, there weren’t many hearings at all. There weren’t any in 2013 and we had only a few piddling disputes to be heard in 2014. The action picked up quite a bit in the ensuing winter, as 14 cases went to hearings — some for a decent bit of coin. But things went back on ice in 2016, when there were four hearings, none with more than $550K at stake.

Teams and players exchanged figures plenty often in those days. There were typically more than thirty unresolved cases when the mid-January deadline rolled around. And, clearly, some cases did go to hearings. But for most teams, there was a willingness to continue a dialogue well past the exchange of figures. In many situations, the exchange of figures was just a step towards a negotiated resolution.

The “file and trial” concept certainly existed in those days, but the majority of teams didn’t employ it. Now, it’s functionally universal. Many clubs will keep talking, but most will only do so if it involves future seasons beyond the one subject to the upcoming hearing.

Let’s take a closer look at the recent numbers to see this in action. After the dust settled yesterday, we were left with twenty unresolved cases — far fewer than would’ve remained un-done even a few years ago. It’s possible that all could go to hearings, Jeff Passan of ESPN.com suggests on Twitter, though surely there’ll be some kind of multi-year breakthrough in at least a few cases. That’s almost certainly what it’ll take to avoid a hearing, as we’ve seen a near-complete elimination of pure settlements after the exchange of figures.

Back in 2017, among the 29 instances of figure filing, seven were eventually tied up with single-season arb settlements. Three more involved arbitration-only extensions or option additions. There were four full-blown extensions. And just more than half of the cases went to trial, with the teams edging the players 8 to 7 in outcomes.

In the ensuing year, there was yet further creep. Among the 27 filing situations, all but five went to trial. (The players prevailed a dozen times.) One open matter was closed with a long-term extension, another was resolved by an arb-only deal, and three were settled in the traditional, one-year manner.

In 2019, there were only 14 cases in which figures were exchanged. Among them, only two were settled — both with contracts that included club options that created cost certainty in a future season. Two more involved significant, multi-year extensions. The balance went to hearings, with the players winning six of ten times.

The primary takeaway, then, is that the remaining contractual spreads are likely to go one way or the other — unless a multi-year arrangement of some kind can be arranged. That’ll actually be relatively more difficult now than before for a different reason. In 2020, six of the twenty filers are in their final season of arbitration eligibility. The prior classes had far fewer: 2 of 14, 2 of 27, and 4 of 29. Working out deals involving seasons of presumptive free agency is quite a bit more complicated.

So, is this an especially high-stakes year? In some regards, yes. It features the largest absolute case we’ve seen in some time in George Springer, whose filing figure of $22.5MM is a whopping $5MM north of the team’s counter. Million+ dollar spreads are fairly rare. Three were settled in 2017 (Drew Pomeranz, Pedro Strop, Jake Diekman). Two more settled in 2018; Springer also avoided a hearing, agreeing to a two-year deal. But Mookie Betts and Trevor Bauer both won trials that year with big money at stake. Bauer and Gerrit Cole repeated the feat in 2019. In 2020, there are three big-money cases, with Josh Hader and J.T. Realmuto joining Springer with voluminous spreads. There are also some big spreads in relative terms. The Brewers’ two open cases — with Hader and fellow lefty Brent Suter — each features 50+% spreads (as against the team number) in value. We’ve rarely seen that kind of spread, though there was one greater that went to trial: Dellin Betances, in 2017. He lost that memorable case. But his agents at Excel are still willing to duke it out; per Passan, via Twitter, they lead the way with six of the still-open cases this winter.

From a global perspective, there isn’t necessarily more at stake than has been the case in recent years. The total player demands this year tally $128.4MM, with the team counters amounting to $108.2MM — good for a $20.2MM gap. There was obviously far less at stake last year with so few cases, though the total ~18% net spread between the sides is about the same. The tallies look different in prior years. In 2018, we saw nearly $140MM in demands but only a $18MM+ gulf, so the spread was a narrower 15.25%. The cases were smaller on average in 2017, with a file/counter split of $113.55MM and $95MM, but that was good for nearly a 20% divide — the largest of the four-season sample.

All things considered, it seems that the 2020 arbitration hearing class is more a culmination of recent developments than terra incognita. Perhaps it will function as a new standard for years to come. Then again, as the above exercise shows us, the tendency always is one of change. It’s possible we’ll begin to see new trends emerging; some may now be hiding in plain sight while we focus on those that have already been identified.

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29 Comments

  1. Bill M

    5 years ago

    Good article. And yes, they used to settle at rounder numbers. I’m not saying they don’t deserve what they’re getting, but the players are making some good money. I’m guessing that the agents are trying to squeeze every penny out for their commissions

    Reply
    • GB85

      5 years ago

      Another consideration in arbitration is that a higher number now will lead to higher numbers in the future – total snowball effect. Players have a lot to gain and teams have more to lose.

      Reply
      • ihazhomerun

        5 years ago

        This ^^^^

        Reply
  2. Charlie III

    5 years ago

    I have a question, for anyone in the know: do teams and players ever raise modern analytics like Statcast data or spin rate in arb hearings? I know awards are mostly based on traditional counting stats, but is it 100% based off that? Also, are media ever allowed into the hearing?

    Reply
    • DarkSide830

      5 years ago

      youre awarded based on your production, not for having the ability to produce well.

      Reply
      • swinging wood

        5 years ago

        How about using the Statcast-derived stats like the newly published Outs Above Average (OF was last year, IF just came out)?

        Reply
        • jorge78

          5 years ago

          The arbitrators are focusing on traditional stats. They’d have to adjust their thinking…..

          Reply
    • jonnyzuck

      5 years ago

      I believe either side is allowed to bring up any data they want and they do bring in those kind of numbers when they suit a particular case, but I’m not sure how much weight if any arbitrators give to stats like that. The arbitrators are not necessarily baseball fans or fans of advanced stats so many of them don’t know what to do with those numbers or prefer to stick to the traditional numbers that have well established arbitration precedents

      Reply
    • Patrick OKennedy

      5 years ago

      The biggest factors are salary history, service time, and playing time. Stats need to be exceptionally good to boost the player’s case, and getting awards is much more important than any stats. So the awards are based closer to 0% off stats. Arbitrators take playing time as an indication of how much a club values the player’s services.

      Reply
    • jorge78

      5 years ago

      I don’t think the media is allowed in otherwise you’d see a lot of stories about the negative things each side said…..

      Reply
  3. ForestCobraAL

    5 years ago

    How is J.T. Realmuto a “big money case?”

    Why is Realmuto a “case” at all? His ask of twelve million is nothing. Realmuto is the consensus best catcher in MLB yet he’s only made ten million total for his impactful career.

    When Realmuto goes onto the market next winter as one of two impactful position players available and with the Red Sox, Yankees and Angels in need of his services and the Giants manager pushing for his signing and every NL Least team in need of a catcher you will see how much Realmuto is worth.

    1
    Reply
    • Johhos

      5 years ago

      You’ve obviously not had your coffee yet if you think the Phillies will let him get to FA. His arb ask was higher than most projections and more than a 100 % raise. There won’t be a huge resistance , and then an extension announced for 2021 and beyond.

      Reply
      • vtbaseball

        5 years ago

        It’s not just up to the Phillies now is it?

        2
        Reply
        • tigerdoc616

          5 years ago

          That is just it, it takes two to tango. Too often fans think that players want to play for their team. I am a Tigers fan and I hear it all the time, “wish the Tigers had signed (Player X)”. Fact is, I am sure Avila approached a lot of free agents this year before signing the guys he did and most probably said “not interested.” JT might not be interested in signing with the Phillies wanting to see what his worth is on the free agent market.

          2
          Reply
    • bdpecore

      5 years ago

      Anytime a player is looking to get a 100% raise in his final year of arbitration it’s a big deal since it can potentially lay down the groundwork for future players to make the same argument. As for him not making what he’s worth. That has more to do with the current CBA agreement which the players union must agree to.

      I won’t feel sorry for JT next year after he signs a 5/$100MM contract.

      Reply
      • ForestCobraAL

        5 years ago

        “5/$100MM”

        ROFLOL!

        Reply
    • wordonthestreet

      5 years ago

      Sure if he reaches free agency he will get market value but what does that have to do with the arbitration this year? Nothing. He is not a free agent this year so what his “value” is as a free agent is meaningless.

      Reply
    • Jeff Todd

      5 years ago

      Huh?

      $2.4MM is in absolute terms a very wide spread. That’s all I was referring to. It has nothing to do with his hypothetical future open-market value.

      Reply
  4. great_gumbino

    5 years ago

    George Springer. What a character. First you get caught cheating and now file 5 mil north of projections. What a tool

    1
    Reply
    • bdpecore

      5 years ago

      I’m not saying I don’t agree with your opinion but it’s going to be difficult for the Astros to use the cheating argument against Springer when their own people we in on it. So I think he might actually win his case if his agent can come up with comparable cases.

      2
      Reply
    • forstyle

      5 years ago

      he filed scooter $1mil over his projection. the Astros are about $4 mil under his protection.

      also, the entire organization got caught cheating, not just him. you can’t hold it against only him. many major league organizations have been caught doing similar things in recent seasons, like the Braves in international free agency and cardinals hacking. no team is innocent.

      Reply
      • Doug Dueck

        5 years ago

        NO team is innocent? You have only listed Astros, Braves and Cardinals forstyle.; please give us the teams and their respective illegal activities as you believe has occurred.

        Reply
        • forstyle

          5 years ago

          en.m.wikipedia.org/wiki/Major_League_Baseball_coll…

          ok, so this was before a few teams existed. my bad. relax.

          but most teams do manipulate the service tone of players to gain extra years of service, which is against the CBA.

          Reply
      • stan lee the manly

        5 years ago

        None of your listed examples are remotely close to the level of cheating that the Astros did. Neither the Braves nor the Cardinals did anything that came even close to effecting the actual game being played on the field.

        This would be like comparing two guys who got caught for petty theft with a third that murdered the entire family next door, they aren’t anywhere near on the same level.

        Reply
        • whyhayzee

          5 years ago

          Don’t confuse teams that got caught with teams that cheat. That means any penalties are essentially for getting caught. You’re living in a bubble if you don’t think there are more teams cheating.

          Reply
        • buckcheeks34

          5 years ago

          Except…you know…what the Cardinals did was ACTUALLY illegal and what the Astros did was not…

          Reply
    • troll_smasher

      5 years ago

      George Springer trying to get what he thinks his value is really sucks! He has to be one of the worst people in the history of mankind. The nerve of some people. Who does he think he is?

      1
      Reply
      • jorge78

        5 years ago

        Sarcasm alert!

        Reply
  5. tigerdoc616

    5 years ago

    Arbitration is always in flux. However, given the spreads on the cases that have been filed, seems that most should settle and only a handful of cases should reach a hearing. Even if the percentage seems large, the actual dollar spread on most of the filed cases is fairly small. But a settlement depends on teams and players willing to compromise.

    1
    Reply

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