The Tigers did not reach agreement with two-time Cy Young winner Tarik Skubal on a deal to avoid arbitration this evening. They’re now likely headed for what would be the most significant hearing in memory. That’s due to an astronomical $13MM gap in the sides’ respective filing figures.
Mark Feinsand of MLB.com reports that Skubal is seeking a $32MM salary, while the Tigers filed at $19MM. The sides are free to continue negotiations right up to the hearing time, but teams typically adopt a “file-and-trial” approach and cease talks on one-year deals after figures are exchanged. If it gets to a hearing, an arbitrator can only choose either Skubal’s number or the team’s. Arbitrators are not permitted to land on a middle ground, so the result would be very consequential.
If it gets to a hearing, Skubal will be shooting for the largest arbitration salary ever. That record is held by Juan Soto, who settled on a $31MM deal with the Yankees in his final year before free agency. Shohei Ohtani and the Angels agreed to a $30MM deal in his final year of arbitration eligibility. They’re the only two players to reach that benchmark. Vladimir Guerrero Jr. signed the loftiest deal in last winter’s class; he landed at $28.5MM.
While Skubal’s filing figure isn’t markedly above those of recent superstars, it would shatter the benchmark for pitchers. The arbitration process hasn’t rewarded high-end arms as handsomely as it does impact bats. In fact, no arb-eligible pitcher has commanded even $20MM. David Price still holds the record with a $19.75MM salary from back in 2015.
ESPN’s Jeff Passan wrote about the potential for an historically significant hearing when examining Skubal’s arbitration case this morning. As Passan pointed out, the collective bargaining agreement allows players who are one year away from free agency to compare themselves not only to past arbitration precedents, but to free agents as well. There’s ample precedent for free agent pitchers commanding upwards of $30MM annually, with some late-career aces pulling more than $40MM per season on short-term deals. That provision hasn’t actually moved the market for arb-eligible pitchers forward to this point, however, and the aforementioned massive salaries for Soto, Ohtani and Guerrero were all agreed upon without a hearing.
The Tigers’ filing figure aligns with arbitration’s historical precedent against pitchers. It’s also much more aligned with the usual year-over-year escalating salaries associated with the process. Skubal received a $10.15MM salary last year. The largest yearly jump for a pitcher is held by Jacob deGrom, who earned a $9.6MM raise after winning his first career Cy Young in 2018. Detroit’s figure would give Skubal an $8.85MM boost after his second consecutive Cy Young award.
To a large extent, this serves as a test case for the arbitration process itself. That Price still holds the record for a pitcher shows how much the system has lagged when it comes to valuing arms (particularly in comparison to the escalating free agent prices for starters). Skubal and his representatives at the Boras Corporation are aiming to blow that wide open. That’d obviously be significant for the southpaw himself but would also go a long way toward raising the earning ceiling for future arms.
There’s no guarantee that this actually gets to a hearing. Player and team would have a lot of money at stake if it does, and they’d each avoid the unpredictability of relying on the arbitrators if they settle on a deal in the mid-$20MM range. However, this kind of situation is precisely why teams prefer the file-and-trial approach. That’s designed to prevent the player from filing well above their expected value to anchor future talks from a higher baseline. Refusing to continue negotiating after numbers are exchanged prevents that situation. If the player files very high, the club feels good about its chances of winning a lower than expected number at the hearing.
It all makes sense in theory, but the stakes of a potential hearing in this case are higher than any in team history. They’d need to operate for the next month or so with a $13MM range in their payroll projection, which could hinder short-term free agent or trade activity. Skubal is one year from free agency and trending towards the largest pitching contract ever. If the Tigers feel they have any chance to re-sign him, they may not want to run the risk of an inherently adversarial hearing.
There’d also be ramifications if they put him on the trade market — either before Opening Day or, far more likely, if they fall out of contention before the deadline. One year of Skubal would have immense trade value regardless of his salary, but he’d be much more appealing to other clubs on a $19MM sum than he would at $32MM.
