The Diamondbacks have four players on the 40-man roster who are eligible for arbitration this spring: Stephen Drew, Kelly Johnson, Miguel Montero and Joe Saunders. If they and the team are unable to come to a mutually-agreed salary for the coming season, then they will each put their case to a neutral panel of judges, who then set their salary for the year. But how does this process work? What players qualify? How does the arbitrator decide?
These questions and more will be answered after the jump...
Service time.
The first concept that needs to be understood is service time, which is the "clock" which decides, not only when a player is eligible for arbitration, but when they can become a free-agent. A player earns service time when he is on the 25-man roster, on the disabled list or serving a disciplinary suspension -also, if he's in the military, but that isn't likely to apply outside of the odd Korean! If you get sent to the minors for more than 20 days, your clock stops. 172 days of service time equals one year, and as a player accrues service time, they get additional benefits.
For example, after five years, they can not be sent to the minors without their consent, and if they refuse, they must be offered their release. When reaching ten years, a player who also has five years service time with his current team automatically gets a veto over all trades. Six years of service time allows a player to declare free-agency, unless he has signed a contract otherwise. But for the purpose of this article, what's most important is that three years makes a player eligible for the arbitration process.
Super Twos
Under some special circumstances a player may get arbitration before that, becoming what is called a "super two." While most players get three years where the club unilaterally decides their salary, and three arbitration years, these super twos get two years of the former, and four arbitration years. Each year, the top 17% of players with at least two, but less than three years of service time, fall into this category. Normally, the cutoff point is somewhere between two years, 128 days and two years, 140 days.
The difference can be huge. Tim Lincecum was called up on May 6, 2007, so accumulated two years, 148 days of service time by the end of 2009. That was enough to make him a super two this time last year, eligible for arbitration, and as a two-time Cy Yong winner, he'd have got a huge increase. He ended up agreeing to a deal with SF (going "right to the door" of the hearing, according to Jon Heyman): including signing and performance bonuses, he made over $10 million for 2010. I note that Buster Posey was not called up until the end of May 2010, and it's hard to argue a desire to avoid him becoming a Super Two did not play into that decision.
In contrast, Mark Reynolds was called up ten days later than Timmeh, missed super-two status by a long weekend, and though he also worked out a contract with the team, earned only $833K last season. It's not something which will be an issue for the team this time round. Tony Abreu and Juan Gutierrez, our 2-3 year service time candidates after 2010, were both well short of the top one-sixth, and get their contract dictated to them as usual.
The arbitration process
The four players listed in the opening paragraph will now move forward, though an agreement can be reached by mutual consent at any point, ending things immediately. Otherwise, it starts with the players filing for arbitration by January 15, basically a formality. Three days later, the team and player exchange their desired salaries. If a deal is not reached, an arbitration hearing will occur sometime in the first three weeks of February. The player and club each make their case, and the arbitration panel of three decides which figure is most reasonable - they must pick one or the other, there's no middle-ground [this encourages reasonable submissions by both sides].
It's probably worth listing at some length, the criteria which are used to come to a decision. These are taken from the Collective Bargaining Agreement:
The quality of the Player’s contribution to his Club during the past season (including but not limited to his overall performance, special qualities of leadership and public appeal), the length and consistency of his career contribution, the record of the Player’s past compensation, comparative baseball salaries, the existence of any physical or mental defects on the part of the Player, and the recent performance record of the Club including but not limited to its League standing and attendance as an indication of public acceptance (subject to the exclusion stated in subparagraph (i) below).
The arbitration panel shall, except for a Player with five or more years of Major League service, give particular attention, for comparative salary purposes, to the contracts of Players with Major League service not exceeding one annual service group above the Player’s annual service group. This shall not limit the ability of a Player or his representative, because of special accomplishment, to argue the equal relevance of salaries of Players without regard to service, and the arbitration panel shall give whatever weight to such argument as is deemed appropriate.
Evidence of the following shall not be admissible:
(i) The financial position of the Player and the Club;
(ii) Press comments, testimonials or similar material bearing on the performance of either the Player or the Club, except that recognized annual Player awards for playing excellence shall not be excluded;
(iii) Offers made by either Player or Club prior to arbitration;
(iv) The cost to the parties of their representatives, attorneys, etc.;
(v) Salaries in other sports or occupations
Arbitration in history
Since the current system started, in 1974, 495 players have gone to a hearing, about 13 per season or so. However, the numbers have declined in recent years. The eight which took place last year was a number that hadn't been surpassed since 2001's fourteen, and it's a far cry from the thirty or more seen during some seasons in the eighties. The process has historically slightly favored the clubs, who have won 57.6% of all hearings, and done slightly better in the past few seasons, with a record of 22-13 since the start of 2005.
The Diamondbacks, in their time, have had just two hearings. The first one came before they started play, in February 1998, when they beat Jorge Fabregas. The panel decided he would get $875K rather than what he wanted, $1.5 million. However, Jerry Colangelo ignored that, calling the system "ludicrous", and instead signing Fabregas to a two-year, $2.9 million deal, one of the stranger decision of the arbitration era. The other case was more conventional. Damian Miller beat the team in February 2001, being awarded $1.25 million, against the $875 K offered by the franchise.
In nine trips to the rodeo since, Arizona have avoided any hearings, and it seems some franchises are less likely to go there than others. Over the same time period, while the Diamondbacks have had zero players go to full arbitration, the franchise in Washington (and, previously Montreal) has had ten, and Florida seven. There's also a wide variation in the success-rate among teams. Our expansion siblings in Tampa have yet to lose a hearing, in five attempts, and Philadelphia's loss to Ryan Howard in 2008 was their first - they've not been back since. At the other end of the spectrum, the Detroit Tigers are a miserable 6-14.
Arbitration and the 2011 Diamondbacks
Kelly Johnson: 3rd year arbitration, 2010 salary $2.35 million.
Johnson is the only Diamondback is in his final year before free agency, and is perhaps the hardest to predict, given a lack of those against whom he can be compared. He should be in line for a very significant increase, however, having been one of the most-productive at his position last year. With not much in the way of an obvious replacement, I wouldn't be surprised if the team makes an effort to sign KJ to an extension, and I'd not be averse to that. He turns 29 next month; something like $12m/two years or $18m/three would feel like a good investment to me. Failing that, I would expect about $5 million for 2011.
Joe Saunders: 2nd year arbitration, 2010 salary $3.7 million
Steve Gilbert said Saunders is "just one year away from getting to test free agency for the first time," but I think he is under team control through 2012 as well. Not expecting much effort towards an extension, with the team having younger players penciled in for the rotation. If this does go to a hearing, it could be interesting. Saunders posted a decent 4.25 ERA after his arrival in Arizona, but went 3-7. Worth noting that the arbitration panel are not baseball experts, but members of the American Arbitration Association, for whom I suspect the heavier sabermetrics would likely trigger eye-glazing, the same way they do to Mrs. SnakePit. $5.25 million, one way or another.
Stephen Drew: 2nd year arbitration, 2010 salary $3.4 million
As was discussed earlier in the week, Drew's progress towards the free-agency jackpot at the end of 2012 is likely to be smooth and untroubled: that sound you can hear, is agent Scott Boras drooling (while, I suspect, hoping the Mayans got it wrong). But Drew is such a laidback guy, I really can't see him wanting to go to a hearing where the team, basically, spends an hour explaining to a panel why he sucks. It didn't take him and the Diamondbacks long to sign a deal last year; they inked it on January 19th, immediately after exchanging salaries, and things will likely be as smooth this year. 2010 was a good year, so $5.5 million seems about right.
Miguel Montero: 2nd year arbitration, 2010 salary $2 million
Health could well be an issue here, Montero having appeared in barely half of Arizona's games last year, and of his five seasons, only once has Miggy appeared more than 85 times. That said, over the past two seasons, there's only six catchers in the majors with more games and a better OPS+ than Montero. One of those is Mike Napoli, likely a good comparable for Montero. This time last year, he was, like Montero, earning $2m as a second-year arbitration player. Napoli ended up signing for $3.6 million, but his 2010 was a bit better, both in terms of health and production. Montero's bump will this be slightly smaller: I'm calling it at $3.2 million.
Expectations
As of January 3rd, there wee 132 arbitration-eligible players in the majors - Anaheim and Toronto led the way with eight each. The vast majority of those will come to an amicable agreement with their current teams, and there's no reason to think it will be very much different in Arizona. While there's new management in Arizona, it doesn't seem Kevin Towers is any keener to go through arbitration than predecessor Josh Byrnes: "There really are no winners. When you go through it, there's a lot of damage done to the relationship on both sides." I think we'll continue our pristine record for another year, settling with all four eligible players.