The Collective Bargaining Agreement (CBA) between MLB and the MLBPA (players’ union) establishes the framework for determining the salary of major league baseball players. Before a player reaches three years of service time, the club – and the club alone – sets the salary, limited only by minimums established by the CBA. The player has no say.
After players have accumulated three years of service time, if they can’t reach an agreement with the club, they have the right to have an arbitration panel determine their salary. After a player reaches six years of service time, he becomes a free agent and can negotiate his salary with any organization.
The Arbitration Process: A panel of three neutral arbitrators are agreed to by MLB and the MLBPA through a process of strikes. After a player files for arbitration, the team and the player each submit a proposed salary. In February, the arbitrator panel conducts a hearing where each side makes the case for its own number. Then the arbitrators choose between the two proposed salaries, whichever is believed most reasonable. The arbitrators may not come up with their own salary figure or split the difference. That structure is supposed to encourage both sides to submit reasonable figures.
At any point, the player and the team can reach agreement on the player’s salary and the arbitration process is ended.
Teams try to avoid letting arbitration reach the hearing stage because that’s when it becomes deeply adversarial – the team argues why the player isn’t really that good or is undeserving – risking ill will between the club and player. The vast majority of cases get decided prior to the hearing. The Reds haven’t been through an arbitration hearing since 2004 when they “beat” Chris Reitsma.
Last year, the Reds reached agreement with Zack Cozart ($2.35 million), Aroldis Chapman ($8.05 million) and Mike Leake ($9.775 million) before the hearing. They signed multi-year contracts with Todd Frazier and Devin Mesoraco that established their 2015 salaries and beyond. They traded Mat Latos, Alfredo Simon and Chris Heisey before they got to the arbitration phase. They released (“non tendered”) Logan Ondrusek.
This year, only two players on the roster are eligible for arbitration: Zack Cozart and J.J. Hoover. This is Cozart’s second year of arbitration and Hoover’s first. The Reds non-tendered Jason Bourgeios, Brennan Boesch and Ryan Mattheus (who has since resigned with the Reds).
Zack Cozart and J.J. Hoover filed to begin the arbitration process on Tuesday. The deadline for the players and team to submit their proposals to the arbitrator was 1 p.m. today.
MLBTR projections: Cozart ($2.9 million) and Hoover ($1.1 million).
Update: Not much difference in the offers by the Reds and Hoover. This should settle quickly, although strange they didn’t reach an agreement before now.
Jj hoover filed at 1.4M, reds at 1.225M
— Jon Heyman (@JonHeyman) January 15, 2016