Salary arbitration winners and losers
The numbers are staggering. The 178 salary arbitration-eligible baseball players this year reeled in single and multi-year contracts worth $766,995,002. To place that figure in perspective, MLB pulled in $6.3 billion in revenues in 2009. The total spent on salary arbitration players for just 2010 equals close to $434 million, chewing up about 7 percent of the revenue before even getting to free agents.
With every team involved this year, and truckloads of cash in play, there were bound to be winners and losers. Here's an analysis:
WINNERS
• I’ll raise ya: Sure, the case can be made that some players might earn more if they were allowed to become free agents earlier rather than remain under club control for six or seven years through salary arbitration, but at least players know the process gives them a good salary hike. On average, the 128 players that filed for salary arbitration on Jan. 15 had their salaries increase by 107 percent from 2009.
• Freak money Tim Lincecum(notes) didn’t land the biggest multi-year contract of the class, but he did wind up with the biggest pay raise from last season to this. The Freak will realize a 1,131 percent increase from the $650,000 he earned last season as a first-time salary arbitration eligible player. An unexpected second place for highest raise went to Giants closer Brian Wilson(notes), who goes from $480,000 in 2009 to $4,437,500 this season, a raise of 824 percent.
• They might be Giants Lincecum landed the biggest raise, yes, but it could have been a whole lot worse for the Giants. Lincecum was seeking $13 million compared to an $8 million offering figure by the Giants. Outside the hearing room, the Giants and Lincecum reached a two-year, $23 million deal, potentially saving the club millions.
• Clubs making their case There were eight salary arbitration hearings this year, with clubs beating the players five to three. Since 1974, when salary arbitration was put in place, there have been 495 cases heard by arbitration panels, with the clubs holding a 285-210 lead, a 57.6 winning percentage (see the MLB Salary Arbitration Scorecard tracker).
Rays batting 1.000 The Rays went to salary arbitration for the fourth time and five years, beating B.J. Upton(notes) at hearing. They can boast something no other club can: They are a perfect five for five in salary arbitration (see how each club has done in salary arbitration from 1974 to the present).
• Papelbon scores Lincecum may have landed the biggest raise, but the largest salary for the upcoming season by a salary arbitration player goes to Red Sox closer Jonathan Papelbon(notes) with his one-year, $9.35 million deal negotiated before a hearing, a 50 percent raise from his record-setting $6.2 million for a first-time arbitration eligible pitcher.
• Verlander and the King In this year's arb class, Papelbon will earn the most, but two starting pitchers can brag that they landed the biggest multi-year deals and avoided hearings. Justin Verlander(notes) netted the largest contract, a five-year, $80 million deal with the Tigers that used the five-year, $78 million contract of Mariners starter Felix Hernandez(notes) as the jumping-off point.
• Corey Hart(notes) owes Francoeur and Willingham dinner Salary arbitration is all about comparing player stats to salaries, and with that, Corey Hart owes winning his salary arbitration hearing in large part to Jeff Francoeur(notes) and Josh Willingham(notes). Willingham reached a $4.6 million deal with the Nationals ahead of a hearing, and Francoeur landed a $5 million deal with the Mets. That helped Hart, who had comparable stats, bolster his case for his requested $4.8 million compared to the Brewers $4.15 million offering figure. Hart, the first salary arbitration case that went all the way to hearing in 2010, won the case, setting the table for …
• Cody Ross(notes) owes Corey Hart Call this 6 degrees of Francoeur and Willingham, as the win for Corey Hart cascaded down to Cody Ross’ case, which he won over the Marlins, thus netting $4.45 million instead of Florida's $4.2 million offering figure.
• An increase in the exchange rate The average salary of the 44 players that wound up exchanging salary figures with their clubs this year will be $3,442,557, an increase of 14.9 percent from the $2,996,087 average paid players that exchanged figures in 2009.
• Coffey and the Duece This wasn’t a massive win for a player, but it was one of the best cases of superstition in salary arbitration. Going back to that $766,995,002 total for salary arbitration eligible players this year, you might be wondering about that odd two bucks. Thank Todd Coffey(notes) of the Brewers for that one. Coffey reached an agreement for $2,025,002 in late January, thus adding the odd … er, even number at the end. Why? Coffey apparently has a thing for not wanting zeros. Incidentally, he made $800,002 in 2009.
LOSERS
• The MLBPA gets no precedent-setter in Lincecum Many looked at the Lincecum salary arbitration case as a way to set the bar for future players. With a mid-point figure of $10.5 million between what the two-time Cy Young award winner was seeking and the Giants were offering, landing in the middle would have broke Ryan Howard’s(notes) record $10 million ruling in 2008. If Lincecum had gone to a hearing and won, he would have been more than double the $6.2 million record salary for a first-time salary arbitration eligible pitcher that Jonathan Papelbon landed in 2009. The MLBPA got neither as the Giants and Lincecum settled on hearing day.
• What was Laynce Nix thinking? The biggest case of overthinking this year has to go to Laynce Nix of the Reds. Nix was offered salary arbitration in November, but instead opted for free agency. Given how the market has been for top-tier players, let alone the rank and file, the strategy was bound to backfire, and did. Instead of landing a healthy payday through the salary arbitration process, he instead accepted a minor league deal just under a month later. Oops.
• Wandy, you’re the best … sort of Houston Astros starting pitcher Wandy Rodriguez(notes) was the MLB Pitcher of the Month for July and named the Astros Pitcher of the Year, but when it comes to salary arbitration, that only meant so much. Rodriguez sought $7 million, but the Astros pointed out that when his numbers weren't great outside of July and he was much better at home than on the road. The argument was persuasive, the team won and Rodriguez will get $5 million.
• When free agents should accept salary arbitration There were 23 free agents offered salary arbitration this year, with all but three declining (Rafael Soriano(notes) of the Braves, Rafael Betancourt(notes) the Rockies, and Carl Pavano(notes) of the Twins). For the likes of John Lackey(notes), Matt Holliday(notes) and Jason Bay(notes) (Type A players), it made good sense because they were locks to land lucrative multi-year deals. But what about the Type B players? Well, it seems certain that Rod Barajas(notes) would have landed more than the $1 million he will be getting with the Mets, and Brian Shouse(notes) signed a minor league deal with the Red Sox. Given the economy and how volatile the free agency market has been, for some, salary arbitration may see more green in wallets than going the free-agent route.
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Maury Brown is the founder and president of the Business of Sports Network, which includes BizofBaseball.com.
