Feb
21

Final Offer Abitration Explaination..Finally!

By | Arbitration

2 Comments

In his third and final year of law school, SportsAgentBlog.com contributor, Jason Wulterkens, wrote a wonderful paper on Major League Baseball’s use of Final-Offer Arbitration (FOA). After noticing my latest report on FOA, Jason decided to send me his law school paper so that I may analyze it and break it down into its most important points for you all to digest. Here are a few of the points that I felt were worthy for you to read:

  • Both players and organizations may file for salary arbitration without the other’s consent.
  • Players with between 3-6 years of experience along with “super-two’s” (players with at least 2, but less than 3 years of pro service, who have accumulated at least 86 days of service during the immediately preceding system and rank in the top 17% of said class) can file for arbitration.
  • Players with less than 3 years of experience (who are not super-twos) are still subject to the old “reserve” clause and have little to no bargaining power in salary negotiations.
  • With his team’s consent, a player with more than 6 years of experience, who was not eligible for arbitration at the end of the previous season, may invoke arbitration.
  • An arbitrator may only rule on the terms of a one-year deal. Multi-year contracts will not be decided through arbitration.
  • A player may file for arbitration between January 5th and 15th and if it reaches a hearing, it will occur between February 1st and 20th.
  • In the actual hearing, each party is limited to 1 hour of initial presentation, and 1 half hour of rebuttal and summation.
  • The arbitrators may consider only particular criteria in deciding a player’s salary, typically including:
    • The player’s performance during the past year.
    • The length and consistency of his career.
    • The salaries of “comparable”players.
    • His team’s on-field success and attendance numbers, the latter of which is considered legitimate indicia of the player’s public appeal and acceptance.
  • Team profitability and market size cannot be considered in the hearing.

Hope you appreciated my effort to turn Jason’s excellent twenty page paper into about a page of bullet points! Arbitration season is officially over. Check in tomorrow for a little recap on how the hearings turned out and some highlights over the past couple of weeks.

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  • Jordan McNulty

    Greatly appreciated. But aren’t all of your bullet points, and even a more detailed explanation, summarized rather succinctly in the MLB Basic Agreement (which is available to the public)? Best of luck with Dynasty – you’re passion and commitment seem unparalleled, although I think that folks will question your distinctive competency if you are trying to rep motorports, bowlers and then gators in every sport. Don’t sleep on Courtney Lee. Thanks.

  • http://www.sportsagentblog.com Darren Heitner

    Haha thanks for the comment Jordan. The MLB Basic Agreement, which definitely is available to the public, does lay out much of what I explained, in a more convoluted manner. Consider this post to be a basic cheat sheet (a Cliffs Notes if you will) for the most basic background on arbitration. For those who wish to be true professionals, I urge you to go to law school and take an actual semester course in Arbitration.

    As far as Dynasty is concerned, I appreciate your mention of my passion and commitment. Worried about me spreading myself too thin? Don’t be. I have hired somebody to head up our bowling division and we only represent one person in motorsports. Dynasty’s main divisions will actually be basketball, football, and baseball. I promise that you will see developments in those areas in the near future. There are more people working behind the scenes on Dynasty than those listed on the website. Be assured that my passion, commitment, extensive research, and intelligence will enable Dynasty to grow while taking care of all of its clients without ever taking on too much for the company to handle.

    Who’s sleeping on Courtney Lee? The kid will probably be a late first/early second round pick. Not top 15 material, though (in my opinion).

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