Categories
Arbitration Contract Negotiation

Arbitration…good or bad?

When the gavel drops, my collar pops

This post seems apropos since it is February, and February is the season for abritration. In a previous post titled, “Want to be an MLB agent? (Part I…of many)”, arbitration in baseball was briefly discussed. It was noted that:

  • A player may become eligible for salary arbitration one of two ways:
  • A player with less than 6 years in the MLB, but 3 or more years at that level
  • A “Super Two”: A player with at least 2 years in the MLB, but less than 3 years at that level. He must have accumulated at least 86 days of MLB service during the past season and rank in the top 17% in total service in the class of Players who have at least two but less than three years of MLB service
  • The majority of arbitration cases are settled before the actual hearing.

But even though the majority of cases are settled before a hearing takes place, an article by the Kansas City Star has a dark tone when it comes to actually going through with an arbitration case.

It is unlikely that a Sports Agent and his/her client end up winning an arbitration hearing, with the client only winning 40% of the time since arbitration began in 1973. Recently, the Agents are pulling in a smaller percentage of victories than that.

The article does a good job explaining the actual arbitration hearing, which is important for any Agent to understand.

The beginning consists of the Sports Agent defending their proposal for about an hour followed by an hour of counter arguments by the baseball team (which often relates to a low fan attendance correlation). The Agent gets a 30 minute rebuttal and the team ends the hearing with a 30 minute conclusion. A panel of 3 arbitrators decide which side wins.

The real damage may result in your client’s new knowledge of his/her inadequacies. I found this quote from the article to be noteworthy:

“I remember an arbitration case in Texas with Lee Stevens,” Brewers general manager Doug Melvin said. “At the end, he said, ‘It was like having an autopsy done while you’re still alive.’”

The lesson is that an arbitration hearing can be expensive, take up a lot of time in preparation, may be damaging to your client’s psyche, and has a high risk of failure. If arbitration can be avoided, and most cases are settled before-hand, both the team and your client may benefit. But if your client is being grossly underpaid, arbitration may be the only way to have your client accrue what he/she deserves.

[tags]baseball, arbitration, sports agent, salary[/tags]

By Darren Heitner

Darren Adam Heitner, Esq., is a preeminent sports attorney and the founder of Heitner Legal, P.L.L.C., a Fort Lauderdale-based law firm specializing in sports law, contract negotiations, intellectual property, and arbitration. He earned his Juris Doctor from the University of Florida Levin College of Law in 2010 and a Bachelor of Arts in Political Science, magna cum laude, from the University of Florida in 2007, where he was named Valedictorian of the College of Liberal Arts and Sciences. Admitted to practice in the state bars of Florida, New York, and the District of Columbia, as well as multiple federal courts, Darren also serves as a certified arbitrator with the American Arbitration Association.

As an adjunct professor, Darren imparts his expertise through teaching Sports Law at the University of Florida Levin College of Law and Name, Image, and Likeness (NIL) at the University of Miami School of Law in the Entertainment, Arts, and Sports Law LL.M. program. His scholarly contributions include authoring several books published by the American Bar Association, such as How to Play the Game: What Every Sports Attorney Needs to Know, and numerous articles in prominent publications like Forbes, Inc. Magazine, and Above the Law. His thought leadership in NIL has earned him recognition as one of the foremost experts by The Wall Street Journal, USA TODAY, and On3, and he has been lauded as a “power player in NIL deals” by Action Network and a “top sports trademark attorney” by Sportico.

Darren’s passion for sports law led him to establish Sports Agent Blog on December 31, 2005, initially titled “I Want To Be A Sports Agent.” The platform, created as a New Year’s resolution, has grown into a cornerstone of the sports agency community, offering in-depth analysis of industry trends, legal disputes, and agent-player dynamics. His commitment to the field is further evidenced by his representation of numerous athletes and sports agents, as well as his prior role as an Adjunct Professor at Indiana University Bloomington, where he developed and taught a course on Sport Agency Management from 2011 to 2014.

Darren’s contributions have been recognized with prestigious honors, including the University of Florida’s 40 Under 40 Award, the University of Florida Levin College of Law’s Outstanding Young Alumnus Award, and designation as the best lawyer in Fort Lauderdale by Fort Lauderdale Magazine. He remains an active voice in the sports law community, sharing insights through his weekly NIL newsletter and his X posts, engaging a broad audience on legal developments in sports.

3 replies on “Arbitration…good or bad?”

There’s some good stuff in Moneyball about arbitration, and how both sides accept the process — that the team is going to make the player out to be a scrub, and the agent will make him out to be a deity on the diamond.

[…] In a post made almost exactly a year ago I looked specifically at arbitration in Major League Baseball [The Arbitration Battle: Advantage – Team]. The observations that I made last year seem to be on course again this year. When an arbitration case is actually heard, owners have an advantage (they are 4-1 so far this year). There are also a lot of negative consequences that may come along with following through with a hearing instead of settling before-hand [Arbitration…good or bad?]. […]

Comments are closed.