The Arbitration Battle: Advatange – Team

We're talkin' millions

100 baseball players entered the arbitration season, and the average salary obtained after the hearings (or after a deal was brokered before a hearing took place) is $2.5 million. While that number may not seem too shabby, the trend since 2004 is that arbitration verdicts (or prior settlements) are decreasing in monitary value yearly. In 2004, $3.26 million was the average and in 2005, the average was $2.8 million.

Average Salary after Arbitration
2006 – $2.5 million
2005 – $2.8 million
2004 – $3.26 million

Even though the numbers are decreasing, players who enter arbitration are still gaining a 108% average increase in salary after the verdict (or settlement). This is also a significant drop in percentage when compared to 2005 and 2004.

Percent Increase in Salary after Arbitration
2006 – 108%
2005 – 123%
2004 – 126%

In 2006, only 6 players actually followed through with the arbitration process instead of brokering a deal with the Major League team before the suit took place. Of those 6 players, only 2 of them (Kyle Lohse and Emil Brown) won the Final Offer Arbitration hearing.

Less and less players are going to arbitration, which may be a sign that as an Agent, you may want to do everything in your power to create the best deal for your client before the hearing, if at all possible.

As a USAToday article points out, owners have won 269 of the 469 arbitration cases since 1974.

[tags]arbitration, mlb, lohse, brown, salary[/tags]

By Darren Heitner

Darren Heitner created Sports Agent Blog as a New Year's Resolution on December 31, 2005. Originally titled, "I Want To Be A Sports Agent," the website was founded with the intention of causing Heitner to learn more about the profession that he wanted to join, meet reputable individuals in the space and force himself to stay on top of the latest news and trends.

Heitner now runs Heitner Legal, P.L.L.C., which is a law firm with many practice areas, including sports law and contract law. Heitner has represented numerous athletes and sports agents as legal counsel. He has also served as an Adjunct Professor at Indiana University Bloomington from 2011-2014, where he created and taught a course titled, Sport Agency Management, which included subjects ranging from NCAA regulations to athlete agent certification and the rules governing the profession. Heitner serves as an Adjunct Professor at the University of Florida Levin College of Law, where he teaches a Sports Law class that includes case law surrounding athlete agents and the NCAA rules.

One reply on “The Arbitration Battle: Advatange – Team”

[…] 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?]. […]

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