The Current Status Of Salary Arbitration In Japanese Baseball

No game is growing as fast internationally as professional basketball.  However, baseball is not as far behind as some people may think.  Dynasty recently placed a player in Germany, last year we signed an MLB-affiliated player who played his entire life in Italy, and we were close to signing a player with either a Korean or Taiwanese team this past offseason.  Korea, Taiwan, and the most popular Far East baseball destination of Japan, receive the most acclaim as providing high level professional baseball competition outside of the United States.  The Far East has a baseball market that is viable for many proficient MLB players, and should always be considered as a potential option for talented clients.  Since leverage is the name of the game, you always want to remind management that there are other options out their for your clients (without sounding too threatening).

Anyway, if you are going to place your players in an overseas market, you should know as much as possible about that market.  Salary arbitration is a big component of Major League Baseball.  Did you know that it is also an option within Nippon Professional Baseball (NPB)?  NPB is Japan’s top professional league.

David L. Snyder has a piece in the Marquette Sports Law Review’s Fall 2009 issue titled, Automatic Outs: Salary Arbitration in Nippon Professional Baseball.  If you are a regular reader of this site, you can skip to Section III of the paper, as you should already be well versed on MLB’s final offer salary arbitration system.  Section III covers labor relations and salary arbitration in the NPB.

The NPB does not have a collective bargaining agreement; the owners decide the players’ terms and conditions of employment.  A union amongst its players was established in 1985, and there has only been one players strike since then (in 2004).  It was not until 2001 that players were allowed to have agents represent them in contractual negotiations, and still today, agents must also be Japanese attorneys and Japanese citizens to have the right to represent one, and only one, NPB player.

The owners decided to create a salary arbitration system, and thus, it is something that is inherently beneficial to them.  This is how salary arbitration is implemented,

“If a player is dissatisfied with the terms of his contract for the upcoming season, and he and the team cannot reach an agreement on a salary figure, then the player can petition the league president for salary arbitration.”

If the league president says no, then it is tough luck for the player.  And in most circumstances, unless a player has truly exhausted every possibility to reach an agreement with an NPB club, the league president will deny salary arbitration.  That is a big reason why it is very rare for a player in the NPB to even suggest requesting arbitration, which they may do every year if they chose to do so.

If the league president permits a player to go to salary arbitration, the player will then be confronted by a three person panel made up of the NPB commissioner and the 2 league presidents.  Hardly impartial.  Guess who choses the commissioner and league presidents?  The owners.  In the history of NPB salary arbitration, only one player (out of 6) has been victorious.  That is one more than I would have figured before reading that fact.

The players union has tried to convince owners to add player representation on the salary arbitration panels, but the owners have not budged on the make-up of the three person panel.