Arbitration
MGT 2106 Legal, Social and Ethical
Aspects of Business
Jody Blanke, Professor
Characteristics
Created by contract
Dispute heard by impartial third party
Legally binding decision
Generally non-appealable
“Favored by the courts”
Advantages
Cheaper
Faster
More expertise involved
Baseball Arbitration
Contractual procedure described in
the Collective Bargaining Agreement
(PDF file) between Major League
Baseball and the Players Association
Eligibility – players with at least
three, but no more than six, years of
Major League service
2007 MLB Calendar
Jan 5-15 Salary arbitration filing.
Jan. 18 Exchange of salary
arbitration figures.
Feb. 1-21 Salary arbitration
hearings.
2007 Salary Arbitration Filings
106 players filed for arbitration
56 players exchanged salary
arbitration figures
2007 Salary Arbitration Figures
Erik Bedard BAL $2.7M $4M
Joe Beimel LA $912,500 $1.25M
Eric Byrnes ARI $4.25M $5M
Miguel Cabrera FLA $6.7M $7.4M
Jose Castillo PIT $1.8M $2.2M
Shawn Chacon PIT $3.7M $4.25M
Chad Cordero WAS $3.65M $4.15M
Michael Cuddyer MIN $3M $4.25M
Doug Davis ARI $5.25M $7.5M
Brendan Donnelly BOS $1.15M $1.65M
Scott Downs TOR $925,000 $1.2M
J. Duchscherer OAK $925,000 $1.45M
Morgan Ensberg HOU $4M $4.9M
Alex Escobar WAS $500,000 $590,000
Johnny Estrada MIL $3M $3.9M
Adam Everett HOU $2.5M $3.4M
Josh Fogg COL $3M $4.25M
Lew Ford WAS $800,000 $1.3M
Geoff Geary PHI $750,000 $925,000
Jody Gerut PIT $800,000 $925,000
John Grabow PIT $765,000 $925,000
Tony Graffanino MIL $2.8M $3.7M
Kevin Gregg FLA $575,000 $700,000
Bill Hall MIL $3M $4.125M
Aaron Harang CIN $4.25M $5.5M
Reed Johnson TOR $2.5M $3.6M
2007 Salary Arbitration Figures
Austin Kearns WAS $3.65M $4.25M
Bobby Kielty OAK $1.925M $2.5M
Jason Lane HOU $900,000 $1.375M
Adam LaRoche ATL $2.8M $3.7M
Felipe Lopez WAS $3.7M $4.1M
Joe Mauer MIN $3.3M $4.5M
Jason Michaels CLE $2M $3.2M
Justin Morneau MIN $4M $5M
Brett Myers PHI $5M $5.9M
Corey Patterson BAL $4M $4.6M
John Patterson WAS $850,000 $1.85M
Josh Paul TB $625,000 $940,000
Wily Mo Pena BOS $1.725M $2.2M
Mark Prior CHC $3.4M $3.875M
Nick Punto MIN $1.6M $2.1M
Juan Rincon MIN $1.6M $2.4M
Alexis Rios PIT $2M $3.1M
Brian Roberts BAL $3.8M $4.6M
Kirk Saarloos OAK $925,000 $1.475M
Freddy Sanchez PIT $2.15M $3.1M
Chase Utley PHI $4.5M $6.25M
Claudio Vargas ARI $2.15M $2.85M
Oscar Villareal ATL $860,000 $1.3M
Todd Walker SD $2.75M $3.95M
Todd Wellemeyer KC $565,000 $740,000
Carlos Zambrano CHC $11.025M $15.5M
Arbitration winners and losers list
2007
Winners
Player, club Asked Offered
Miguel Cabrera, Florida $7,400,000 $6,700,000
Chad Cordero, Washington 4,150,000 3,650,000
Todd Walker, San Diego 3,950,000 2,750,000
Losers
Player, club Asked Offered
Joe Beimel, Los Angeles $1,250,000 $ 912,500
Kevin Gregg, Florida 700,000 575,000
John Patterson, Washington 1,850,000 850,000
Josh Paul, Tampa Bay 940,000 625,000
Baseball Arbitration Facts
Since 1974 (through 2006), clubs have won
269 arbitration hearings (57%) and players
199 (43%).
Since 1990, 88 percent of the players filing
for arbitration settled before a hearing.
In 2006, only 6 of 43 salary exchanges
went to a hearing.
Twice the salary figures submitted by
players were lower than those submitted by
the teams - Mike Edwards (1980) and Mike
Flanagan (1982).