The Taiwanese right-hander was awarded a 2008 salary of $4 million instead of his request of $4.6 million in a decision by arbitrators Stephen Goldberg, Jack Clarke and Christine Knowlton, who heard the case on Thursday in St. Petersburg at the Renaissance Vinoy Resort and Golf Club.
"We are gratified and happy to have prevailed in this arbitration hearing," Yankees president Randy Levine said in a statement. "It is important to recognize and thank our entire team for their hard work throughout this process, including Brian Cashman, Jean Afterman and Mike Fishman from the Yankees, Rich Rabin, Ken Shaitelman and Kelly Brown from Akin Gump Strauss Hauer and Feld, and Rob Manfred, Dan Halem and Paul Mifsud from the Commissioner's Office.
"It has been nearly eight years since this organization has gone to arbitration, and we do not pursue this process lightly. The Yankees only go to arbitration when we think the player and agent's demand is over the proper market.
"We want to congratulate Mr. Wang and his representatives on their efforts. They did a credible job. It should be noted that the $4 million figure which we submitted is the highest arbitration award ever for a first-time arbitration-eligible starting pitcher. Therefore, this should not be viewed as 'a loss' for Chien-Ming Wang. He is a valuable member of our team and we felt that we had reflected this in our filing number."
The 27-year-old Wang earned $489,500 last season, when he was 19-7 with a 3.70 ERA in 30 starts for the Yankees, walking 59 and striking out 104 in 199 1/3 innings.
The 19-win season was his second such campaign in a row, making him the Major Leagues' winningest pitcher over the past two years, but he also struggled last October, losing twice in the American League Division Series to the Indians.
Major Leaguers haven't had much luck in arbitration this year, as Wang was the fourth of four players to lose a hearing. Nationals infielder Felipe Lopez lost his case on Thursday, and relievers Brian Fuentes of the Rockies and Jose Valverde of the Astros lost on Friday.
This was Wang's first year of arbitration eligibility, and he will not reach free agency until 2011.
Some speculated that the Yankees might have interest in pursuing a long-term extension with Wang -- as New York did with second baseman Robinson Cano -- but general manager Brian Cashman said that this was not the proper time, given the inherent risk in locking up young pitchers to lengthy contracts.