As Zach Locke, a Los Angeles-based attorney who penned a paper last year analyzing the salary arbitration system, wrote: The "popular understanding of arbitration as a way to settle a dispute by having a neutral party decide the best course of action conflicts with the reality that there can be 'winners' like Howard, and 'losers' like Rodriguez."
In salary arbitration, the player presents the higher figure and the club the lower figure. A panel of three arbitrators must choose between the two after arguments are presented by both sides at yet-to-be-scheduled hearings from Feb. 1-21. Those players who elect to possibly go to a hearing must swap figures with their clubs on Jan. 21.Since 1974, when the arbitration system was collectively bargained, only 12 percent of the filings have gone to a full hearing, including eight last year, six of them won by the clubs. Pitcher Oliver Perez was the only other player besides Howard to succeed, getting $6.5 million from the Mets. In the other cases, the two sides agreed to a contract before their hearing was held.
In 2008, of the 110 players who filed, only 48 actually exchanged figures with their respective clubs, and 40 of those were settled without a hearing.Of those that did go to a hearing, K-Rod sought $12.5 million and was awarded the $10 million presented by the Angels, who have since lost him to the Mets this offseason via free agency. Howard asked for $10 million while the Phillies wanted to pay him $7 million. In any event, it was a huge raise for Howard, who earned $900,000 in 2007. Pitcher Chien-Ming Wang lost to the Yankees last year when he was awarded $4 million rather than his request of $4.6 million after winning 19 games in 2007 for the second consecutive season. This time, coming off a foot injury that cost Wang the last three months of the 2008 season, he chose to come to terms with the Yankees, signing a one-year, $5 million deal just before Christmas. Wang earned $489,500 in 2007. It's always a crap shoot in salary arbitration. The clubs seem to have found the right combination and have won most of the cases in recent years, although last year, according to Maury Brown of the Biz of Baseball, the average salary of all 110 players who filed jumped 106 percent from $1.38 million to $3.04 million. And for the 48 players who actually exchanged figures with their clubs, that increase was 220 percent. "To place the arbitration process in perspective, there is a reason that so few clubs and players go all the way to hearing," said Brown, who noted that the owners have beaten the players in arbitration for 12 consecutive years. "The stakes are too high. That and the clubs really lose even when they win. Whether a deal is struck before hearing, or if a club wins at hearing, the player nearly always gets a hefty raise." For example, did the Angels win or lose to Rodriguez in 2008? Sure, K-Rod earned a healthy raise from the $7.1 million he made in 2007. But neither side could have forecast that the right-hander would set a single-season record of 62 saves this past season. Rodriguez parlayed that into a three-year, $37 million deal with the Mets. The Angels replaced him as closer with free-agent left-hander Brian Fuentes, who signed a two-year, $17.5 million deal with Los Angeles this week after being an arbitration loser to the Rockies last year. Fuentes has saved 50 games the last two seasons. "I knew with Frankie on the free-agent market I had a chance to get to Anaheim," Fuentes said. "Being from California, it's always nice to stay here and have that comfort zone. The Angels are a class organization, they're in the playoffs just about every year, and I hear [Mike] Scioscia is a players' manager." Of the eight players who actually went to arbitration last year, five were free agents this offseason. Four have signed with other clubs, including infielder Felipe Lopez (Diamondbacks), infielder Mark Loretta (Dodgers), K-Rod and Fuentes. Only Perez remains on the market. That's actually the way the system is supposed to work. Salary arbitration was established because the owners at the time tried to maintain the reserve clause and ward off free agency, which was awarded by an arbitrator anyway two years later. The first derivation of the current free-agency system was collectively bargained in the Major Leagues, beginning with the 1977 season. Currently, clubs control the contracts of almost all players with zero to three years of Major League experience, save for a small group of "Super Two" players who are eligible for arbitration early if they played in the Majors at least 86 days in the previous season and were among the top 17 percent in cumulative playing time in that group with at least two to three years of experience. Otherwise, players with three years of experience, still bound to their originating clubs, can file for salary arbitration until they are eligible for free agency after their sixth full season. Howard is an anachronism in the system. He didn't come up for good until he was 25 years old in 2005 and won't reach his zenith as a free agent until he's 32 after the 2011 season. In comparison, first baseman Mark Teixeira, who just signed with the Yankees as a free agent to an eight-year, $180 million contract, is 28. Thus, the Phils evidently feel no urgency to sign Howard long term and he has no compunction about playing the arbitration system.
Barry M. Bloom is a national reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.