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Volume 2, Chapter 11 Salary arbitration

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Presentation on theme: "Volume 2, Chapter 11 Salary arbitration"— Presentation transcript:

1 Volume 2, Chapter 11 Salary arbitration

2 Pro Sport c8-salary Salary arbitration Settle salary disputes between team and player when negotiations for salary fail Submitted to neutral arbitrator, decide precise amount of compensation Limited to issues of compensation and rights for players and the team he plays for Eligibility for arbitration: determined by CBA According to experience, sometimes performance Player’s case presented by agent/lawyer Usually assisted by representatives from players’ association at the hearing Grievance arbitration: interpret and enforce rights already created by CBA

3 Salary arbitration in MLB
Pro Sport c8-salary Salary arbitration in MLB Eligibility: experience, performance The Association and the Major League Baseball Labor Relations Department shall annually select the arbitrators A panel of 3 arbitrators in each case In the event they are unable to agree by January 1 in any year, they jointly shall request that the American Arbitration Association furnish them lists of prominent, professional arbitrators.

4 Pro Sport c8-salary Role of arbitrators Consider Performance, leadership, public appeal, length/consistency of career, previous salary, salary of similar players, physical/mental defects, team performance, attendance NOT considered: financial position of player and team, press comments, testimonials Select offer of either team or player Can NOT reveal reasons of decision

5 Pro Sport c8-salary Super Two in MLB The service time cutoff for Super Two is determined by the Major League Baseball Players Association each season, equating to the senior (service length資歷) 22% of players who have accrued between two and three years of service time and at least 86 days of service in the just-completed season two years and 122 days at the end of 2010 two years and 139 days at the end of 2009 Arbitration eligible from 3rd to 6th year FA after 6 years

6 Pro Sport c8-salary

7 Pro Sport c8-salary

8 Pro Sport c8-salary

9 Pro Sport c8-salary

10 Salary arbitration in free agents (before 2012)
Pro Sport c8-salary Salary arbitration in free agents (before 2012) Another class of arbitration-eligible players: free agents with >6 years of service Original team has option of offering arbitration A team must offer arbitration in order to get draft-pick compensation if the FA sign with other team If the FA accept arbitration, he is no longer FA and becomes bound to his current team (usually ned in prehearing salary agreement) If the FA reject arbitration (in most cases), he can sign with any (including his original )team

11 Qualifying offer to FA (2013-)
Pro Sport c8-salary Qualifying offer to FA (2013-) teams have the option of making qualifying offers to any players who were with the team all season long Salary: average of the top 125 salaries from the prior year $13.3 M in 2012, $14.1 million in 2013 signing a player who has rejected a qualifying offer lost a first-round pick rather than going to the player's old team, it just disappears.

12 Salary arbitration in NHL
Pro Sport c8-salary Salary arbitration in NHL Eligibility: age, experience Roles of Arbitrator ‘only’ consider performance, compensation of players in similar situations Determine 1- or 2-year contract, salary, bonus, explanation of reasons for decision Salary can be either offers or ranging in between Decision is final and binding on the parties

13 Salary arbitration in NHL
Pro Sport c8-salary Salary arbitration in NHL Owners have walk-away right: right to reject award 3 times in 2 years, no more than twice in same year, used only 2 times Player become FA after rejection, If unable to obtain better offer from other team, he can return to previous team with offer prior to becoming FA

14 Comparison of salary arbitration between NHL and MLB
Pro Sport c8-salary Comparison of salary arbitration between NHL and MLB Encourage player-owner negotiation Very few filed cases go to arbitration No exchange of briefs before hearing, NHL require parties to exchange briefs 48 hrs before hearing Making reasonable offers NHL tend to make extreme offers, knowing arbitrator likely to choose close to midpoint MLB tend to make reasonable offers: arbitrator consider salary higher or lower than midpoint of both offers

15 Comparison of salary arbitration between NHL and MLB
Pro Sport c8-salary Comparison of salary arbitration between NHL and MLB Consider performance, salary of comparable players NOT financial situation of teams Rich team pay more  higher salary across league Not hold player responsible for financial health of team Salary arbitration NOT set up players’ market, but rather follows it Based on comparable players’ salary, only following trend set up individually negotiated contracts Few owners give high salaries, market value of players rise at such a tremendously fast pace

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