"The formal deadline to reach a deal is 1 p.m. ET. The real deadline is 8 p.m. Most will come to an agreement. Some will not. Those players will file a number they want to be paid. The teams will counter with a lower number -- sometimes hilariously lower, such as the mere $25,000 spread that nearly sent Casey Mize and the Detroit Tigers to a hearing in 2024."
"The league wants to shutter salary arbitration, erase the potential acrimony and replace it with a formula that pays players for performance -- similar to the pre-arbitration bonus system put into place in 2023 that awards those who have yet to accrue enough service time (typically three-plus years) to reap the relative riches of arbitration. Beyond the league's derision, front offices generally abhor the time spent on a process that winds up, they argue, very close to where it would in a formula-based system."
Arbitration season involves roughly 170 players negotiating salaries with teams under formal and informal deadlines; most settle, while some proceed to hearings. Players file desired salaries when settlements fail and teams counter with lower figures, occasionally producing tiny spreads that nearly force hearings. Unsettled cases go before a three-person panel where teams publicly critique players. The league proposes replacing arbitration with a performance-based formula similar to the 2023 pre-arbitration bonus system to reduce acrimony and inefficiency. Front offices favor efficiency; players retain arbitration because it generates tangible financial leverage and often higher pay than formulaic alternatives.
Read at ESPN.com
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