This offseason, we have already seen big-time free agents sign over $3 billion worth in total contract value, according to Spotrac. These stories have dominated the off-season, so far, but there is another important deadline for players and teams–the mid-January deadline to reach agreements with arbitration-eligible players that do not yet qualify for free agency. Many casual and even more experienced fans don’t know what arbitration or “team control” is, so let’s dive into the arbitration process.
What is arbitration for MLB players?
Arbitration is the process by which players still under team control determine their salary for the upcoming season in negotiations with the team that holds their rights. This means that a player may only negotiate with the team that controls them and not with any MLB team like free agents do. If players and their team cannot reach an agreement by the mid-January deadline, both parties must submit proposed salary figures and a third-party adjudicator determines the final salary figure in February during arbitration hearings. This is the first time that players are able to make more money than the pre-arbitration minimum salary which they cannot negotiate. Previously this minimum was $570,500 but has increased to $700,000 in 2022. Of course, players can make much more than this minimum in arbitration when performing well.
Who is eligible for arbitration?
Eligibility arbitration is entirely dependent on service time accumulated by a player. Players become eligible for arbitration after completing at least 3 years of service time but before the 6 years necessary to qualify for free agency. A player accumulates service time by spending a day on the Major League 26-man roster or injured list with 172 days equating to one full year of service. If a player is traded during this time, their service time and eligibility travels with them. This means that “team control” is often coveted when it comes to reaching trade agreements.
There is a wrinkle in which a player may become arbitration eligible when between 2 and 3 years of service under the “Super Two” designation. The top 22% of players, based on service time, within this categorization become eligible for a 4th year of arbitration when most players only get 3. It is important to note that these players do not become eligible for free agency a year earlier, but only do get an additional year of salary arbitration. Announced in November, the cutoff for next season’s “Super Twos” is 2.128 years (2 years and 128 days) of service time. This year, this means players like Randy Arozarena, Nathaniel Lowe, Tony Gonsolin, and Daulton Varsho have accrued enough major league service time to qualify for their additional year of arbitration eligibility.
Some of MLB’s top players are eligible for arbitration this year, like Vlad Guerrero Jr, Juan Soto, Max Fried, and Corbin Burnes. Of course, this does not mean all of these players will go to arbitration, it just means they have the right to if they are unable to reach an agreement with their team. In addition to the final free agent signings, this is something to keep an eye on for young players in the remaining time before Opening Day.