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Wednesday, December 02, 2020

Let’s Fix MLB’s Salary Arbitration System: The Arbitrators

So how can we fix this? There are three fairly straightforward changes to the salary arbitration system that would likely address these problems. First, the arbitration panel could be required to issue a written memorandum opinion for each decision it reaches, and to make those memoranda available to the MLBPA, player reps, and team front offices. We don’t need to make it public, for obvious reasons; a player’s value doesn’t need to be judicially determined in a public forum. And we don’t need thousand-page tomes. But a few pages explaining what the arbitrators found persuasive, how they reached the decision they did, and why they rejected the losing arguments, would go a long way towards creating a measure of predictability and accountability in the process that is, right now, lacking.

Second, teams and player representation should both be required to disclose to the arbitrators, and the other side, their own proprietary measures of that player’s value. If a team is claiming at arbitration that a player is worth $5 million in arbitration and not the $8 million he is requesting, the player should know if the team’s own internal valuations show him as being worth $16 million. How those numbers were calculated can be kept confidential except as is necessary, but there is a lack of transparency in the present process that allows the parties to take contradictory positions that don’t serve the interests of the process.

 

RoyalsRetro (AG#1F) Posted: December 02, 2020 at 09:28 AM | 23 comment(s) Login to Bookmark
  Tags: arbitration

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   1. Rally Posted: December 02, 2020 at 10:32 AM (#5992018)
The part about teams disclosing measures of a player's value is silly. Teams probably have multiple valuation systems to look at. Plus for this purpose there's no incentive to be honest about it. They'll give you an internal estimate of Cody Bellinger's value that makes Manfred's discussion of 2020 losses look honest.
   2. RoyalsRetro (AG#1F) Posted: December 02, 2020 at 10:34 AM (#5992020)
At this point, why even have an arbitrator in the process? Why can't they tie pre-FA salary to some mutually agreed-upon objective measure?
   3. Buck Coats Posted: December 02, 2020 at 10:40 AM (#5992023)
Because there is no mutually agreed-upon objective measure? Or to put it another way, this IS the mutually agreed-upon objective measure.
   4. RoyalsRetro (AG#1F) Posted: December 02, 2020 at 10:53 AM (#5992027)
Well it's dumb! A mutually agreed upon formula would create more certainty than the subjective whims of some arbitrator something I would think owners and players would appreciate more.
   5. Buck Coats Posted: December 02, 2020 at 10:56 AM (#5992028)
Yeah but I mean considering contracts aren't allowed to have incentives based on anything other than playing time, it doesn't seem likely to me that they would want to codify stat-based incentives for arb players.
   6. RoyalsRetro (AG#1F) Posted: December 02, 2020 at 11:03 AM (#5992031)
I mean, their arbitrators are making their decisions based on stats, and dumb ones at that, so....

I get what you're saying but I don't see why the union and ownership can't negotiate some sort of agreement to base it some formula, whether its WAR or something else. The cost certainty would be beneficial to both sides.
   7. Rally Posted: December 02, 2020 at 12:54 PM (#5992055)
I would not want WAR to be used in that way. Ok as a guideline that both agents and teams use to determine their offers/asking prices, but not as a set salary input.

WAR gets updated now and then for what seem to be good reasons. It does not look good if those updates give or take real money away from players.
   8. RoyalsRetro (AG#1F) Posted: December 02, 2020 at 01:16 PM (#5992059)
Ok as a guideline that both agents and teams use to determine their offers/asking prices, but not as a set salary input.


Okay, but right now "Hitters are typically evaluated using batting average, home runs, runs batted in, stolen bases and plate appearances.....Pitchers typically are evaluated using innings pitched and earned run average. Starting pitchers are rewarded for wins, and relievers are rewarded for saves and holds. ". Yes, advanced metrics are starting to infiltrate, but why not just go all the way and take the subjectivity out of it? I'm not saying WAR is perfect, just that its an improvement over the status quo.
   9. Captain Supporter Posted: December 02, 2020 at 02:11 PM (#5992073)
The part about teams disclosing measures of a player's value is silly.


Its not only silly, its so silly it negates any credibility the writers might have. I can't even begin to imagine the thought process that could have led to the conclusion that this might be a good idea.

I get what you're saying but I don't see why the union and ownership can't negotiate some sort of agreement to base it some formula, whether its WAR or something else


This would work well only if you assume WAR is a true measure of future value. Which it isn't. It would, however, be popular with veteran players because they would be rewarded for past performance, not future expectations. But I can't imagine that clubs would (or should) find this remotely acceptable.
   10. Jay Seaver Posted: December 02, 2020 at 02:14 PM (#5992074)
Wouldn't the best reason not to use a formula for arbitration be the fears of gaming it? WAR is a counting stat with known inputs, so a team that's out of contention (or close enough for the front office) might tell the manager to sit an arbitration-eligible player for prospects in September, or an agent might say they might as well swing for the fences or say they've got back spasms in games against tough lefties, etc. Sure, this would probably be pretty small potatoes in most cases - teams usually won't decide they're out until too late to really swing the statistics - but it introduces another way in which money concerns can directly impact the game on the field.

I'd like it if baseball could do away with arbitration because it seems like it's a system built as much to cause hard feelings as create a fair result (and as such favors the corporation rather than the individual in the short term), but I'm not sure how an "objective" system would work unless neither side actually knew the formula involved.
   11. Mike Webber Posted: December 02, 2020 at 02:30 PM (#5992076)
@8 - is one of the main parts of the problem the lag time in the system? You only get new data points once a year. While now most teams want to pay based on WAR, the system still is bogged down with data from previous decisions based on old timey stats. The club has the choice to let the player go, or pay a number high enough prior to arbitration that player won't want to take the case to arbitration.

It seems unfair now because we are in the transition period, but eventually enough data points will make it go the other way.


From TFA
Second, teams and player representation should both be required to disclose to the arbitrators, and the other side, their own proprietary measures of that player’s value.


I know I have read in the past that proprietary stats are essentially not admissible in arbitration. I'm maybe missing the point they are trying to make here, but if the authors are suggesting that arbitrators are being swayed by some club/agent's exclusive WhozitWhatzit system, that isn't happening.
   12. RoyalsRetro (AG#1F) Posted: December 02, 2020 at 02:35 PM (#5992077)

This would work well only if you assume WAR is a true measure of future value. Which it isn't. It would, however, be popular with veteran players because they would be rewarded for past performance, not future expectations. But I can't imagine that clubs would (or should) find this remotely acceptable.


I'm talking about for arb-eligible players. And they already reward players for past performance, not future expectations, arbitrators aren't using ZIPS.

WAR is a counting stat with known inputs, so a team that's out of contention (or close enough for the front office) might tell the manager to sit an arbitration-eligible player for prospects in September, or an agent might say they might as well swing for the fences or say they've got back spasms in games against tough lefties, etc.


Again, how would this be any different than the current system? RBI is a counting stat too!
   13. Jay Seaver Posted: December 02, 2020 at 03:02 PM (#5992084)
Again, how would this be any different than the current system? RBI is a counting stat too!


There are people involved, mainly - the arbiter can listen to the team's rep say "85 RBIs is below average for his position" and the player's say "they had him hitting behind Bengie Molina AND sat him for most of September" and decide how much credence to give them. Who do you put on the panel that knows enough about all this and isn't too far biased one way or the other (IIRC, it was an issue ten years or so ago that most of the arbiters were only familiar with the basic bubble-gum card stats)? That I don't know. I'm just saying that using a formula gives management and players not just a reason to change how they play for reasons other than winning the game in question, but a clear road map for how to do so, which is A Bad Thing.
   14. Ron J Posted: December 02, 2020 at 03:08 PM (#5992085)
#11 It's not so much that proprietary stats aren't admissible as it's a presentation on the clock to a professional skeptic. The guy who did a high percentage of the presentations for ownership for a long time had his own standard toolkit and was willing to take the time to explain why he was introducing it.

And for others in the thread, it's worthwhile to remember this point (made by Bill James in his article on arbitration). Arbitration is not really about how good a player is. It's about identifying the most comparable players and what they make. And that the presentations have next to nothing to do with who wins. Arbitration cases are won and lost in the filing.

Now I get that this article is about setting up a completely new system. I think that no matter how sensible the proposal, change to a well established system is always going to be hard given that there's a lack of trust.
   15. What did Billy Ripken have against ElRoy Face? Posted: December 02, 2020 at 03:16 PM (#5992086)
It would, however, be popular with veteran players because they would be rewarded for past performance, not future expectations. But I can't imagine that clubs would (or should) find this remotely acceptable.
Come on. Think of the caterwauling from the players about "letting the nerds in their moms' basements determine how much we get paid!" Can you imagine, say, Eric Hosmer's reaction?
   16. Walt Davis Posted: December 02, 2020 at 04:46 PM (#5992100)
Seems mostly like a solution looking for a problem. Only a handful of cases actually go to arbitration which is one of the main goals of arbitration -- over time, everybody understands how the system works, knows about how things will go if they actually go to arbitration, come to an agreement at that amount beforehand.

Arbitration salaries and standards also are (or seem to be) affected by FA salary criteria. The article mentions that arbitrators don't seem to put much stock in defense, ascribes this to difficulties explaining UZR or DRS or whatever. (Statcast not yet allowed to be used.) Leaving aside whether it's really that difficult, it's also the case that the FA market rarely rewards defense either, certainly not to the extent it rewards hitting. There are a few exceptions -- Heyward and Crawford spring to mind, see how those turned out. Does anybody think Andrelton is gonna get paid like a 5-6 WAR player? From 2016-19, he had nearly as many WAR as Rendon (and higher WAR/650) but do we think he would have gotten even 2/3 of what Rendon got? Bats pay big, gloves don't.

I didn't really see how the solutions solved the supposed problems. If it's too difficult to explain defensive stats or WAR to an arbitrator, what is the point of divulging proprietary stats. The written opinion idea seems fine but how long do you think those would stay confidential -- it would be 15 seconds before Boras was on the phone to Heyman who would report "sources close to Simmons say the arbitrator found Boras's presentation about his fabulous defense persuasive." But I don't think written decisions would have much value to either side anyway -- it's two numbers, usually pretty close, pick the one you think is closest to true value. Such a decision is always going to be pretty arbitrary -- even if it's WAR-based it will be "his 9.7 WAR over the last 3 years slots him between player A at 9.4 WAR and player B at 9.9 WAR so ..." not to mention bWAR, fWAR, whatever BPro is doing these days, team proprietary measures, Boras proprietary measures.

It's not wisdom of the masses really but the principle is along those lines -- teams can't make ridiculously low offers, players can't ask for ridiculously high amounts, the last 5 years' of negotiated/arbitrated salaries can't have been too crazy so they're a perfectly solid precedent. They note the "accuracy" of MLBTR's arb estimator -- I assume it is but then service time, playing time and some rough categorization of very good, good, average, below-average (including award voting when relevant) is probalby doing most of the heavy lifting there and I doubt it matters much what player stats you plug into that model.

Anyway, the finer points of arbitration awards is about the least of MLB/MLBPA contentious issues. From MLBPA's persective, I think the key issue related to arbitration is that if teams are increasingly shifting PT to pre-FA players and cutting late-career salaries, then the MLBPA needs to shift more of the earning potential to the early years which means completely revamping the reserve/arb system which is gonna require a strike I suspect. From the owners' perspective, I'm very happy with the system as is and would be thrilled if all MLBPA wanted was to get a more "rational" arbitration system that paid players 60% of what they're "really worth" rather than 60% of "what they're worth based on trad stats."

EDIT: And I'll admit that, most of the time, about all I look at for pitchers is IP (if they're a starter) and ERA+; frequently Ks and BBs if I'm projecting; sometimes FIP (I should probably use this more often, would like b-r to add FIP+). I really don't look at pitcher WAR a lot while I nearly always look at it for position players. (I'd also be fine if b-r switched to "-" pitcher stats like fangraphs but, possibly just out of habit, I find b-r much easier for player look-up so will nearly always default to their available stats.) Granted I don't look at wins or saves much less holds ... don't pay much attention to batter counting stats other than PAs.
   17. Bhaakon Posted: December 02, 2020 at 05:41 PM (#5992113)
At this point, why even have an arbitrator in the process? Why can't they tie pre-FA salary to some mutually agreed-upon objective measure?


Goodhart's Law/Campbell's Law/Lucas's Critique. They're all basically the same idea. Specifying an agreed upon metric immediately makes that metric a target of manipulation. There's no such thing as an honest objective measure when one side has both the ability and incentive to thumb the scales of that measure to their exclusive benefit. If teams are willing to take on-field hits to game the service time clock or prevent players from reaching playing time bonuses, there's no reason to think they wouldn't do the same with arbitration awards. I wouldn't be surprised if it's already happening now, though I suspect the ambiguity in the current process makes it a bit of a harder sell. I wonder how much weight a legitimate-looking argument of playing time suppression carries with an arbiter.
   18. Zach Posted: December 02, 2020 at 08:08 PM (#5992140)
Arbitration isn't a valuation system, it's a system to settle disputes. Players wanted the opportunity to make their own case for what they should be making. Having an official valuation system would defeat the purpose.
   19. Walt Davis Posted: December 02, 2020 at 08:52 PM (#5992164)
#18: Fair enough but that was a decision they made 40 years ago (and keep remaking but maybe more out of "if ain't broke" common sense). The principle of it isn't particularly relevant anymore so the MLBPA should be open to any more efficient, independent system that produces the same result. Not that such a system exists but not much point rejecting any candidates out of a desire to argue their case. And easy enough to accommodate through some sort of "appeal" process if the objective number isn't to a player's liking.

The closest you could come to an independent system is to turn it over to some sort of independent agency to set the value ... y'know, some sort of "independent arbiter". :-)
   20. Lowry Seasoning Salt Posted: December 02, 2020 at 11:47 PM (#5992201)
The principle of it isn't particularly relevant anymore so the MLBPA should be open to any more efficient, independent system that produces the same result.


I say this aware I'm not informing you of anything... Arbitration for players nowadays is basically service time + quality. Aaron Judge's salary keeps going up ($8.5M last year) but lack of playing time from injuries means he's delivered less performance/value every year since his rookie season. And we know arbitration-eligible players always see their salary go up compared to the preceding season as long as the player and team find a middle ground or go through arbitration. So getting MLBPA to agree to a new method will have to retain that guaranteed-raise quality which has become an unintended consequence of the current system. Hard to imagine owners wanting that or some all-new method that removes that while retaining player support.
   21. Zach Posted: December 03, 2020 at 04:34 PM (#5992311)
#19 -- I think it is relevant, though. You go to arbitration because one party (usually the player) has a beef about what they're being offered. Improving the system would help a little, but what you really want is for the parties to reach a negotiated agreement or, if worst comes to worst, everybody gets their day in court and gets to make the best argument they can.

Say you're Ichiro Suzuki. You're a great hitter and a huge star in Japan, but the system (we're assuming) doesn't like singles hitters, so it spits out a low number. If the goal is dispute resolution, the best policy would be to encourage you to state your case as clearly and convincingly as you can, rather than simply saying "singles aren't as valuable as walks plus power."
   22. Walt Davis Posted: December 03, 2020 at 11:24 PM (#5992367)
You'll note I wrote "more efficient, independent system that produces the same result" -- though I do mean in a sort of "on average" sense. If singles-hitter Ichiro is undervalued in the current system, no new harm if he's under-valued in the next. Or if a new system shifts from under-valuing one type of player to under-valuing a different type. But sure, realistically I don't think such a system exists and, even if it did, any realistic politically acceptable solution would include some sort of human appeal process. Only a handful of cases actually go to arbitration, the players win fewer than half of those so an automated system that spit out sensible numbers would achieve pretty much the same result. Such a system might also lead to a more "fair" reward structure -- i.e. the "right" players getting the biggest awards. But it works just fine as is, no need for any tampering.

that guaranteed-raise quality which has become an unintended consequence of the current system.

I don't know what this means. The system was always designed to reward players based on service time and quality. I don't recall if it was part of the original agreement but the limitation that the max pay cut is 10% has been around for a long time.

<i>Article VI, Section E, Part 10 (a) - (c) of the CBA governs the scope of permissible
information in a salary arbitration hearing:
(10) Criteria
(a) The criteria will be the quality of the Player’s contribution to his Club during
the past season (including but not limited to his overall performance, special qualities of
leadership and public appeal), the length and consistency of his career contribution, the
record of the Player’s past compensation, comparative baseball salaries (see paragraph
(11) below for confidential salary data), the existence of any physical or mental defects
on the part of the Player, and the recent performance record of the Club including but not
limited to its League standing and attendance as an indication of public acceptance
(subject to the exclusion stated in subparagraph (b)(i) below).

From

here
   23. Lowry Seasoning Salt Posted: December 03, 2020 at 11:45 PM (#5992370)
Thanks for that CBA excerpt, Walt.

I've just always thought it strange how if a guy goes through arbitration (or would have if the team and player didn't reach an agreement), he's basically guaranteed a raise. To stick with Aaron Judge, he has continued to appear in a decreasing percentage of the team's games. This being his second arbitration year, his numbers were down, too. So he played less and played worse, but he'll get a raise. But he's got more service time—which seems to fall under "length... of career contribution"—so he gets a raise.

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