Last week, Marc Carig of the Athletic reported that shortly after season’s end, teams get together to discuss how to keep arbitration salaries down. It’s a major drag, sitting in a banquet hall for hours on end, talking about how to suppress the wages of the people most responsible for the sports’ success, so at the end, the team who colluded the best is awarded with a replica championship belt.
In case you didn’t immediately subscribe to The Athletic using offer code: OH HI GRANT, here’s the meat of Carig’s story:
The ceremony ends with the presentation of a replica championship belt, awarded by the league to the team that did most to “achieve the goals set by the industry.” In other words: The team that did the most to keep salaries down in arbitration.
Those versed in arbitration describe efforts that encourage teams to hold the line in negotiations, even when differences are relatively small, because the results will eventually have a larger impact in setting future comparables. In essence, it is worth fighting for pennies, because even pennies pile up over time.
Any time a team can deny a player what they’re supposed to get, it’s a win for the teams. The more players get in arbitration, the more future players will get. As far as I can deduce, there are three basic strategies teams employ to keep arbitration salaries down.
File and Trial: Historically, teams have been more successful at winning arbitration hearings, but as panels have gotten more analytically savvy and teams have become increasingly frugal, this wasn’t as successful this winter. The Giants haven’t gone to an arbitration hearing since AJ Pierzynski was on the team, but that doesn’t mean the Giants haven’t offered some players an ultimatum: accept what we’re offering now, or accept a lower figure after we say mean things about you to some lawyers.
Non-tender a player who took a step forward: Players are payed based on performance, so if a player improves dramatically, their pay will also increase. Since players in arbitration tend to earn more in each subsequent year, teams can nontender these players, so they sign for below market rates with another team. Think the Rays and CJ Cron this year or the Rays and Corey Dickerson last year.
Sign the player to an extension instead: Now that teams are seeing that they’ll lose the arbitration hearings, they’ve decided it’s better to sign the player to an extension, so they avoid arbitration altogether. Nolan Arenado was going to obliterate the arbitration record this year, so the Rockies signed an extension. Now when Mookie Betts goes to arbitration next year, he’ll say, “I want more than what Josh Donaldson got,” not “I want more than what Arenado got.” This is a win-win. Teams win because they prevent superstars from moving the arbitration needle up, and teams win because they get to pay a player less than they would make in arbitration just for the promise of paying them below market rates for their prime years of free agency.
I’ve looked at every group of arbitration-eligible players the Giants have had since 2012 to gauge the likeliness that the Giants won the collusion belt. Each year, I’ve assigned a score of one-to-five Macho Mans, one Macho Man signifying that the Giants had no shot of winning the belt, and five Macho Mans meaning it was incredibly likely the Giants won it.
In the first year of the Farhan Zaidi era, the Giants non-tendered Gorkys Hernández, who tied for the team lead in homers, because he was going to make $1.6 million. On Opening Day, the Giants started a Rule 5 guy and someone who got DFA’d after 8 plate appearances. They also waited until the deadline to settle with Will Smith, and gave Sam Dyson and Joe Panik less that what was expected.
Score: 4 Macho Mans
The only player they non-tendered was Tim Federowicz. Everyone else got roughly what they were projected.
Score: 1 Macho Man
The Giants tendered everyone and even gave Conor Gillaspie half a million more than his projected salary for no other apparent reason than hitting this home run:
Score: 1 Macho Man
The Giants non-tendered Yusmeiro Petit and Hector Sánchez. Petit wound up signing a contract worth about what he would have made in arbitration while also being really good. At least the Giants didn’t need a reliable bullpen arm in 2016. Sánchez struggled to find his way onto a major league even though he can hit.
This was also the year the Giants signed the Brandons to extensions. In both cases, they gave the players exactly the projected arbitration salaries and tacked on a normal market value contract on the end of it.
This isn’t like the Aaron Nola extension or the Ronald Acuña extension in which they got paid less than they would have made in arbitration, but less than what they would make in free agency. These were just fair deals to lock up good players with a few extra years tacked on the end as a show of good faith. No wonder Bobby Evans got fired.
Score: 0.5 Macho Mans
This year, the Giants waited until the deadline to settle with Casey McGehee. The Giants originally offered $4 million. They eventually gave him $4.8 million. Casey McGehee was DFA’d before the end of May.
Score: 0.5 Macho Mans
The lone non-tender going into the 2014 season was Jose Mijares. Mijares was coming off a year in which he struck out nearly 10 batters per nine innings, but suffered from a .410 BABIP. He posted a career best FIP and SIERA.
He also got suspended for a PED violation and never threw a major league inning again.
The Giants get a little credit for saving $2.1 million on a replacement-level reliever.
Score: 2 Macho Mans
In March of this year, the Giants signed Buster Posey to a nine-year extension. The contract paid him $57 million through his arbitration years. At the time, it was the third-highest amount a player had ever received, and nearly triple what any catcher had received for their arbitration years.
It’s also more than three times what Yasmani Grandal made and what JT Realmuto figures to make. Grandal and Realmuto don’t have the pedigree that Posey has, but had Posey been allowed to go to arbitration he would have shattered records for catchers. Grandal and Realmuto would have been able to say, “We’ve been about as good as Posey, and we want close to what he got.” Instead, teams can tell those players that if they want a Posey, they have to sign away their prime free agent years.*
*Which maybe Grandal should have done.
The Giants took one for the teams. They paid a fair price for Posey which allowed other teams to underpay Grandal, Realmuto, Gary Sanchez, and plenty of catchers to come.
They also non-tendered Brian Wilson because he was hurt and slated to make $8.5 million.
Score: 5 Macho Mans
The Giants tendered everyone except Eli Whiteside and Jeff Keppinger and paid them what they were worth.
They also signed Madison Bumgarner to an extension that not only paid him far less than he was worth while totally hosing Bumgarner since he’ll command far less in free agency following the 2019 season than he would have if he had entered free agency normally.
Score: 4 Macho Mans