Belt Tightening

Belt Tightening

April 2, 2019 0 By Dan Freedman

Disclaimer: I may be biased.

I have spent the entirety of my career (save for four months at the very beginning) on the management side of the table. Agents and lawyers representing talent have been my professional foe for as long as I have drawn a paycheck. And while I am often exasperated by their efforts on behalf of their clients, I try to take solace in the fact that they are doing nothing more (or less) than providing zealous representation. I hope they feel the same about me.

When negotiating with talent to work on a collective endeavor, whether it is sports or entertainment, the game is non-zero-sum. In fact, the goal should be to have a winner on both sides. If management wins, they ostensibly have more resources to dedicate to the effort, which makes the likelihood of overall success that much higher. It doesn’t matter if you are talking about a movie deal or a baseball team. If the talent wins, they will be more inspired to excel and produce the best possible product. It doesn’t matter if you are talking about a Broadway stage or the friendly confines of Wrigley Field.

All of which makes baseball’s arbitration system so bizarre. For those of you unawares, baseball arbitration – which is available to players in years four through six of their career – works as follows: the player and his team exchange their desired salary. If they cannot agree, they submit the same to a three-judge panel. Each side is given one hour to argue their case, followed by a thirty minute rebuttal. After hearing both arguments, the panel decides which salary to award. There is no “meeting in the middle” or “splitting the baby.” There is a winner and a loser. In a non-zero-sum arena, this is a zero-sum game.

And here is the kicker, where things get really wonky: MLB rules require that the player be present for the hearing. So, when his team makes their 90-minute presentation to the panel justifying why the lower salary is appropriate and why the player’s higher ask is not, the player is forced to listen to all of the ways in which he is not as good as he thinks he is. Imagine asking your boss for a raise, and then having a seasoned trial attorney spend an hour and half telling you, to your face, why you don’t deserve it. I think I would prefer a simple “no” than suffer that humiliation. The player thinks he is the next Joey Votto, only to be told that he is really the next Joey Cora.

And when this process ends, win or lose, the player must suit up for an organization that told him how they truly feel. Talk about your labor relations.

This system, for the reasons stated above, is totally flawed. But it is the system that was collectively bargained for. Teams and players are incentivized to do their homework, prepare their case, and make their best presentation. By design, one side wins, one side loses. I am certain there are countless other ways in which a just result could be reached. But within the confines of what MLB and the MLBPA negotiated, players go into arbitration seeking to maximize their pay, while teams go in trying to minimize it. The goals are patent; there is no secret.

So when The Athletic reported last week that, at the end of year, when MLB teams have their annual arbitration seminar, they give out a belt to the team “that did the most to achieve the goals set by the industry,” there was a predictable outcry. Tony Clark, the MLBPA executive director responded by saying, “That clubs make sport of trying to suppress salaries in a process designed to produce fair settlements shows a blatant lack of respect for our Players, the game, and the arbitration process itself.”

Really? Is that what they are doing?

Isn’t this much ado about nothing? Why is Tony Clark suddenly clutching his pearls and claiming that teams are making “sport” of the process? Why is Clark totally fine with players being forced to sit idly by while they are run through the ringer in front their bosses, and then told to be happily on their way? With all of the talk about a minor league offers for major league players, and languishing free agents, and service time manipulation, does the fact that teams celebrate the one who was the most efficient really rise to the level of outrage? Don’t we have bigger issues to deal with?

And the idea that celebrating winning (however gauche a belt may be) shows a lack of respect is the same argument that flipping a bat is disrespectful to a pitcher. How can Clark take issue with trying to suppress salaries? Isn’t that the MacGuffin? Wasn’t the system put in place specifically to either suppress or expand salaries?

Belts aside, salaries have expanded…bigly. My questions for Clark would be: Should teams be offended and crying a lack of respect if Nolan Arenado’s representatives had a victory dinner when he received a record-breaking $26M arbitration award? Or if Mookie Betts and his team did a little victory dance when he won his arbitration and was awarded $20M. How about when Josh Donaldson got $23M coming off an injury-shortened season? What about Jacob deGrom’s $17M (up from $7.4M) or David Price’s $19.75M (a 41% raise)? Those salaries didn’t seem too suppressed.

As The Athletic article points out, according to MLB, players have won 18 of 32 hearings in the past two years, a 56% clip (up from around 40% historically). Teams gave out more than three-quarters of a billion dollars this past off-season to arbitration-eligible players. Marc Craig’s article intimates that the fight is unfair insofar as the teams have more information at their disposal, and they share that information amongst themselves. But the statistics above belie that. Players who have the goods, and who make the better presentation, get paid what they believe they are worth.

And let’s not lose sight of what is happening here. Teams are awarded the belt for a job well done. That is, they have taken their ninety minutes and convinced a group of neutral arbitrators that their position is correct. Players have that same opportunity. If you don’t want the batter to flip his bat…make a better pitch. If you don’t want teams to celebrate salary suppression…make a better case.

Again, teams could be a little more circumspect about the manner in which they celebrate their victories, but a $20 plastic belt certainly shouldn’t be the object of our derision. Now, if they gave a belt to the team that best suppressed service time, well, them be fighting words.

As a fan I worry that Tony Clark and the MLBPA are losing the forest for the trees and focusing on the wrong battles. And that makes me very nervous for the next CBA negotiation after 2021.

We are about a week into what looks to be an incredible season. Maybe the belt talk can go away. Maybe we can talk about Fernando Tatís Jr., Pete Alonso, and Chris Paddack breaking camp despite their rookie status; maybe we can talk about Bryce Harper making a home in Philadelphia; or Christian Yelich picking up where he left off. Maybe we can spend less time worrying about the inane actions of front offices and more time just enjoying this wondrous game.