Thursday, September 4, 2008
The Great Debate
There is a important issue among us today.
An issue which has plagued the Hardball Dynasty community
for some time now.
it is something that has caused hours of stressful budget reshuffling.
Been the source of broken homes. Even torn the sanity of some.
This issue my fellow owners is a simple one...
What is the best way to handle arbitration cases?
Don't laugh because this is a serious issue. There has been many a discussion on this subject, some good and others bad.
A player is eligible for arbitration if he has accrued 3 seasons of major league experience but no more than 5. The case if not settled before the scheduled hearing will be heard before a independent party. Both sides will then present there case citing reasons the player should be paid X amount of money. The two sides will then submit offers(really almost more bids than anything else), The arbitrator will take into account previous salary, league average for similar players, player demands and finally the clubs final offer. Once the arbitrator has made his decision both sides are obliged to follow the figure of the 1 year deal.
This can be a rewarding exercise to follow. Starting in year 3 let us say you have your young franchise shortstop up for arbitration. His salary break down like this.
Last Year: $327,000
League Average: $4,579,000
Player Demands: $3,780,000
Long Term Contract Demands: 5 years $32,500,000($6,500,000 x5)
You say i don't want to talk long term just yet. Let's go to arbitration.
The hearing rolls around and you win with a new salary of $1,275,000. A savings of $2,505,000
for the season. Quite a win is it not? Fast foward to last arbitration season with the same player
Last Year: $8,900,000
League Average: $8,800,000
Player Demands: $11,500,000
Long Term Contract Demands: 5 years $49,000,000($9,800,000 x 5)
By waiting you saved approximately $8,221,200. Roughly 1,300,000 first year salary with a 15% increase over a 3 year period equating to $4,309,500 over 3 years. Assuming a 15% increase in demands for a total of $12,530,700 over 3 years. This formula assumes you've defeated the player each time.
So you've managed your cheap years just as you wanted to. But now you see that instead of locking up the player young. You've now let the process play out and Will be faced with one of three options. The first is paying the player his long term demands thus costing an extra $16,500,000($3,300,000 more per season). The second is taking the player to arbitration one last time and assuming you win once more(as the above formula shows)run the risk of the player refusing to re-sign with you before free agency. Which could lead to a bidding war you can't afford to win. The last would be taking the player to arbitration once more and losing thus being forced to pay him his $11,500,000 demands and still possibly losing him to free agency.
The process is not always cut and dry. You can save now and pay later or you can pay now and let him walk later when he's older and potentially declining. But at this point the player would still likely garner you a type A pick. The way you handle it is strictly up to your strategy and team philosophy on building a dynasty. There's the prove and then we'll pay method employeed by many a owner. And then there's the Evan Longoria approach, in that we'll pay now for future success to save money for other players down the road.
It's up to you to do what you do. This is the Mange signing off.
This article is also posted on the Duff Beer News Blog