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MLB proposes determining arbitration salaries by using the WAR statistic, per report

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Owners have made a new proposal that would change the way salaries for arbitration-eligible players are determined, report Evan Drellich and Ken Rosenthal of The Athletic

Presently, players who take their salary disputes to arbitration have their salaries determined by an arbitration panel. In that process, the player and team each submit a proposed salary for the upcoming season, and the panel picks one or the other — no splitting the difference between the two proposals. Each side is allowed to argue for its chosen figure, which in essence means that the team must diminish the accomplishments of the player in question. 

Under the owner’s latest proposal, the salaries of arbitration-eligible players — i.e., those with between three and six years of MLB service time, in most cases — would be determined by algorithm. Drellich and Rosenthal write: 

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This time, MLB is offering to pay players based on performance, specifically on a calculation of wins above replacement, or WAR. There are multiple variants of WAR, but MLB proposed to rely on FanGraphs’ version, or fWAR. A player’s career WAR would be part of the calculation, weighted for recency. Whether a player has been in the majors for three-plus, four-plus, or five-plus years would affect the calculation.

You can read more about WAR here, but the short version is that it’s an all-encompassing metric that aims to measure a player’s total value in all phases of the game. It’s a blunt instrument, to be sure, but it remains useful and illuminating in the proper context. 

This proposal is in essence of a revision of the owners’ prior proposal, in which they floated the idea of setting aside a pool of money dedicated to arbitration salaries each year. That, however, would be a de facto cap on the salaries of arbitration-eligible players, and the Players Association isn’t going to go for that. As Drellich and Rosenthal note, this revised approach to salary arbitration is also probably a non-starter with the union, as broad-scope metrics like WAR are not designed and are not fit to determine something as important as player salaries.

For all the flaws of the current system, it does incentivize negotiating between player and team (most arb-eligible players and their teams agree to contracts before the time comes for a hearing before the panel), and the “pick one or the other” nature of it forces good-faith salary proposals from each side. 

The discussions over a new approach to salary arbitration are part of a much larger negotiation over the next collective bargaining agreement (CBA), which is the accord that governs the working relationship between players and owners. The current CBA expires on Dec. 1, and if a new one isn’t agreed to by that time then a lockout by owners is a distinct possibility. How to compensate players more fairly before they reach free agency — and how soon they reach free agency — will be hotly contested territory in these talks. 

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