What Is Baseball Arbitration? Things You Should Know!

A. Coatess

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A. Coatess



Sean Hunter

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what is baseball arbitration

Predicaments surrounding pay are not strange in baseball. It is ever-present in all legal human engagements. Conflicts. Disputes. Lockouts. Disagreements. These are inevitable.

But what is preventable is the damage the strain causes and how we can respond to the conflicts. If you call the cards in the dispute due to, for example, an unfair salary, then this article should answer the question, “what is baseball arbitration.”

Everything You Need to Know About Baseball Arbitration


The baseball arbitration definition is the legal process in baseball that involves the parties proposing an award (in the form of money) to the arbitrator. At the end of the hearing, the arbitrator gets to choose one award without changing the terms.

Specific rules governing baseball arbitration restrict the arbitrator from disclosing how one came up with the said decision to the parties to the arbitration. In this way, each party gains an equal platform for strategizing the quality of its proposed award without the influence of suggestions and favors. This rule is to be strictly implemented.

The basis for accepting a party’s award is “reasonableness.” In court, this implies a complex layer of contexts. As such, there is no one definition of reasonableness. Thus, the court of law exists to set the determinants or criteria for a potentially-acceptable award.

Demands for baseball arbitration have increased in the past years, particularly in the game’s business sector. Examples of business engagements in baseball include salary dealings, revenue streams, commercial endorsements, sponsorships, etc.

These commercial lines in baseball demand legal measures, hence the baseball arbitration explained.

Another name for baseball arbitration is final-offer arbitration, which is the last resort for settling a monetary dispute between parties. The expected end of a final-offer arbitration is a binding decision made by a panel of commissioners. It is this same panel that selects the award or offer.

What Are the Benefits of Baseball Arbitration?

Answering this question also answers how the effects of arbitration mean in baseball.

The following are the benefits of baseball arbitration:

  • It sides with the more reasonable claims.
  • It saves the whole trouble of having to litigate.
  • It encourages assessors and decision-makers assigned to accordingly appraise the reasonableness of the merits from the perspective of the now.
  • It decreases or discourages chances of inflated or “bogus” claims.
  • It saves the trouble of unnecessarily spending time and costs.
  • Through its strict baseball arbitration rules, it encourages parties to come up with an honest and critical evaluation of their claimed damages.

What Makes an Arbitration Award Reasonable?

Some rules that define a reasonable baseball arbitration award are concrete, while others are abstract. In this respect, decision-makers, lawyers, and commissioners come in to determine the premise of a reasonable award or offer.

Here are the standards of a reasonable or sound baseball arbitration award at a surface level:

  • It is noted and signed by everyone that makes up the tribunal.
  • It includes information such as the when and where the arbitration took place.
  • It is articulated through writing.
  • It must be provided as a signed copy to the arbitrator/s.
  • It includes all legal reasons why it has been offered in the first place in its writing.

What Are the Two Types of Baseball Arbitration?

The following are the two main types of baseball arbitration:

Night Baseball Arbitration

This type of baseball arbitration process sees both parties offering their final (best) proposed awards to the arbitrator. In this engagement, the arbitrator is aware of the quality of the award, including the process involved in establishing.

In this case, the discretion is shared between the parties and the arbitrator. At most times, the arbitrator takes the final move in calculating the odds that make the award closest to one’s standard of reasonableness.

Day Baseball Arbitration

This process also sees both parties offering their awards to the arbitrator. The only difference, in this case, is that the award is kept from the arbitrator until the final hearing.

This engagement is favorable in a scenario wherein both parties are settled and trust each other’s decision-making capacities.

What Other Case Involves Baseball Arbitration?


Another significant case in baseball that justifies arbitration is free agency. Free agency is the platform or open market in baseball and many other sports. A player can bargain for a higher salary and access to contracts offered by any team.

As was the case before, players are perpetually tied to their last team without free agency even after exiting. The contracts determined during the 1879 reserve clause forever bind the player to his previous team or club.

As a result, the player will not raise his career value. Also, he will not be able to explore other teams and, in a way, fail in expanding his career.

But to keep the story short, let us say that baseball arbitration helped pave the way to the birth of free agency through historical events respectively in 1969 (Curt Flood claims) and 1975 (McNally and Messersmith claims) that challenged the clause to a settlement.

As per record, baseball arbitration played a major part in the establishment of the free agency, particularly because arbitration, unlike litigations, does not cost much.

Today, baseball arbitrations constantly play a significant role in enabling players to fully “swing the fence” towards a fairer fate, if not the best.


What is baseball arbitration? The article states that it is not much different from the usual arbitration, only involving monetary settlements in baseball disputes. Accordingly, the process consists of each party offering an award for the arbitrator to accept on the standards of reasonableness.

The two types of baseball arbitration include Day and Night Baseball arbitration. Meanwhile, another case besides salary dispute that requires baseball arbitration is the player’s pursuit of free agency.

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