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Monday, September 13, 2010

NHLPA/Don Fehr Update

On Saturday, the NHLPA executive committee voted to accept the recommendation of the executive director search committee, meaning that Don Fehr is one step closer to becoming the executive director of the NHLPA. The next step is to submit Fehr’s nomination to the entire bargaining unit for a vote. The NHLPA is expecting to have the final vote tally by the end of October.

While this certainly is an important step, and it is widely expected that Fehr will have the necessary vote total to assume the executive director position, the “nay” vote total will also be significant. As I discussed in my prior post, cohesion within the bargaining unit is critical to the effectiveness of Fehr and ultimately, the success of the NHLPA. I am hopeful that the players’ vote will result in a mandate for Fehr. With such a mandate, he will be far more effective in his efforts to rebuild the NHLPA.

Friday, September 10, 2010

The NHLPA – Headless Horsemen

Yesterday, James O’Brien of ProHockeyTalk reported that the NHLPA representatives must vote for or against Donald Fehr by September 11, 2010. I am shocked that the NHLPA player reps have taken this long to put it to vote, and I am even more shocked that Fehr’s approval is seemingly in question. According to Jim Kelly of, some of the NHLPA reps, including Robyn Regehr of the Calgary Flames, have concerns over the compensation package that Fehr has allegedly requested, and these concerns have delayed the voting process.

Larry Brooks of the New York Post first outlined Fehr’s requests in a September 2, 2010 article. Brooks reported that Fehr’s requests included the following:

· A salary of $3M per year to run through completion of collective bargaining after the current CBA expires following the 2011-2012 season.
· Salary of $1.5M for the remainder of 2010.
· Ability to retain his brother Steve Fehr as outside counsel for the NHLPA.
· Autonomy relating to all personnel decisions within the NHLPA

Given that Larry Brooks has his finger on the pulse of the NHLPA, and that there have been no denials of the content of the article from either Fehr or the NHLPA, I will assume that Brooks’ report is accurate. Fehr’s requests are more than fair, and I cannot fathom why any NHLPA rep would have qualms with any of them.

Fehr has been working as an unpaid advisor to the NHLPA since November of 2009, following the ouster of Paul Kelly as executive director in August of 2009. Kelly was forced out in an internal power struggle less than 2 years after assuming the position. Kelly had replaced Ted Saskin, who had been elected under a cloud of suspicion in 2005, and was ultimately fired after it was alleged that he improperly accessed the email accounts of players who had challenged his hiring. Saskin had taken the helm from Bob Goodenow in the wake of the disastrous CBA negotiations that resulted in the 2004-2005 lockout.

The NHLPA has been a rudderless ship since Bob Goodenow resigned in 2005, and in my opinion, the only person that can right the NHLPA is Don Fehr.

Fehr was the executive director of the Major League Baseball Players Association for 27 years before he stepped down in 2009. Fehr was instrumental in making the MLBPA the most powerful union in sports. He guided the players through the collusion grievances of the late 1980’s (which resulted in an award of $280M to players) and the 1994-1995 strike. He also guided the players through CBA negotiations in 2002 and 2006, the first negotiations since 1970 that were achieved without a work stoppage.

More importantly, however, he built a union that was in touch with its members. He brought cohesion to the membership, and this cohesion enabled the MLBPA’s to successfully navigate their labor negotiations with MLB. Without the support of its members (support which Fehr and his protégées fostered), the MLBPA would not have fared as well as it did.

Fehr left the MLBPA in more than capable hands. This exemplifies another one of his skills; the ability to find, train and keep talented staff members that share his vision. The new MLBPA executive director, Michael Weiner, has been with the MLBPA since 1988. Weiner is thought of as one of the brightest minds in the industry. Most of the other labor lawyers (and staff) at the MLBPA have been there for years, and are extremely talented, dedicated and loyal. This continuity has been critical to the success of the MLBPA.

The NHLPA has never had this kind of continuity. Its membership has never been as cohesive as the MLBPA’s, and its staff has never been as stable as the MLBPA’s. The current CBA, which is almost unconscionable from the players’ perspective, is a product of the NHLPA’s sustained instability, which has been exacerbated by the revolving door at the NHLPA’s offices.

It should be clear to the membership of the NHLPA that Fehr is not in this for the money. Fehr never took a salary of more than $1M during his tenure at the MLBPA, while other union leaders such as Billy Hunter (NBAPA) and Gene Upshaw (NFLPA), and even Ted Saskin, were making in excess of $2M. Fehr certainly earned a salary equal to or in excess of his peers, but he never took it. It should also be clear to the membership of the NHLPA that Fehr’s success was earned, not serendipitous, which means it can be recreated.

Personally, I do not think that Fehr’s request for $3M is representative of any financial desire or vanity. He has made his money. Rather, I think he believes that it is the only mechanism to ensure continuity at the NHLPA. With a higher salary (which is contractually guaranteed), the less likely he will be subject to the midnight coups that have felled some of his predecessors. With autonomy related to personnel decisions, he can select bright and dedicated staff members that share his vision and can continue the NHLPA’s mission well after he’s gone, much like he did at the MLBPA. With respect to his brother, Steve Fehr is an accomplished labor lawyer in his own right, and will be an asset as outside counsel. Continuity and cohesion will be imperative as the NHLPA prepares for the next round of CBA negotiations following the 2011-2012 season.

Don Fehr’s legacy is already cemented as a result of his leadership of the MLBPA. He has chosen to undertake an enormous (and perhaps thankless) task in attempting to resuscitate the NHLPA because he believes it’s the right thing to do for its membership, and because he believes (rightly) that he is the man for the job. Don Fehr does not need the executive director position at the NHLPA, the executive director position at the NHLPA needs Don Fehr. The membership should vote accordingly. The future of the NHLPA and its membership is at stake.

Thursday, May 27, 2010

Mike Piazza and Murray Chass' Recklessness

I am probably doing Mike Piazza a disservice by addressing Murray Chass’ recent blog post on Piazza’s alleged steroid use, as it continues the dialogue, but his post screams for a rejoinder. As most of you know, Murray Chass was a respected baseball writer for the New York Times for decades until he was unceremoniously “laid-off” in an apparent cost-cutting move. Following his dismissal, Chass started a blog that addresses various baseball and baseball-related issues. I had the greatest respect for Chass while he was at the New York Times. Our paths crossed a few times, mainly with respect to clients of mine who were accused of performance enhancing drug use (and some other baseball-related issues). I found his reporting to be fair, balanced and thoughtful. Chass’ writing for the Times (not his blog) eventually landed him in the writer’s wing of the Baseball Hall of Fame.

Regrettably, now free from the shackles of editorial contraints, Chass fills his blog with reckless vitriol. His most recent post on Piazza is a prime (if unfortuante) illustration of Chass’ willingness to throw journalistic principles to the wind. In the post, Chass takes Piazza to task for refusing to make himself available to the press on Piazza’s most recent visit to Citi Field. Chass writes that its “obvious that that Piazza’s rendered himself invisible so that none could ask him the steroids question”. Chass conveniently leaves out the fact that Piazza flatly denied steroid use in a 2009 interview with the New York Post’s Joel Sherman. Evidently, Chass left the notion of "fair and balanced" at the Times. Sherman asked the “steroids question”, and Piazza answered it. Piazza was under no obligation to answer the question in 2009 (but he did), and he’s certainly under no obligation in 2010 to answer a question he’s already answered. (And Chass fails to indicate how or why the question or answer would change in 2010.)

Prior to his most recent post, Chass penned a 2009 blog entry titled “Mike Piazza: His Bat and His Back” in which, on the basis of back acne alone, he accused Piazza of steroid use. To buttress his "acne-sation", he then claimed that Piazza's back acne "cleared up" when testing was introduced in 2004, confirming the inextricable connection between acne and steroids. Yep, you read it correctly: Chass’ reckless allegation concerning Piazza’s steroid use boils down to the appearance and disappearance of back acne. In defense of his “back acne” theory, Chass flippantly writes, a “district attorney could probably get a murder conviction on circumstantial evidence of similar strength”. I am grateful that I have never appeared in whatever courtroom Chass is describing. I am equally grateful that Chass is not my dermatologist.

I do not know if Mike Piazza used steroids (nor, quite frankly, do I care). Maybe he did, maybe he didn’t. What I do know is that on the basis of: (a) refusing to make one’s self available to the media as a retired player; and/or (b) back acne (or absence thereof), a reasonable person would not accuse someone of steroid use. Allegations such as these are irresponsible, indecent and lack journalistic integrity. History may bear out Chass’ iniquitous allegations, but that will not vindicate his gratuitous accusations of today. I expect more from a Hall of Fame writer.

Thursday, May 13, 2010

I'm featured in "The Sports Commentary" (Comment Communications) this week discussing crisis management with respect to professional athletes.

Wednesday, May 5, 2010

The Potential Impact of Arizona SB 1070 on Professional Baseball Players

The Support Our Law Enforcement and Safe Neighborhoods Act (Arizona SB 1070) was signed into law in Arizona by governor Jan Brewer on April 23, 2010. SB 1070 makes it a misdemeanor crime for an alien (note – not “illegal alien”) to be in the state of Arizona without possession of proper immigration documents.

The most frightening aspect of this law is that it obligates law enforcement officials to make an attempt to determine a person’s immigration status if there is a reasonable suspicion that the person is an illegal alien during a police stop for any other offense or suspected offense. Law enforcement may arrest a person if there is probable cause that the person is an unlawful alien. A legal alien, who doesn’t have a passport and visa in his possession during a law enforcement encounter can be arrested. The “I’m sorry, but I left my passport and visa at home” defense will not prevent one from being detained.

This law, which is scheduled to go into effect on July 28, 2010, can, and most likely will, have a disproportionate impact on Latin baseball players. The Arizona Rookie League will begin in a matter of months. Approximately 150 Latin players will arrive in the greater Phoenix area to participate in the league. These Latin players are young, usually teenagers, with limited command of the English language. Under SB 1070’s nebulous “reasonable suspicion” standard, these young Latin players are prime targets for this “legalized racial profiling”. Under almost any interpretation of SB 1070’s reasonable suspicion standard, these players can be asked to produce their passports and visas if there is a suspicion regarding his immigration status because of their skin color and/or English language command. If they don’t have their passports, even though here legally, they can be incarcerated.

SB 1070 doesn’t only affect legal aliens, it can affect U.S. citizens. Under SB 1070, if an American born Caucasian player, who speaks perfect English, is asked to produce his driver’s license or other identification, and he does not have it, is he incarcerated? The answer is no. If an American born player of Hispanic decent, who speaks perfect English, is asked to produce the same identification, and does not have it, is he incarcerated? The answer is he could be under SB 1070’s reasonable suspicion standard. This is a clear equal protection violation.

I am of the opinion that SB 1070 will not withstand constitutional challenge. There have already been two lawsuits filed seeking to have the bill declared unconstitutional. In the unlikely event that legal intervention is unsuccessful, a referendum to overturn the law (in a state where the population is 30% Hispanic) is expected to be on the ballot no later than 2012. President Obama and Attorney General Eric Holder have both denounced the bill and questioned its constitutionality. Given that the federal government has the primary responsibility to deal with immigration matters, federal intervention is likely.

The Major League Baseball Players Association and the National Basketball Association Players Association have voiced their opposition to SB 1070, and should be lauded for wading into the political arena on such an important issue. The Phoenix Suns are wearing “Los Suns” jerseys in their playoff game against the San Antonio Spurs tonight in protest of the law. Both the Phoenix Suns and Arizona Diamondbacks, as organizations, have issued statements in opposition to SB 1070. It will be interesting to see what position Major League Baseball takes, if any, as they have not commented publically on the issue as of this date. MLB’s position will be of some import, as many opponents of the law have called upon MLB to move the 2011 All-Star game, currently scheduled for Phoenix. As an aside, the National Football League pulled the 1993 Super Bowl from Phoenix as a result of Arizona’s failure to recognize Martin Luther King Day as an official state holiday. Tempe was selected as the host of the 1996 Super Bowl, only after Arizona finally recognized MLK Day as an official state holiday.

As Billy Hunter, the NBAPA executive director said:

“Any attempt to encourage, tolerate or legalize racial profiling is offensive and incompatible with basic notions of fairness and equal protection. A law that unfairly targets one group is ultimately a threat to all.”

Thursday, April 22, 2010

Goodell's Folly

Yesterday, NFL Commissioner Roger Goodell announced that he had suspended Pittsburgh Steelers’ quarterback Ben Roethlisberger for 6 games for violations of the NFL Personal Conduct Policy. The suspension can be reduced to 4 games (at Mr. Goodell’s discretion) if Roethisberger successfully completes behavioral counseling. It’s an almost certainty that Roethlisberger will complete his counseling, and thus, in my opinion, this is really a 4 game suspension. However, even at 4 games, the length of the suspension is unjust, and an abuse of Mr. Goodell’s discretion.

Goodell has suspended a number of NFL players for violation of the Personal Conduct Policy, however, the vast majority of these players were either found guilty or pled guilty to a criminal offense. My research indicates that no players were suspended for 4 games or more without an underlying criminal conviction. There are also a significant number of players that have been convicted of crimes (even felonies – see Michael Vick - 2 games) who received less than 4 game suspensions. So why does Roethlisberger get 4 games?

The analysis begins with Goodell’s unbridled discretion under the Personal Conduct Policy. All punishment meted out by Goodell is at Goodell’s sole discretion. Any appeals are heard by, yes, you guessed it, Roger Goodell. There is no meaningful standard by which to determine the severity of discipline under the Policy. Paula Duffy of the Huffington Post captured the essence of Goodell’s discretion quite succinctly in quoting former Supreme Court Justice Potter Stewart. Justice Stewart, in struggling to define “hard core pornography” wrote:

“I shall not today attempt further to define the kinds of material I understand to be embraced with that shorthand description [“hard core pornography”]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture in this case is not that.”

Contrast the “I know it when I see it” standard with Major League Baseball’s policy, which requires “just cause” to impose discipline. Even worse, there are no meaningful appellate rights under the NFL Policy. In MLB, a player can appeal any discipline to an independent arbitrator. In the NFL, you appeal to the person who made the decision in the first place. So much for checks and balances! This is a bargaining failure by the NFLPA that must be corrected in the next round of CBA negotiations.

Let’s be clear: Ben Roethlisberger engaged in abhorrent behavior on March 5, 2010. Whatever the real story is, Roethlisberger placed himself in a situation that endangered himself, his career, and most importantly, the young women. Additionally, the situation in Georgia is eerily similar to the allegations made against him in a civil suit filed in Nevada. At the minimum, Roethlisberger has exhibited extremely poor judgment. At the most, he has engaged in aberrant sexual behavior. Regardless of where the truth lies, Roethlisberger has not been charged with a crime in either situation. Both women reported their respective matters to the authorities. The authorities, who actually have something more than an “I know it when I see it” standard, determined that no criminal conduct occurred.

While every professional sports league should have some discretion to impose discipline when a player engages in serious misconduct, there must be some meaningful standard by which to determine such discipline. Under any meaningful standard, and using prior suspensions imposed by Goodell (also rendered under the “I know it when I see it” standard), Roethlisberger should not have been suspended for 4 games. Not to be repetitive, but emphasis is necessary: there have been no criminal charges filed against him, much less any convictions. There hasn’t even been sworn testimony produced regarding these incidents. Roethlisberger’s penalty is the result of a statement to police given by an admittedly highly intoxicated individual, and a civil complaint (by a woman seeking significant monetary damages). This is not evidence that leads a reasonable person to a certain conclusion of wrongdoing that would rise to the level of a 4 game suspension.

Roethlisberger’s suspension is clearly the result of Goodell’s public relations antennae twitching uncontrollably. Goodell is concerned that any suspension of less than 4 games would result in serious public backlash (his PR concern is highlighted by the fact that it was announced as a 6 game suspension, when in reality, it is a 4 game suspension). However, while the NFL certainly has the right to be concerned with respect to public relations issues, a player’s rights, and the integrity of the disciplinary system (as flawed as it is) cannot be thrown to the wind for public relations reasons. Players have rights, even when they engage in misconduct. Roger Goodell has an obligation to respect those rights. In this case, he didn’t.

Given his position in the Roethlisberger matter, I wonder what type of suspension Mr. Goodell would have imposed upon Tiger Woods were he an NFL player?

Thursday, April 15, 2010

Suffolk Law School/Harvard Law School MLB Salary Arbitration Panel Discussion

I want to thank the students and faculty of Suffolk Law School and Harvard Law School for hosting the Major League Baseball Salary Arbitration panel discussion on April 2, 2010. I was joined on the panel by MLB Arbitrator (and Professor) Roger Abrams and New York Mets' Deputy General Counsel Neal Kaplan. Outstanding participation and questions from the students, and spirited discussion amongst the panel. Thanks again for having me!

Friday, February 19, 2010

Tiger Woods - Statement

I am not a journalist or technically in the public relations field, but I have represented a significant number of high-profile professional athletes who have been the subject of intense media scrutiny, so I think I have somewhat of an educated opinion on what transpired with respect to Tiger Wood’s recent statement.

America has a fascination with tearing down its heroes, whether they are athletes, politicians, or other high-profile individuals. America also has a penchant for forgiveness. America puts high-profile athletes (and other high-profile individuals) on a pedestal (we wear their jerseys, buy their products, and flock to the fields and arenas in which they perform, and embrace and root for them to succeed). However, Americans are fallible, and we want, deep down, to know that our heroes are fallible also – it “humanizes” the hero in the mind of the public. All of a sudden, we can say “hey, I made that mistake too” or “hey, that could have happened to me”. An athletes’ failure (in the main) can strengthen his/her bond with the public because he/she becomes more “like us”.

Some in the media have asked me whether Tiger took the correct path in handling this matter with respect to public relations given that I had represented Sammy Sosa, Andy Pettitte, and A-Rod (and others) in somewhat similar circumstances. To be candid, I would have provided different advice, and employed a different strategy, but that is not to say Tiger (and/or his advisors) chose the wrong path. At the end of the day, Tiger only had to apologize to his wife, his family, and his friends, which he did. He does not need to apologize to the American public or his sponsors. With his statement (and I’m sure well before then), he apologized to the only people he needed to apologize to. This was a personal failure, not a professional failure.

Tiger made a number of personal, not professional, mistakes. These mistakes will cost him some sponsorship dollars and a few (and I mean a few) fans. America didn’t embrace Tiger because he was “squeaky clean”, they love him because he was (and is) the best (and more importantly, the most exciting) golfer of this generation. He singularly energizes a sport and has become one of the most recognizable personalities in the world because of his “on-course” performance, not his “off-course” behavior or personality.

As far as his sponsors are concerned – Tiger has made them their money – his sponsors have a choice now: cut and run, or maintain their relationship with the best golfer of this generation. Tiger’s sponsors were not robbed or cheated by these recent developments. They got what they paid for – the best golfer in the world. If they determine going forward that Tiger will not have the public appeal (and resulting marketability), then they will move on, as is their right. But watch, and wait, because most of his sponsors won’t cut and run, because performance sells. Performance, not personality (or personal life) drives his popularity and resulting marketability.

I wish Tiger Woods and his family the best and I look forward to his return to competition, because I, like the rest of America, love a hero. Maybe more so now that I know that he is fallible.

Tuesday, February 9, 2010

Debunking Salary Arbitration Myths - Part 2

Salary Arbitration: Battle of the Midpoint. Maury Brown’s article in a special to Yahoo Sports can be viewed here:;_ylt=AqF3fSxVuGp1cB9h5WbNqv0RvLYF?slug=ys-arbitrationmidpoint012510&prov=yhoo&type=lgns

Mr. Brown writes:

“It’s this midpoint figure where a dollar one side or the other offers a moral victory. A dollar below, the club wins. A dollar above, the player gets braggin rights.”

While Mr. Brown’s article is excellently written, his ultimate conclusion, on a practical level, does not accurately reflect the basic notions of salary arbitration and midpoints. Salary arbitration is meant to determine a players’ actual value within the “salary arbitration system”, not his value with respect to the “midpoint”. The only time a midpoint has tangible effect is in the case of an actual hearing. While some agents brag about “above midpoint settlements” and certain teams take a hard line of “never settle above the midpoint” – this is mere puffery. Settlements rule the day, and most often, settlements reflect a players’ actual value within the system, irrespective of the midpoint.

The midpoint, is, as some have often described it, an ultimately arbitrary number. Players/agents and teams “guess” at what the other will file in an effort to create an equitable midpoint. However, the midpoint between a club’s submission and a player’s submission is not arrived at out of the ether. Clubs and agents make “educated guesses”, based upon a great deal of experience and negotiation, on what the opposition is going to submit as a filing number. On the basis on this “educated guess” numbers are submitted. The idea is to create a midpoint “in or around” the player’s value within the salary arbitration system.

For example, if a player (and his representative) believe that he is worth $3.1m in the current salary arbitration market, the player will seek to set up a midpoint at or around $3.1m. Let’s use Andre Ethier from last year as an example. Ethier filed at $3.75m while the Dodgers filed at $2.65m, resulting in a midpoint of $3.2m. Ethier’s representatives were aware of the filing numbers of Ethier’s main comparables, including Corey Hart, whom they also represented. Hart filed at $3.8m, while the Brewers countered at $2.7m, resulting in a midpoint of $3.25m. Also in the mix (among others) was Conor Jackson, who had settled at $3.05m. Ethier was statistically superior to Jackson, but the question was how much better?

Hart ultimately settled at the midpoint of $3.25m, while Ethier settled at $3.1, $100k below his midpoint of $3.2m, but $50k ahead of Conor Jackson’s $3.05m. Did Ethier “lose” because he didn’t settle at the midpoint? The simple answer is no. Ethier was behind Hart and ahead of Jackson on a statistical analysis, and he was more than $50k behind Hart (again, on a “drilled down” statistical analysis). So once Hart settled at $3.25m and Jackson at $3.05m, Ethier was placed in the position of having to settle below his $3.2m midpoint because, again on a statistical analysis, he was more than $50k behind Hart, but still slightly ahead of Jackson at $3.05m.

Good agents will often, in the case of a team that is not “file and trial” (I will address the “file and trial” strategy in another post), file somewhat high in an effort to push the midpoint up. Clubs, on the other hand, when faced with the same situation, will file somewhat lower, in an effort to push the midpoint down. However, the player’s actual value within the system is ultimately the most important number.

This is not to say that in certain situations, numbers are filed that create a significant leverage to either a player or a club. Take for example Neifi Perez in 2001. Perez filed at $3.95m, and the Rockies filed at $3.1m, resulting in a midpoint of $3.525m. In that same class/year, Deivi Cruz settled for $3.525, the midpoint in Perez. Perez was statistically superior to Cruz, and was thus able to obtain an above midpoint settlement of $3.55. The reason was simple – Perez had a better chance of prevailing at hearing given the Cruz settlement, so the Rockies, in an effort to avoid being an underdog at hearing, acquiesced, and paid Perez over the midpoint. Regardless of whether the settlement was “over the midpoint”, it was a factual matter that Perez was superior to Cruz, and thus should have been compensated higher. Teams have also employed this strategy to get players, like Ethier, to settle below the midpoint.

The goal in salary arbitration submissions to arrive at a player’s true value within the system. Sometimes, by virtue of overly aggressive filings on either the clubs’ or the players’ behalf, the midpoint becomes important with respect to a hearing. A bad midpoint, for either the club or the player can lead to a loss at hearing or an inequitable settlement. However, the majority of cases are settled pre-hearing, and the majority of those settlements, whether at, below, or above the midpoint accurately define the individual player’s value irrespective of the midpoint.

In the main, if a player settles below the midpoint, it is not a “loss”, as he usually receives what his true value within the system is. Likewise, if a player settles above the midpoint, it does not follow that it is a “win”. More likely, the above midpoint settlement is reflective of his value within the system. As stated, there are aberrations, and the “file and trial” aspect does not fit within the above-described model.

In conclusion, the midpoint is an arbitrary, yet in the main, intellectually arrived at number that has bearing on a players’ actual value within the salary arbitration system. The midpoint is one way of making that determination in that it is a “bargained for” number, but it is not usually the ultimate determining factor in a player’s salary. If a player settles below the midpoint, but is still compensated at a level that accurately reflects his value within the system – he has not lost.

Wednesday, February 3, 2010

Sports Law Blog

Many thanks to Professor Michael McCann, who is also the sports law columnist for Sports Illustrated, for featuring this blog on The Sports Law Blog is the product of some of the best sports lawyers in the country.

Tuesday, February 2, 2010

Debunking Salary Arbitration Myths - Part 1

Regarding the upcoming salary arbitration hearing between starting pitcher Wandy Rodriguez and the Houston Astros, Greg Lucas of FSN-Houston wrote:

Rodriguez doesn't lose no matter what the decision is. He made about $2.6 million in 2010. No wonder an awful lot of baseball owners rue the day they agreed to arbitration to settle contract disputes. The players always win. The owners offer raises-in Wandy's case almost doubling his salary--but may have to pay even more if the arbitrator rules such.The scoreboard may show the owners "winning" a decent percentage of the actual arbitrator's decisions, but they still pay out more money than they had the year before.

Maury Brown of the Business of Sports Network and contributor to Yahoo!Sports writes:

Last year, Red Sox closer Jonathan Papelbon(notes) reached a $6.2 million settlement deal ahead of exchanging figures. The deal was the largest ever offered to a first-time salary arbitration eligible closer, and the third highest in history behind Howard’s $10 million arbitration award in 2008 and the $7.4 million awarded to Miguel Cabrera(notes) after he won his case in 2007. To place that in perspective, it was a 700 percent raise from the $775,000 Papelbon made in ’08. As for Howard’s award in 2008, his increase from the $900,000 he made in 2007 was 1,011 percent. As one executive replied when asked about salary arbitration: “Honestly? What’s to like about it?”

Mr. Lucas, Mr. Brown, and many others in the media, seem to miss the point of salary arbitration (SA), and more importantly, players’ rights (as well as clubs’ rights) under the Basic Agreement. A player with 3 or more years but less than 6 years of Major League Service (MLS) is eligible for salary arbitration (SAE) pursuant to the Basic Agreement. In certain circumstances, a player with 2+ years of MLS may also be eligible for salary arbitration as a “Super 2”. There is also a provision which allows certain free-agents to submit to the salary arbitration process, but that provision is not relevant to this entry. The Basic Agreement can be viewed here:

Salary arbitration is a collectively bargained for process. Owners and players originally agreed to the salary arbitration process in 1974, and little has changed in the process since. While Messrs. Lucas and Brown (and others) focus on the “raises” that salary arbitration eligible players receive, they miss the significant benefits that the salary arbitration system bestows upon clubs.

How does a club benefit in the salary arbitration system? The answer is simple. A club that has a SAE player controls that player throughout that player’s SA eligibility (at least 3 years, and in the case of Super 2s, 4 years), in addition to the 3 years of service prior to salary arbitration eligibility, for a total of 6 years. The club can choose whether to tender that player a contract, thus making him salary arbitration eligible. If that player’s expected salary in the salary arbitration system exceeds what the club believes his value to be, the club can simply non-tender the player, thus making him a free-agent.

A recent example of this is the Pittsburgh Pirates’ decision to non-tender Matt Capps, the Pirates’ closer for the past 3 years.

The Pirates made the decision that they could find a comparable player to Capps in the free-agent market at a lower price than Capps’ salary arbitration value. Capps was due a raise from his $2.35 million salary, and the Pirates ultimately determined that such a cost outweighed Capps' value.

The Pirates eventually signed Octavio Dotel for $3.5m to be their closer. The Pirates thought that Capps was not worth his “arbitration value", and non-tendered Capps. That decision was club’s, and not the player’s. It certainly remains to be seen whether the Pirates’ “valuation” of Capps was correct. Given that he signed with the Nationals for $3.5m with performance bonuses in the free-agent market, one could conclude that the Pirates incorrectly gauged the “market” value for Capps.

Even more beneficial to the clubs is the fact that salary arbitration contracts are usually non-guaranteed. The guarantee is matter of negotiation, but the majority of salary arbitration contracts are non-guaranteed. Thus, if a player fails to perform in spring training (or engages in some prohibited activity which results in injury), the club has the right to terminate the contract and pay 1/6 of the value of the contract to the player.

In my opinion, the salary arbitration system protects clubs to a greater extent than players, given that the decision to tender a player a salary arbitration contract is always in the clubs’ hands. To debunk Mr. Lucas’ notion that players cannot “lose” in the salary arbitration system, let’s take a look at what Wandy Rodriguez, a 2nd time salary arbitration eligible starting pitcher, could have received if he was a 2010 free-agent, and not a 2010 salary arbitration eligible player. In this analysis, I’ll use John Lackey, who was 2010 free-agent. Below is a comparison between John Lackey’s and Wandy Rodriguez’s 2009 statistics. Clearly, Rodriguez is statistically a better pitcher in 2009, yet because Rodriguez is salary arbitration eligible, and not a free-agent, he will get paid either his submission of $7.0m, or the club’s submission of $5.0m. In the meantime, Lackey, as a free agent, was able to obtain a 5 year $83.0m contract, with an average annual value of $16.5m.

Platform Year Comparison
Rodriguez, 2009 Astros 1.000 14 12 .538 3.02 33 33 23 205.7

John 2009 Angels 1.000 11 8 .579 3.83 27 27 16 176.3

Why is Lackey able to earn $16.5 per year over 5 years, and Rodriguez is only able to earn either $5.0m or $7.0m? It’s simple – Lackey is a free-agent and able to freely negotiate with other clubs, whereas because the Astros control Rodriguez this year (and the next 2 years, as Rodriguez is a Super 2) in the salary arbitration system. Therefore, the Astros are paying much less for Rodriguez in the salary arbitration system than they would if he were a free-agent. If Rodriguez was a free-agent, he might well get a contract in excess of Lackey on the basis of a pure statistical analysis.

And just in case you thought that Rodriguez was a “1-hit” wonder with respect to Lackey, here are their 2 year numbers:

Two Year Comparison

Rodriguez, 2008 Astros 1.000 9 7 ..563 3.54 25 25 10 137.3
Rodriguez, 2009 Astros 1.000 14 12 .538 3.02 33 33 23 205.7
TWO YR TOTAL 2.000 23 19 .548 3.23 58 58 33 343

John 2008 Angels 1.000 12 5 .706 3.75 24 24 16 163.3

John 2009 Angels 1.000 11 8 .579 3.83 27 27 16 176.3
TWO YR TOTAL 2.000 23 13 .639 3.79 51 51 32 339.7

The salary arbitration system does benefit players in that they are able to compare themselves to other players in the salary arbitration system and receive higher salaries than they were receiving prior to salary arbitration eligibility. They are no longer subject to the bargained for contract renewal provision of the Basic Agreement, which is at the clubs’ discretion. Keep in mind that prior to salary arbitration eligibility, clubs are able to renew players at the minimum salary ($400,000) or above (at their sole discretion), no matter the quality of performance. For example, Tim Lincecum was paid $650,000 in 2009, despite being the 2008 Cy Young Award winner on the basis of these statistics:

Career Totals

Lincecum,, 2007 Giants 0.148 7 5 .583 4.00 24 24 16 146.3
Lincecum, 2008 Giants 1.000 18 5 .783 2.62 34 33 26 227.0
CAREER TOTALS 1.148 25 10 .714 3.16 58 57 42 373.3

In 2010, Lincecum is salary arbitration eligible. He has submitted a demand of $13.0m, and the San Francisco Giants have submitted $8.0m, with a midpoint of $10.5m. Let’s take a look at Lincecum compared to C.C. Sabathia, who last year signed a 7 year $162.0m contract (with an AAV of $23.0) as a free-agent:

Platform Year Comparison

Sabathia, 2008 Indians 6 8 .429 3.83 18 18 10 122.3
Sabathia, 2008 Brewers 11 2 .846 1.65 17 17 23 130.7
Sabathia, 2008 1.000 17 10 .630 2.70 35 35 25 253.0



Tim 2009 Giants 1.000 15 7 .682 2.48 32 32 26 225.3

It is arguable that Lincecum is statistically superior to Sabathia. Regardless, Lincecum will earn somewhere between $8.0m and $13.0m in 2010, while Sabathia will earn $23.0m. Why? Because again, Sabathia was a free-agent, while Lincecum is salary arbitration eligible. The San Francisco Giants are the beneficiaries of the salary arbitration system in this analysis. If Lincecum was free-agent eligible, he most likely would command a salary of $23.0m (Sabathia) or above. In addition, the Giants are protected throughout Lincecum’s salary arbitration years in that if he fails to perform or is injured, it will be reflected in his future salaries. In contrast, if Sabathia fails to perform to expected standards or is injured, by virtue of his guaranteed contract, he will continue to earn $23.0m every year for the length of his contract (unless, of course, he violates certain terms of his contract). As it stands, Lincecum has to go year by year for the next 4 years (Lincecum, as a Super 2, will have 4 years of salary arbitration eligibility).

As stated, players benefit from salary arbitration, but clubs certainly benefit in that they have choices with respect to a salary arbitration eligible player: they can choose, at their sole discretion, whether to tender a player a contract, or not to tender him a contract. In addition, clubs are protected. A player’s salary arbitration salary will fit within the confines of similarly situated players that have gone through the system or are currently going through the system. In the salary arbitration context, clubs do not have to concern themselves of free market forces that could push the player’s salary higher. The salary arbitration system protects both players and clubs.

In response to Mr. Lucas, certainly Wandy Rodriguez can lose. If he were a free-agent coming off of his 2009 season, he’d make far in excess of either $5.0m or $7.0m, and most likely have the security of a guaranteed multi-year contract. Should Rodriguez fail to perform this year, or is injured, it will be reflected in his 2011 salary (should the Astros again tender him a contract, at their discretion). Rodriguez has no security in a 1 year salary arbitration contract. I’m sure that if Rodriguez had his druthers, he’d choose to be a free-agent as opposed to salary arbitration eligible.

In response to Mr. Brown, who seems to embrace the thoughts of the unnamed executive who proclaimed “Honestly? What’s to like about it?” What’s to like about it from the club perspective is that salary arbitration is a 3 year (or 4 year in the case of Super 2) club option, wherein the club decides at its sole discretion whether a player is worth his value within the salary arbitration system. If the club does not believe that he is, it can non-tender the player. In addition, with the exception of 3rd/4th time salary arbitration eligible players (who, by virtue of the criteria set forth in the Basic Agreement can compare themselves to free-agents), clubs can take comfort in the fact that players are limited by the salaries of similarly situated players within the system. Players within the salary arbitration system cannot negotiate with other teams, thus reducing leverage that would otherwise be present in a free-agent context.

The end result is that salary arbitration benefits both players and clubs. There are no “winners” and there are no “losers”. It is a contractually bargained for process by which the club maintains control over the player throughout his eligibility while in turn, the player can finally contractually compare himself to similarly situated players and is freed of the clubs' discretionary renewal power.

Sunday, January 31, 2010


I saw Avatar last night. It was better 20 years ago when it was called Dances with Wolves. I cannot fathom that I actually believe Kevin Costner is a better actor than anyone in Avatar. I would think that James Cameron could have produced a better story line (he simply copied any story about the Trail of Tears (Cherokee Indians)) and pasted it into the future. What a waste of great special effects. I want the 3 hours of my life back (along with the amount of my tickets).

Friday, January 29, 2010

Adrian Mutu

Romanian striker Adrian Mutu, currently playing for Fiorentina of Serie A, has allegedly failed yet another drug test, seriously jeopardizing a promising, yet troubled, career.

You may recall that in October of 2004, Mutu, while playing for Chelsea (which had paid a £15.8 million transfer fee for Mutu), tested positive for cocaine. Chelsea subsequently terminated Mutu’s contract. In addition, FIFA handed down a 7 month suspension, which prevented Mutu from performing for any other club. Following his suspension, Mutu signed with Juventus FC. After a year with Juventus, Mutu was sold to his current club, Fiorentina.

Chelsea subsequently sought compensation from Mutu related to the £15.8 million transfer fee and other damages. The Court of Arbitration for Sport (CAS) found in favor of Chelslea, and ordered Mutu to pay Chelsea £17 million in damages.

There are intriguing legal issues with respect to the CAS award. Specifically, Chelsea sought, and was awarded damages based upon a contract between Chelsea and Parma, Mutu’s former club. Parma was the beneficiary of the £15.8 million transfer fee, not Mutu. Mutu was not party to the contract between Chelsea and Parma, yet the CAS held that Mutu, as a result of his testing positive for cocaine, was liable for the amount of the transfer fee (and other related damages).

In my opinion, the CAS decision is flawed. Michael Stival, a 2L at Rutgers School of Law, and I will be exploring the Mutu decision in an upcoming article. There are sure to be additional issues related to Mutu’s most recent positive drug test, which will also be explored in the article.

Thursday, January 28, 2010

First Post

I highly doubt that anyone cares what I have to say. That being said, I am hoping that at least one person (even if its only me) finds my missives of some value.