Thursday, February 16, 2012

It's Arbitration Time!

Since it's that time of the year again with MLB teams taking MLB players to arbitration to decide salary, I thought it'd be appropriate to post this.  Last year, I had the privilege of attending a talk given by General Counsel of the Pittsburgh Pirates, Larry Silverman. During that talk, he gave an in-depth and behind the scenes explanation/view of the arbitration process.  I wrote a post on BucsDugout (here) about it last year, but I'll also copy and paste it here after the jump.

"Today, Larry Silverman visited the WVU College of Law, which I attend, and gave a presentation on the baseball arbitration process, specifically using Ross Ohlendorf's arbitration case as an example.  Below are a few notes on what I learned.
  • In arbitration, a common misconception is that statistics are the major deciding factor between which number the arbitration panel picks.  That, according to Mr. Silverman, is incorrect.  The major factor used to determine a player's salary is comparable players.  While obviously statistics determine which players are comparable, it is largely dependent upon historical precedent, similar to the everyday legal system.  Statistics are only used to determine comparable players, not in a vacuum to determine a number.
  • The Pirates cited five comparable players for Ohlendorf: Anibal Sanchez, Kyle Davies, Josh Johnson, Francisco Liriano, and Edison Volquez. 
  • In citing those players the Pirates focused the most on comparing one major statistic, IP/G.  Wins were not a large issue, because, according to Mr. Silverman, even arbitration panels have begun to recognize the problems with the win statistic.
  • On his side, Ohlendorf largely argued that (and I didn't know this until he pointed it out, had anyone done research on this?) he had gotten the lowest run support/9 innings for the innings Ross Ohlendorf was in the game (since those stats have been complied) in '10.
  • According to Mr. Silverman, he believes the panel picked Ohlendorf's number (the panels never give their reasoning for their decision) based upon the comparison to Edison Volquez.  Interestingly, he believes it was because of Volquez's drug suspension, calling into question his character, which was contrasted to Ohlendorf's character highlighted by him interning at the White House.  Essentially, he said the decision may (I emphasize may, because no one knows; this is only Mr. Silverman's theory) have had more to do with the person Ross Ohlendorf and less about the player Ross Ohlendorf.
  • Mr. Silverman believes (and he is an avid baseball fan and understands advanced sabermetrics, etc.) that despite the lack of advanced baseball knowledge a arbitrator typically possesses, that a professional arbitrator (panel members are generally commercial labor judges, since technically this is a labor issue tied to the CBA) would be better than a more knowledgeable baseball person with a lack of legal training.  In addition, as part of my inference, it seemed it was legally necessarily this way because of the issues I outlined above.  He likened it to a judge taking a case on intellectual property who did not know the difference between a copyright and a trademark, which does happen.  The difference is that in that case, expert testimony is allowed, and arbitration this does not exist, a legitimate flaw.  He went on to say that obviously the best-case scenario would be a legal expert who also was well-versed in baseball, especially sabremetrics.
Additional notes not concerning arbitration:
  • Mr. Silverman was asked about the general direction of the team (he is a legitimate Pirates fan and not just an employee - born and raised in Pittsburgh, etc.).  He said that he's frustrated as any fan but that he legitimately believes the talent is in the major leagues and minor leagues (he mentioned the lack of pitching depth on the major league squad that hopefully will be fixed by way of the depth of the pitching in the minor leagues) is there for the Pirates to contend.  However, he did express concerns that the positional talent would be gone before the pitching talent could be assembled.
  • Finally, maybe offering hope to his concern (and all of ours) he said (and I can't get into specifics due to confidentiality) that the Pirates are actively trying to sign players through their free agency years as a general plan.  He did mention the realistic goal was only a one to two years of free agency, hopefully in the form of club options, so that may dampen any hopes of signing Andrew McCutchen for the next 10 years, but it is good news nonetheless.
Edited : I Fixed the part about Ross Ohlendorf's run support to reflect the correct statistic (I believe)"


  1. that was one seriously informative article. i missed it the first time on BD. i could not comment on it there. it did let me rec'ed it. that has to be one of the highest rec'ed of all time. charlie should have snapped you up.

    1. Haha, Thanks KoW. I think Charlie is doing just fine though. His blog/site is still the best.

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