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 Post subject: Can Someone Briefly Explain how Contracts Work?
PostPosted: Fri Apr 26, 2013 4:36 pm 
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Joined: Wed May 09, 2012 5:34 pm
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Location: Rochester, New York
I'm sure this topic has been brought up many times here in the past but I still fail to understand how baseball contracts work and a recent conversation on reddit has prompted me to ask.

It is my understanding that the team has control over a player until they hit FA and the point of buying out arbitration years is to have contracts set in stone (for financial planning, etc...) rather than leaving it up to arbiters. For example, Neil Walker is slated to hit FA in 2017 (according to BR) so do the Pirates have control over him until then at the mercy of arbiters or could Walker theoretically pass up arbitration and go to FA?

Thank you.


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 Post subject: Re: Can Someone Briefly Explain how Contracts Work?
PostPosted: Fri Apr 26, 2013 5:07 pm 
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Location: Glenshaw, PA
JollyRoger wrote:
I'm sure this topic has been brought up many times here in the past but I still fail to understand how baseball contracts work and a recent conversation on reddit has prompted me to ask.

It is my understanding that the team has control over a player until they hit FA and the point of buying out arbitration years is to have contracts set in stone (for financial planning, etc...) rather than leaving it up to arbiters. For example, Neil Walker is slated to hit FA in 2017 (according to BR) so do the Pirates have control over him until then at the mercy of arbiters or could Walker theoretically pass up arbitration and go to FA?

Thank you.


JR, you initial understanding is correct for the most part. teams usually buy out arbitration for certainty but also as a trade off for 1 or 2 years of free agency. The player gets guaranteed money without risk now for a few cheap years at the end. This is the basis for almost all extensions of star players like Cutch's.

Neil Walker is a Pirate as long as they want him through the end of 2016. On opening day he had 2 years and 166 days of service time. A player needs 6 years of service time to become a free agent. After 2016 he will have 6 years and 166 days. A key number here is 172 days, that is what counts as a year of service. That is why it is smart to keep a rookie down in the minors for at least a few weeks so that there 1st year won't count. That is what happened with Neil in 2010, almost by luck since we know they did not expect him to be good. So, in the FA eyes, Neil is a two year vet, not three, meaning we control him for this year and 3 more. There is nothing he can do to become a free agent sooner unless we decline to offer arbitration and release him. We could offer him an extension of maybe 5 years to try and entice him with guaranteed money now for a few free agent years at a lower price. That has been discussed.

The next issue is arbitration. Players qualify for salary arbitration after their 3rd big league season or if they are among the top 17% of players with two years + service time (Super Two). The cutoff is usually around 140 days. Neil got arbitration this year because he had 166 extra days of service plus 2 years. He will get arbitration salaries for this year (already) and the next 3 years. Players with 2 years plus 100 days didn't get arbitration and still make minimum money. This is why teams keep top prospects down until June, to avoid an extra arbitration year. Most players get 3 arbitration seasons, but super two players get 4. It has no effect on team control years, it just determines when a player starts making 7 figures instead of 500K.

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