Two opposite views on salary arbitration-22 years apart:
Philip K. Wrigley, owner of the Cubs, Oct. 17, 1951, testifying before a congressional committee on the “Study Monopoly Power:”
“As far as arbitration goes, I think if you had a means of arbitrating (player) salaries you might as well set up a commission to set all salaries, because I think they would all be arbitrated and that probably would be a good thing for baseball.”
Charles O. Finley, owner of the Oakland Athletics, 1973:
“I contacted every owner either personally or by telephone and I told them, one and all, the evils of arbitration. They all listened very attentively and thanked me for taking the time to call them. If I had been a betting man I would have bet all the tea in China that at least 18 of the teams would have voted against arbitration. But when it came to a vote, only the St. Louis Cardinals and Oakland A’s voted against it. They didn’t like me. At that time, my club was doing too much winning.”
Wrigley and Finley were among baseball’s significant visionaries. Two very different men: Wrigley, the multimillionaire altruist, heir to fortune; Finley, born into modest circumstances, aggressive, a street-smart realist.
Salary arbitration went into effect in 1974. Any player with three or more years of major-league experience dissatisfied with the club’s salary offer could file for arbitration. Then, as now, the player and management submitted a sealed bid-salary requested and salary offered. A settlement is allowed before the hearing, but once the grievance is before the arbitrator, there can be no compromise. The arbitrator must choose one number or the other.
In the beginning the awards were modest. The first grievance was pitcher Dick Woodson versus the Minnesota Twins. Woodson requested $29,000; the Twins offered $23,000. Woodson won. The next day outfielder Larry Hisle, also of Minnesota, won an identical increase of $6,000.
Of the 497 players eligible, 53 appealed for arbitration but only 29 went the route. The owners “won” 16-13 but the final score was meaningless. To hold their losses to a minimum, they had to increase their offers across the board. The 13 arbitration winners received a total of $135,000 in excess of the club offers.
John Gaherin, the owners’ labor negotiator, insisted this was further evidence the owners had been fair in their dealing with the players.
“The owners have been pilloried in the press as people who take advantage of the players,” Gaherin said. “But the results of the arbitrations show this isn’t true.”
The Sporting News, in those days generally partial to management, hailed the procedure as a success and, in an editorial, decided, “All in all, arbitration seemed palatable to both sides.”
For management, these were the good old days. In 1979, the owners held their “losses” to only $138,000. But because salaries always go up, not down, coupled with the explosive effect of free agency, the players’ gains have soared with each passing season.
In 1989, for example, the 135 players who filed won an average salary increase of 71 percent. The next year it was 101 percent, the year after that 104 percent. Last year it was 110 percent and resulted in an average player salary of $1.2 million.
The first million-dollar award was won in 1983 by pitcher Fernando Valenzuela, then of the Los Angeles Dodgers. Four years later, Don Mattingly of the Yankees was the new leader at $1.975 million. In 1991, pitcher Doug Drabek, then with Pittsburgh, was the first to reach the $3 million arbitration plateau: $3.5 million, a one-season salary gain of $2.25 million.
Of the 80 players who filed for the current arbitration round, 59 are asking for at least $1 million, and 14 for $4 million or more. White Sox pitcher Jack McDowell, winner of the 1993 American League Cy Young award, has requested a record $6.5 million. The new arbitration season begins Feb. 1.
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McDowell’s 1991 wage was only $175,000, definitely low for a player of his ability. He was eligible for arbitration for the first time in ’92 and requested $2.3 million against the Sox’s offer of $1.6 million. McDowell lost; nonetheless, his new $1.6 million take represented a 814 percent increase, the highest single-season gain in recorded diamond history.
Last year he filed again and this time won his bid for $4 million, a 150 percent increase over 1992. The increase over his 1991 salary was 2,186 percent. If he wins again, his three-year gain would be 3,614 percent. If he loses and he must accept the White Sox’s offer of $5.3 million, the cumulative gain would be 2,929 percent.
That is why the players love salary arbitration and why the owners want a team salary cap. Look for bloodshed on the baseball horizon-in the 100th anniversary year of Philip K. Wrigley’s birth.