Arbitration Figures

Jeff's note: We did it again. I have a 2010/2011 payroll post below this one. Scroll down. We are just the worst.

-----

I'm going to stop thinking about Felix for a few seconds to take a look at the arbitration process MLB wide. The reason, of course, that we've seen a slew of signings lately is that today was the deadline for clubs and players submitting arbitration numbers. For those who aren't in the know, basically if a player has sufficient service time (generally more than three years but sometimes not), they can have their salary decided by an arbitrator rather than just be at the mercy of their team. Each side submits the number they feel is most fair, an arbiter hears arguments from both parties, and chooses which figure he likes best. Once it gets to this stage, it's one number or the other - there's no turning back.

Arbitration can be a pretty contentious process, and there's every motivation to come to a settlement before it gets to that point. Today marked the day when the sides officially exchange numbers, but the arbitration itself will not occur until later - there's still time to get to a decent compromise. Very few cases even go to arbitration, so we see a lot of short term (and in some particularly happy cases, long term) contracts signed in mid-late January.

Anyway, the accepted standard salary for a player who is arb-eligible is 40%/60%/80% of their market value for the first, second, and third years of arbitration respectively. Service time often matters more than actual performance. But we have a metric that takes both service time and performance into account - namely, career WAR. While it's not perfect for reflecting recent play, it's close enough for our purposes. With it, I thought it might be interesting to compare how player-submitted figures and team-submitted figures matched up with performance level (the dollar numbers themselves can be found here). The results are quite interesting:

Figure 1: Career WAR vs. Player-Submitted Arbitration Figure, 2010. Note the difference in scale with Figure 2.

Figure 2: Career WAR vs. Team-Submitted Arbitration Figure, 2010. Note the difference in scale with Figure 1.

We can actually see which sides are being more consistent by looking at the correlation between WAR and submitted salary numbers. In the player's case, we find that the R² is 0.74, a very good match. From the teams, it's 0.68, also a good figure, but still less consistent than the player numbers. I'd be interested to see how these vary year-by-year (or even team by team). Are teams always coming out with numbers more loosely correlated to actual performance than the players are, or does this number vary? It's a very slight difference anyway, so I'd be surprised if it held up, but it'd be interesting to investigate. For 2010, though, the players are closer to their actual worth than the teams.

Of course, I'd be remiss if I posted on LL and didn't mention the arbitration-eligible players we have unsigned. Brandon League is in his first year of eligibility, Casey Kotchman is in his second. They submitted $1.325M and $3.9M respectively, and the team has countered with $900K and $3.125M. Expect contracts to be signed somewhere in between, but that's not a guarantee. Either way, the two player-submitted numbers means we can get a fix on the minimum amount of money that the Mariners have left to play with... which is a post for a little later, perhaps (or earlier?).