Major League Baseball’s salary arbitration system holds a fascinating place in the sport’s larger labor landscape. Starting this morning, agents will be discussing with teams the salaries of approximately 170 players for the 2026 season. The formal deadline to reach a deal is 1 p.m. ET. The actual deadline is 8 pm. Most people will reach an agreement. Will not do anything. Players will enter a number they wish to pay. Teams will compete with low numbers – sometimes ridiculously low, such as a mere $25,000 spread that was sent around casey corn and this detroit tigers To be heard in 2024. And, yes, if the sides don’t settle, they actually go in front of a three-person panel, which sees the team talking about all the things the player didn’t do well in front of the player himself. This is tremendous theater – and on its stage is the best pitcher in the world today.
The league wants to end salary arbitration, eliminating potential acrimony and replace it with a formula that pays players for performance — similar to the pre-arbitration bonus system implemented in 2023, which rewards those who have yet to accrue enough service time (typically more than three years) to receive money relative to arbitration. Beyond the league’s ridicule, front offices generally hate the time spent on a process that ends up, they argue, where it would be in a formula-based system. Team executives say that, especially for such a low-leverage proposition, spending so many man hours here and there for a few million dollars is extremely inefficient. Everyone has better things to do.
And yet, regardless of the grain of truth that exists in that situation, the players stand firm on arbitration not out of respect for the Major League Baseball Players Association’s historic wins in the past, but because it has real, concrete value to them. When a team drafts a player, he negotiates his signing bonus (many of which mirror pre-slotted figures in the amateur entry system), then moves into a minor league system where salaries are set, moves to the big leagues where his first three years’ salaries are ultimately determined by the teams and only then reaches arbitration. This is already a long way. Remove arbitration, and the average player will go more than a decade without his employer saying a single word about what he’s paying him.
No one in any walk of life would want to work for 10 years without at least negotiating a raise – especially when arbitration has clearly inflated the salaries of players going through the system. Forget the size of your paycheck for a moment, because, yes, people who do things that other people can’t do and attract 75 million people a year to watch their exploits in person, are rewarded with a share of the profits in a capitalist society. It’s about agency in employment – the privilege of literally making a case for yourself.
This system, for all its quirks, is pretty neat. Comparable rules arbitration. And with its birth in 1973, two years before Catfish Hunter, Andy Messersmith and Dave McNally won free agency, the history of the arbitration system goes back more than half a century in which each side determines a player’s statistically similar predecessors and uses their salaries to decide how much a player should be paid.
Every big win or strong tackle in a hearing for a player helps his current teammates. Conversely, losses force future players to consider the wisdom of another challenge, and bad compromises fuel fire. While all 30 MLB teams report their ongoing discussions to the league’s labor relations department, the MLBPA acts as a clearinghouse for agents and does its best to unify them. The inherent nature of the infighting among the agent class – past, present and almost always over minor grievances – makes it clearly more difficult for the union to do this than for the league’s well-oiled machine, which awarded a plastic championship belt to the team that felt like the best sad arbitration salary before a story on tradition in The Athletic embarrassed MLB enough to retire it.
Against this backdrop stands the most interesting case in years, which could go in either direction. tariq skubalThe aforementioned best pitcher in the world is a two-time American League Cy Young Award winner. He is entering his sixth season with the Tigers and his third and final stint through arbitration before reaching free agency, where he is trying to become the first $400 million pitcher in baseball history.
Before then, he would set another record as the highest-paid pitcher in arbitration. The extent to which it depends on Skubal’s risk tolerance and willingness to rely on the wide berth the system offers its best players to push the limits. Because pay arbitrage is relatively contained, its rules give elites the freedom to test the limits, even if the risk of doing so scares most.
In Skubal’s case the relevant numbers are as follows: He made $10 million last year. The biggest mediocrity increase for a starting pitcher concerns jacob degrom $9.6 million in 2019 (his Cy Young season increased his salary from $7.4 million to $17 million). The biggest arbitration salary for a starter is david price $19.75 million in 2015. Whether he settles or goes to trial, Skubal will be the best of both of those numbers.
How important is the question – and where it gets really interesting. Working in Skubal’s favor are his so-called “special achievements”, which any player who has set a record or won an award can mention. Back-to-back Cy Youngs – including one in his most recent season that rewarded recency – coupled with the numbers he posted gives Skubal a case where it’s impossible to argue the negatives because there aren’t any.
On top of this there is a rarely used provision that allows players with more than five years of service time to be compared not only with previous arbitration-eligible players but with everyone in baseball. This means that if Skubal were to be selected, say, Shikhar max shazer ($43.3 million per year) or jack wheeler ($42 million) As for his comparable, he can make the case in front of an arbitration panel that because of his special accomplishments and consistent performance, he deserves a salary similar to theirs.
Arbitration, of course, is not an independent agency and was never intended to be, so Skubal’s attempt to aim for the moon is a far-fetched attempt. And because precedent matters, maybe even an arbitration record – $31 million, set by juan soto Two years ago – very difficult to follow. But it is an option. And if anyone has the motivation, it might be Skubal. He’s not just the best pitcher in the world. He is also on the MLBPA’s eight-member executive subcommittee, the most powerful group of players in the game. This is a formidable group, filled with accomplished veterans (marcus semien, Chris Bassitt, pete fairbanks, jake cronenworth, Cedric Mullins, Brent Suter) and another superstar: pittsburgh pirates ace Paul SkenesWith the current collective bargaining agreement set to expire on December 1 and arbitration reform expected to be on MLB’s priority list again, Skubal is looking to expand the boundaries of the system in a way that would be a poignant message not only to the league but to fellow players as well,
Plus, the truth is that even the biggest cases almost always end in settlement. Not just for Soto, but for shohei ohtani $30 million the year before that, even though his particular achievement was truly unique. Each case has been settled for at least $20 million or more. The highest salary was decided in the hearing in 2024, when Vladimir Guerrero Jr.Defeated the Toronto Blue Jays for $19,9 million,
The wide variety of possible approaches by Skubal and his agent, Scott Boras, forces the Tigers to play a guessing game. In a conversation lasting until 1pm (the official deadline) or 8pm (the time when the parties agree to exchange numbers), they may get a sense of where Skubble stands. There is an incentive for Detroit to make a deal and avoid any panic. However, one wonders if the Tigers’ filing numbers reflect past precedent and are close to a marginal increase, or will they be concerned that a panel with the biggest raise in seven years and the largest salary in more than a decade might entertain the idea that the scobble is actually a system-breaking case?
The Tigers are a file-and-trial team, a nickname used to describe organizations that treat the 8 p.m. deadline as a hard line: If there is no deal and the numbers are exchanged, they will go to trial. Although they’ve made exceptions — with a $25,000 spread, Mize avoided it when he agreed to a deal on a club option — Skuble is signing a one-year deal, period. And the development of mediation, which worked with greater urgency rather than waiting for a deadline to motivate action, makes the morning hours all the more urgent today.
Détente usually wins the day. Salary arbitration deadlines annually end with 15 to 25 unresolved cases in which the parties exchange numbers. Some of them are settled after the deadline, especially if the spread is small enough to find common ground. The rest go to trial, in which each side presents an hour-long case and is given 30 minutes for rebuttal.
History suggests there will be a compromise, both sides will move forward, and Skubal will report to spring training without any issues. Sure, reaching the top of the market would help someone like Skeens, but it’s not like there would be a significant waterfall effect that would elevate every starting pitcher moving forward. Any victory, whether through settlement or at trial, will be largely symbolic. baltimore orioles shortstop Gunnar Henderson For example, setting a new limit on his first year of eligibility could have a more pronounced impact on more players.
And yet that is not the point. For players, it’s more about what arbitrage offers: possibility outside the constraints of a fixed system. Flexibility in their approach, whether it’s $43.3 million or $31.5 million or $20 million. The ability to set a strategy and execute it, not some formula telling them what they’re worth. It’s a microcosm of where the game is now: efficiency is a godsend, performance has become limited to a number of wins above replacement, the human element has gone haywire.
It all leads to a frantic day where approximately 20% of big league players will learn how much they will be paid this year. The theater is open. Just sit back and enjoy the show.
