For all those owners who view free agency as the Achilles' heel of baseball, there was a harsh reminder last week that in Hellenistic lore, Pyrrhus was a descendant of Achilles. The annual February slugout known as salary arbitration ended, and when the gold dust settled, the clubs had again redefined the term Pyrrhic victory. The owners won seven of the 13 cases this year and have a 102-86 record since arbitration began in 1974. But in the same period the average annual salary has risen from $40,839 to $329,408. And the highest individual salary has grown from Dick Allen's $225,000 to Mike Schmidt's $2,130,000.
All of this explains why the owners were so happy to see the beginning of spring training. It meant the end of another financially gloomy winter. Everywhere you looked, someone was signing a seven-figure, or—Calvin Griffith just fainted—an eight-figure contract. At least 36 players will make $1 million or more in 1985, compared with 22 in 1984. Two of those players, Montreal's Tim Raines and Boston's Wade Boggs, made their million through arbitration in February. Other, more established players used free agency or its threat to negotiate long-term bonanzas. In Baltimore: Fred Lynn, five years, $6.8 million. In Chicago: Rick Sutcliffe, five years, $9 million. In Atlanta: Bruce Sutter, six years, $9.6 million. And in Boston, Jim Rice signed a four-year escalating extension that will start at $1.5 million a year beginning in 1986. Add these to the growing number of clubs for sale and the widening pool of red ink in which the teams are wallowing, and it's no wonder that baseball executives sound like the Chicken Little Glee Club. It has been said that, all told, the clubs suffered $80 million to $120 million in losses last year and that eight teams are on the block to be sold.
But let the buyer beware. Not only have salaries gone through the roof, but you can't just sign a player to a certain salary; you have to sweeten the deal with bonuses or incentive clauses. The salaries of the 36 players listed on the cover were determined by adding prorated signing bonuses to base pay but, of course, don't include incentive payouts. The only exception to the formula is Rice, who in 1985 will receive $1.35 million of his new $3.2 million bonus. (On the same day last month that Rice signed, the Red Sox, who ranked 16th in average salary in '84, also signed reliever Bob Stanley to a four-year, $4.3 million extension that will make him a millionaire next year, and heard from an arbitrator that they would have to pay Boggs $1 million this year. Triple play!)
Some familiar names are missing from the list, but those players planned it that way. San Diego first baseman Steve Garvey earned $1.85 million in 1983, but because he knew 1985 could be interrupted by a strike, his contract was structured to yield only $800,000 this season. For the same reason, Toronto reliever Bill Caudill will take $500,000 in base salary in '85 and $1.2 million in '86. Others have performance and/or attendance clauses that should be easily achieved: Cub third baseman Ron Cey will make $950,000 in base pay and prorated bonus this year and will probably equal the $500,000 in attendance bonuses he was given last season.
Thanks to arbitration, which determines a player's salary for one season, some players don't need a bonus to make a million. All it takes is at least two years in the majors, some knock-your-eyes-out statistics and an inflationary market. It certainly worked out that way last week for Raines at a hearing in Chicago. At stake was whether Raines, 25, with less than five full years of major league experience, would receive his requested $1.2 million from arbitrator Tom Roberts and become baseball's 36th million-dollar player for 1985, or the Expos' offer of $1 million and become baseball's 36th million-dollar player for 1985.
"I began hearing baseball cases in 1974, the first year they were held," says Roberts, a 61-year-old Los Angeles-area attorney. His first case involved Cito Gaston, then a veteran San Diego outfielder and now the Toronto batting coach. "The club offered $42,000, and Gaston asked $50,000," Roberts says, and, with a touch of wonderment, adds, "Imagine that."
Better yet, imagine that 11 years later, Raines would win the largest arbitration award ever and hardly anyone in baseball would bat an eye. What's a million these days? "This is not a landmark case by any stretch," says Tom Reich, Raines's agent.
There is little dispute about Raines's talent. His career stolen-base percentage of .863 is a major league record. In 1983 he scored 133 runs, a National League record of 19.6% of his team's scoring. He has led the league in stolen bases in each of his first four seasons and was an All-Star every year. His career batting average is .293 and his career on-base percentage is .380.
How much are good stats worth? A lot more than a year, six months or even two weeks ago. Under a system of player compensation in which salary standards just keep soaring, it doesn't take a David Stockman to figure out how much Raines was helped by an arbitrator's decision in favor of Boggs on Feb. 13. Boggs was awarded $1 million; the Red Sox had offered $675,000.
Only three players and no clubs were prepared to submit figures of $1 million or more to an arbitrator before 1985, but—talk about salary spirals—seven players and three clubs did so this year. All but three of those cases were settled beforehand; in those that went to arbitration, the winners were Raines and Boggs, and the loser was Chicago Cub first baseman Leon Durham, who will receive $800,000 instead of his requested $1.1 million. Durham's "defeat" brought the fifth-highest arbitration award in history. New York Met reliever Jesse Orosco lost his case but still came away with $650,000, the seventh-highest. He had asked for $850,000. (Fellow reliever Doug Sisk also lost, getting $275,000 after asking for $470,000.) As Julio Cruz said in 1983 after he lost his bid for $500,000 and instead received $425,000 from the Mariners, "I could have been one richer Puerto Rican, but now I'm just a rich Puerto Rican."
Eager to check the bleeding, the owners want to modify salary arbitration in the current collective bargaining agreement talks with the Major League Baseball Players Association. "We don't feel it's working fairly for the clubs," says Lee MacPhail, president of the Player Relations Committee. "We had salary arbitration in place when we had the reserve system, and now, with free agency, the clubs feel they're being whipsawed between the two." The players—surprise—would like to expand the system so that more players are eligible.
As with free agency, just the threat of arbitration can result in a big raise. Of the 97 players who filed for arbitration this year, only 13 reached the hearing room. The biggest winner of those who stopped at the brink was Caudill, who submitted a figure of $1.3 million against the Blue Jays' offer of $850,000. Eight minutes before his scheduled hearing last week, Caudill signed a five-year, $7 million contract. Blue Jay general manager Pat Gillick hadn't given him that offer until 12 hours before the hearing was to begin. "If you have a house payment due on the first of every month," Gillick says, "you don't make it before then."
All arbitration cases are held between Feb. 1 and Feb. 20. At the beginning of each hearing, the arbitrator, whose fee is $475 per day, is given two signed, fully executed contracts—one for each side—except for salary. Either side may veto a particular arbitrator, which is understandable. "We have been in arbitrations where we had to explain what a save was," says player agent Alan Hendricks. "My kind of guy would be a) a qualified arbitrator and b) a guy who could hold his own in a barroom discussion of baseball." Counters Tal Smith, the baseball consultant who serves as the "owner's agent" for the Expos and 12 other clubs in arbitration proceedings, "I'd just as soon he not be a dyed-in-the-wool fan. If he understands theories, the terminology and the exhibits, that's enough."
Although hearings always begin in an atmosphere of decorum, things can get out of hand. Says one experienced arbitrator, "When you spend seven hours having people throwing numbers at you and losing their temper, it becomes less than a fan's dream." It can be less than a player's dream as well. "Arbitration can be like when Johnny goes marching off to war," Hendricks says. "He's wearing a crisp uniform, he's in high spirits and there's a band playing. A few weeks later he's bloodied, the uniform is in tatters and there's no band playing, and war is hell."
One player became so overwrought during his hearing this year that he began to cry, and he won. After Durham lost his case last week, he said he was still "a happy Bull," but he called Cubs representative Robert Dufek's mention of his crucial seventh-inning error in Game 5 of last year's NL playoffs "a low blow." He told the Chicago Tribune, "They tried to lay all that on me, like I was the whole cause for us losing. I didn't think that was right. That was kind of dirty."
When outfielder Rickey Henderson lost his case against the A's in 1984 and had to settle for $950,000 instead of his requested $1.2 million, he seemed to mope through the early part of the season. In 1983, Toronto second baseman Damaso Garcia demanded to be traded after his hearing, and he had won. The owners are usually more discreet. Last year the four players who won their cases in February—Cleveland's George Frazier, Seattle's Ron Roenicke, Cincinnati's Paul Householder and San Diego's Juan Bonilla—had been traded or released by season's end.
Some teams will do almost anything to avoid the backlash of arbitration. Milwaukee general manager Harry Dalton is so wary that the Brewers have never gone before an arbitrator. "I think the club and the player are best suited to know what contribution or lack of contribution has been made, and they should work it out," Dalton says. In contrast, the Expos went to arbitration four times this year and won only once, a $115,000 salary for catcher Bobby Ramos, who wanted $150,000.
There was considerably more at stake in the Raines hearing: Montreal made the biggest offer in arbitration history. When the Raines hearing began—half an hour late, as last-minute negotiations failed—Raines, Reich, three other lawyers and Baseball Abstract author Bill James, who provides statistical support for both Reich and Hendricks in their arbitration cases, sat across the table from Montreal vice-president Bill Stoneman, Smith and his cadre of five. The union had a representative and the PRC had two. Through 4¼ hours—three hours of notably polite testimony plus breaks—the two sides presented more than 100 pages of exhibits representing well over 1,000 hours of research.
In his testimony, Smith pointed out that Boggs outshone Raines in career batting average (.344 to .293), on-base percentage (.421 to .380) and slugging percentage (.448 to .412). Sam Reich rebutted by feigning amazement that Smith didn't mention Raines's propensity to steal bases. "I represent a player with unique values," Sam began. "It seems to be my fate that when I represent a power player, the other side wants to talk about how many bases he steals. When I have a player who scores runs, they want to talk about slugging percentage. If you want to cut off Mr. Raines's legs, then he is not worth what we are asking. While you are cutting off his legs, you should take away Ozzie Smith's glove [the St. Louis shortstop will earn $1.3 million in 1985] or Tony Pena's glove [the Pittsburgh catcher will earn $950,000]. If you look at their batting average, on-base percentage and slugging percentage, these players would not get the money they will receive. We say when you judge a player, judge on what he is paid to do. The other side says, 'Let's ignore what he is paid to do.' " And so it went on both sides.
At the close of the hearing, Smith said, "The salary decided upon today will serve as a base for Mr. Raines's subsequent salaries. One million dollars is more than ample recognition. Anything more would be frankly premature."
But with salary demands escalating so dramatically these days, no figure has a chance to mature. Raines got his $1.2 million. Do we hear $3 million? $5 million? $10 million?
Increase of new salary over old
Increase of new salary
Since arbitration began, the average salaries offered, asked and awarded have risen so steeply that even losers are winners.