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Arbitrary Figure

Jan. 18, 2010
Jan. 18, 2010

Table of Contents
Jan. 18, 2010

LEADING OFF
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Inside: THE WEEK IN SPORTS
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Arbitrary Figure

Two-time Cy Young Award winner Tim Lincecum could set a new standard for the arbitration process

One morning during the first three weeks of February, Tim Lincecum, the 25-year-old righthander who has won the last two NL Cy Young Awards, might wake up in a Tampa-area hotel room and knot a tie around his neck. He might then proceed to a conference room, where for the next three hours, before a trio of arbitrators, his agents would argue that Lincecum has become the game's premier starting pitcher and ought to be paid as such. Representatives of his club, the Giants, might then contend that Lincecum, who won't even complete his third year of major league service until May, lacks the long-term track record to command one of the game's highest salaries. Within 24 hours of the arbitration hearing's conclusion, Lincecum could learn that this season he will earn a salary that will be at least 10 times the $650,000 he made in 2009.

This is an article from the Jan. 18, 2010 issue

If Lincecum's salary increases only tenfold, he and his agents will be disappointed indeed. A flock of talented players—AL Cy Young runner-up Felix Hernandez and Marlins ace Josh Johnson among them—have filed for arbitration this year, but Lincecum may represent the strongest player's case since the process was added to the collective-bargaining agreement in 1974. Players are generally eligible for arbitration after three years of major league service time, but Lincecum can take advantage of the process now because he is a so-called Super Two—he has more service time than 83% of players who currently have more than two but less than three years in the big leagues.

Lincecum, who in two full seasons has a 33--12 record, a 2.55 ERA and 526 strikeouts in 4521/3 innings, will benefit from another quirk of the CBA. When making their decisions, arbitrators are required to pay close attention to the salaries of comparable players with similar service time. But Lincecum's accomplishments, in the language of the labor deal, are "special"; as such, his agents can argue that his salary should line up with those of the game's best players, regardless of service time.

The last player to hit arbitration for the first time with a résumé close to Lincecum's was the Phillies' Ryan Howard, who in 2008, after a pair of seasons in which he slugged 105 home runs and won an MVP award, asked for and received a record $10 million. (The top salary for a pitcher in his first year of arbitration eligibility is the $6.25 million closer Jonathan Papelbon received from the Red Sox last year.) Lincecum's camp is reportedly considering asking for as much as $23,000,001, which would make him by one dollar the game's highest-paid pitcher, over the Yankees' CC Sabathia.

Neither Lincecum's agent, Rick Thurman, nor Giants general manager Brian Sabean would comment on what they will submit when players and owners exchange salary requests on Jan. 19. (If the case goes to a hearing, the arbitrator must choose either figure—there are no compromises. Historically, 90% of cases have been settled before being heard.) But one rival G.M. calls the $23,000,001 rumor "ridiculous" and notes that service time always plays a factor in compensation. Another guesses that Lincecum might ask for $13 million, the Giants could offer $7 million, and they'll settle for around $10.5 million.

The case could set a new bar for all future arbitration cases. An average pitcher, for example, could argue that he is 70% the performer that Lincecum is, so his pay should equal 70% of Lincecum's. Says Thurman, "Guys like this come along once in a generation and end up setting new standards for greatness."

The Giants could sign their ace to a long-term deal tomorrow to cover his remaining arbitration-eligible years (Lincecum won't be a free agent until after 2013), but several sources within the game suggest they shouldn't. A better plan might be to sign him to four consecutive one-year deals, the terms either mutually agreed upon or determined by arbitration. If Lincecum continues to perform at a Cy Young level, his earnings over the next four seasons could total around $75 million: $17 million less than what the Yankees will pay Sabathia over that span. If, as free agency draws near, the Giants find themselves out of contention, they could easily trade him for a haul of prospects. And if his performance deteriorates, or if he becomes injured—which many in the game believe is a distinct possibility, given Lincecum's 5'11", 160-pound frame, heavy workload and violent delivery—the Giants could simply decrease his salary the following season.

In other words, even if he creates a new arbitration paradigm, going year to year with their ace could be a bargain for the Giants.

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PHOTOJED JACOBSOHN/GETTY IMAGES (LINCECUM)EYES ON THE PRIZE Lincecum and Hernandez (below) are the two biggest stars in an arbitration class deep with talent.PHOTOJOHN FROSCHAUER/AP (HERNANDEZ)[See caption above]