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Message
Need help understanding baseball rookie contracts
Posted on 7/30/14 at 12:20 pm
Posted on 7/30/14 at 12:20 pm
I understand a large component of a coveted rookie contract is upfront money. Take Kevin Gausman last year for instance, whose contract "includes a 4.32 signing bonus."
So as I understand it, Gausman gets $4.32 million unless he violates terms of the agreement. Is this depreciated over the length of his contract or given as a lump sum?
Additionally, looking at Baseball Reference, Gausman's salary is $502,000 for the 2014 season. I presume this is in addition to is bonus money like other sports contracts. One of my questions is, Gausman is not available for pre-artibration until 2017, not FA until 2020.
Thus, say Gausman has a breakout year next year and wins 15 games. When 2016 comes around, would Baltimore consider signing him to a new contract to lock him up long term, or is that even allowed/considered, in a pre-arbitration period?
So as I understand it, Gausman gets $4.32 million unless he violates terms of the agreement. Is this depreciated over the length of his contract or given as a lump sum?
Additionally, looking at Baseball Reference, Gausman's salary is $502,000 for the 2014 season. I presume this is in addition to is bonus money like other sports contracts. One of my questions is, Gausman is not available for pre-artibration until 2017, not FA until 2020.
Thus, say Gausman has a breakout year next year and wins 15 games. When 2016 comes around, would Baltimore consider signing him to a new contract to lock him up long term, or is that even allowed/considered, in a pre-arbitration period?
This post was edited on 7/30/14 at 12:22 pm
1
Posted on 7/30/14 at 12:24 pm to LSUtoOmaha
quote:
When 2016 comes around, would Baltimore consider signing him to a new contract to lock him up long term, or is that even allowed/considered, in a pre-arbitration period?
They wouldn't want to and he wouldn't expect that.
It's not like he could hold out for 5 years
Posted on 7/30/14 at 12:25 pm to KosmoCramer
So in the pre-arbitration case, if Gausman put up, say 30 wins in a 2-year period, while his annual salary is something like $700,000 at that point, would a judge rule in his favor to get more money over the course of his current contract? Or is he basically just stuck until he hits FA?
This post was edited on 7/30/14 at 12:27 pm
Posted on 7/30/14 at 1:03 pm to LSUtoOmaha
quote:
Basically just stuck until he hits FA
Posted on 7/30/14 at 1:57 pm to LSUtoOmaha
quote:
Or is he basically just stuck until he hits FA?
He is a cost controlled asset. If you kill it during your arbitration years, you can make some serious monies though.
Posted on 7/30/14 at 2:18 pm to Jcorye1
Thanks for the responses. If we change it to say, a 10th round player who only had a 100k bonus, what is his salary if he makes it to the majors and sticks?
Would he just make the minimum (I think $1,500 a day) until his 6 years were up?
Would he just make the minimum (I think $1,500 a day) until his 6 years were up?
Posted on 7/30/14 at 2:19 pm to LSUtoOmaha
I could be wrong, but arbitration numbers are based on actual production, not where you were drafted.
Posted on 7/30/14 at 2:30 pm to LSUtoOmaha
This is how arbitration works in the MLB:
So the player needs to low-ball their offer a bit and the team needs to pay a bit more because they don't know what the other side's number is.
Since they can't split the difference, this creates a race to the middle (either on the low side or high side) to mitigate the difference paid.
In other words, let's say the arbitrators feel a player is worth $3 Million dollars a year. If the player submits a bid for $5 Million and the club submits a salary of $750,000, the club will most likely lose because they are further away from what the player truly deserves.
Arbitration is a game.
quote:
The process is what is known as "Final Offer Arbitration" (though in the world of alternative dispute resolution it is now becoming known simply as "Baseball Arbitration"). In mid-January, each side to the dispute submits a salary figure to a panel of independent arbitrators. After a few hours of hearings, held in early February, the arbitrators pick one figure or the other. The arbitrator cannot "split the baby" and settle on a salary in the middle of the spread between the club's figure and the player's. One side leaves the arbitration a winner and the other a loser, heightening risk and encouraging negotiation and settlement.
This is the critical element of baseball arbitration: it is designed to produce a settlement, not a verdict.
So the player needs to low-ball their offer a bit and the team needs to pay a bit more because they don't know what the other side's number is.
Since they can't split the difference, this creates a race to the middle (either on the low side or high side) to mitigate the difference paid.
In other words, let's say the arbitrators feel a player is worth $3 Million dollars a year. If the player submits a bid for $5 Million and the club submits a salary of $750,000, the club will most likely lose because they are further away from what the player truly deserves.
Arbitration is a game.
Posted on 7/30/14 at 2:34 pm to KosmoCramer
Interesting. So this type of settlement would be, a) based on a player's production, and b) between the players' 4th and 5th years of his rookie contract?
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