Comments on: Arbitration Break Down http://www.bronxbanterblog.com/2009/12/03/arbitration-break-down/ Development site for Bronx Banter Blog's upcoming look and feel Tue, 21 May 2013 16:22:21 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: williamnyy23 http://www.bronxbanterblog.com/2009/12/03/arbitration-break-down/#comment-248456 williamnyy23 Thu, 03 Dec 2009 19:58:09 +0000 http://www.bronxbanterblog.com/?p=26853#comment-248456 [6] [8] Actually, you are right. The 80% rule only applies to non-free agents offered arbitration. Still, the general concept applies. While the current market can be used a factor as it applies to current comparable salaries, the guidelines call for more extensive comparable analysis (i.e., going back more than one year) as well as significant consideration of the player's current and past performance as well as perceived contribution ot the team. [6] [8] Actually, you are right. The 80% rule only applies to non-free agents offered arbitration. Still, the general concept applies. While the current market can be used a factor as it applies to current comparable salaries, the guidelines call for more extensive comparable analysis (i.e., going back more than one year) as well as significant consideration of the player’s current and past performance as well as perceived contribution ot the team.

]]> By: williamnyy23 http://www.bronxbanterblog.com/2009/12/03/arbitration-break-down/#comment-248455 williamnyy23 Thu, 03 Dec 2009 19:28:39 +0000 http://www.bronxbanterblog.com/?p=26853#comment-248455 [4] Whether it ends up being a good deal depends on how the Mets used the $5.9mn they didn't pay Bonilla in 2000. If they could invest it at 7% over the 35 years, they would come out slightly ahead in terms of real dollars: From 2000 to 2011 they could have grown the $5.9mn to $12.4mn and then continued to earn a declining amount of interest while paying the annuity. That would leave them with a positive balance from the $12.4mn "seed" money until about 2031, after which they would have to pay the $1.19mn from out of "pcoket". The outlays would total aout $5.5mn, compared to the $5.9mn in 2000. Of course, you'd also have to determine the present versus future value of money. Assuming inflation, the $5.9mn in 2000 would be signiicantly greater than the $5.5mn in 2000, meaning that an even lower rate of investment return could still make it a good deal. Then again, if you invested the $5.9mn with Bernie Madoff, well, let's just say it wouldn't be such a good deal. [4] Whether it ends up being a good deal depends on how the Mets used the $5.9mn they didn’t pay Bonilla in 2000. If they could invest it at 7% over the 35 years, they would come out slightly ahead in terms of real dollars:

From 2000 to 2011 they could have grown the $5.9mn to $12.4mn and then continued to earn a declining amount of interest while paying the annuity. That would leave them with a positive balance from the $12.4mn “seed” money until about 2031, after which they would have to pay the $1.19mn from out of “pcoket”. The outlays would total aout $5.5mn, compared to the $5.9mn in 2000.

Of course, you’d also have to determine the present versus future value of money. Assuming inflation, the $5.9mn in 2000 would be signiicantly greater than the $5.5mn in 2000, meaning that an even lower rate of investment return could still make it a good deal.

Then again, if you invested the $5.9mn with Bernie Madoff, well, let’s just say it wouldn’t be such a good deal.

]]> By: jonnystrongleg http://www.bronxbanterblog.com/2009/12/03/arbitration-break-down/#comment-248454 jonnystrongleg Thu, 03 Dec 2009 19:24:15 +0000 http://www.bronxbanterblog.com/?p=26853#comment-248454 Thanks 3 & 5. And I assume the arbiter would/could not have considered the current depressed market for comparable players over the last 2 years when awarding that likely raise? Thanks 3 & 5.

And I assume the arbiter would/could not have considered the current depressed market for comparable players over the last 2 years when awarding that likely raise?

]]> By: vockins http://www.bronxbanterblog.com/2009/12/03/arbitration-break-down/#comment-248453 vockins Thu, 03 Dec 2009 19:24:05 +0000 http://www.bronxbanterblog.com/?p=26853#comment-248453 [4] That's assuming the currency revaluation after The Saturnian Wars works in the Mets favor. [4] That’s assuming the currency revaluation after The Saturnian Wars works in the Mets favor.

]]> By: Shaun P. http://www.bronxbanterblog.com/2009/12/03/arbitration-break-down/#comment-248452 Shaun P. Thu, 03 Dec 2009 19:17:01 +0000 http://www.bronxbanterblog.com/?p=26853#comment-248452 [3] [5] D'oh. I completely forgot the 20% rule. My bad. And of course since the Yanks didn't offer Damon arbitration, it really doesn't matter . . . I still would have liked those draft picks. [3] [5] D’oh. I completely forgot the 20% rule. My bad.

And of course since the Yanks didn’t offer Damon arbitration, it really doesn’t matter . . . I still would have liked those draft picks.

]]> By: williamnyy23 http://www.bronxbanterblog.com/2009/12/03/arbitration-break-down/#comment-248451 williamnyy23 Thu, 03 Dec 2009 19:08:36 +0000 http://www.bronxbanterblog.com/?p=26853#comment-248451 [1] For starters, players can't receive greater than a 20% paycut in arbitration, so the least Damon could be awarded is $10.4mn, which is higher than the Abreu benchmark that many think should apply to Damon. In Damon’s case, he had a very good season and has significant tenure, making his benchmark a lot higher than market value. In other words, a raise is likely and 20% sounds like a pretty good starting point. If that’s is so, then Damon becomes a $15mn+ player. I actually think the arbitration award would be higher, making it possible that the Yankees could wind up with Damon for one year at Holliday-like prices. [1] For starters, players can’t receive greater than a 20% paycut in arbitration, so the least Damon could be awarded is $10.4mn, which is higher than the Abreu benchmark that many think should apply to Damon.

In Damon’s case, he had a very good season and has significant tenure, making his benchmark a lot higher than market value. In other words, a raise is likely and 20% sounds like a pretty good starting point. If that’s is so, then Damon becomes a $15mn+ player. I actually think the arbitration award would be higher, making it possible that the Yankees could wind up with Damon for one year at Holliday-like prices.

]]> By: Shaun P. http://www.bronxbanterblog.com/2009/12/03/arbitration-break-down/#comment-248450 Shaun P. Thu, 03 Dec 2009 19:07:42 +0000 http://www.bronxbanterblog.com/?p=26853#comment-248450 [2] This is william's forte, not mine, but while the total accumulated value of that annuity will be $30M, its not going to be $30M in present-day value, and so its not really as bad as it looks. I understand the pain over paying Bonilla until 2035 though. [2] This is william’s forte, not mine, but while the total accumulated value of that annuity will be $30M, its not going to be $30M in present-day value, and so its not really as bad as it looks. I understand the pain over paying Bonilla until 2035 though.

]]> By: Shaun P. http://www.bronxbanterblog.com/2009/12/03/arbitration-break-down/#comment-248449 Shaun P. Thu, 03 Dec 2009 19:04:03 +0000 http://www.bronxbanterblog.com/?p=26853#comment-248449 [1] A player in arbitration can't get less money than they made the year before. So, the starting point is Damon's $13M salary from '09. In arbitration, the team and the player each suggest a salary, and the arbitrator picks one after hearing the arguments for and against. The incentive is thus for teams and agents to play fair; play too much hardball, and you likely lose. So $13M starting point + great year with bat + horrible year with glove comes out to around $15M. [1] A player in arbitration can’t get less money than they made the year before. So, the starting point is Damon’s $13M salary from ’09.

In arbitration, the team and the player each suggest a salary, and the arbitrator picks one after hearing the arguments for and against. The incentive is thus for teams and agents to play fair; play too much hardball, and you likely lose.

So $13M starting point + great year with bat + horrible year with glove comes out to around $15M.

]]> By: Diane Firstman http://www.bronxbanterblog.com/2009/12/03/arbitration-break-down/#comment-248448 Diane Firstman Thu, 03 Dec 2009 18:47:07 +0000 http://www.bronxbanterblog.com/?p=26853#comment-248448 Meanwhile, over in sad sack Flushing ... http://www.metspolice.com/2009/12/bobby-bonillas-annuity-2011-2035.html Meanwhile, over in sad sack Flushing …
http://www.metspolice.com/2009/12/bobby-bonillas-annuity-2011-2035.html

]]> By: jonnystrongleg http://www.bronxbanterblog.com/2009/12/03/arbitration-break-down/#comment-248447 jonnystrongleg Thu, 03 Dec 2009 18:21:12 +0000 http://www.bronxbanterblog.com/?p=26853#comment-248447 Alex, it seems like it's well agreed upon that Damon stands to get a big # (15 million is often cited) in arbitration. Forgive my ignorance, but what's the rationale behind that? Alex, it seems like it’s well agreed upon that Damon stands to get a big # (15 million is often cited) in arbitration. Forgive my ignorance, but what’s the rationale behind that?

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