Feb
21

How to lose an arbitration case

By

Salary arbitration has always fascinated me. Basically, two sides are trying to convince someone who probably has no advanced knowledge of baseball why a player should be paid a certain amount of money for the upcoming seasons. By all accounts, it’s a fairly irrational process.

That being said, there is a wrong way to argue an arbitration hearing, and that would be by comparing your client to Michael Jordan as Chien-Ming Wang’s agents did. The Yankees, during Wang’s arbitration case, compared him to other players making similar amounts with similar experience. They noted that his 19-win total was a bit inflated due to run support (what a concept) and admitted that he was worth what the Scott Kazmirs and Joe Blantons made at the same point in their careers.

Wang’s agents went a little overboard, Jon Heyman writes:

Wang’s reps emphasized his 19-win total two straight seasons. They also tried went a little nuts in the hearing room when they described him as “the Michael Jordan of Taiwan,” and actually produced a graphic depicting how the Taiwanese stock market fluctuated on days he pitched.

As the arbitrators ruled: Who cares about that?

MLB is a $6-billion business, with only about $3 million of that coming from Taiwan. Besides, Wang makes millions in endorsements in Taiwan, separate and apart from his Yankees salary. The Yankees pointed that out, and predictably, Wang suffered a tough loss.

In this case, I think Wang’s agents didn’t do a very good job arguing the case, and the arbitrator did an excellent job cutting to the heart of the matter. Wang is making what he should be making based on his performance on the field. Do the Yankees really care of the stock market in Taiwan goes up when Wang pitches? Only if they have a lot of money invested there.

Categories : Pitching

15 Comments»

  1. Joseph P. says:

    Over the winter Wang’s agent, Alan Nero, approached the Yanks about an extension. They said, “Fine. Make us an offer.” He immediately withdrew.

    That was telling to me. Negotiators know that you never want to make the first bid. But Nero put himself in a position to make the first bid. He approached the Yanks, not the other way around. So in approaching the Yanks, he should have had a proposal ready. But he apparently did not, and cowered when asked to make one.

    Seriously, I’d probably fire him at this point.

    • Yankee Fan says:

      I agree, after hearing about the Jordan comparison and now reading this I definetely think he should fire the guy.

    • RollignWave says:

      Wang is a odd duck case, the agent that really represent him is a taiwanese dude. who then tags on to Alan Nero.

      I’m guessing that Nero actually doesn’t spend that much time on Wang and let his local agent (who’s a newbie at this) handle most of the stuff. which probably resulted in this joke of a hearing.

      not like it matters though. Wang makes a ton of money in endorsments in Taiwan. he’s real earning is probably closer to 10M instead of 4.

  2. [...] How to lose an arbitration case – Ben K. – River Ave. Blues [...]

  3. blah says:

    My understanding is that the arbitrators who hear these cases specialize in baseball arbitration. I am not sure why you (or the article you link to) think that they have “no advanced knowledge of baseball.”

    • Jamie says:

      I agree with Blah. After speaking to one of my professors who used to be an arbitrator I came to the conclusion that those who hear arbitration cases involving sports and/or baseball are actually quite fluent in the game itself – as they should be – .

    • Ben K. says:

      I wrote the linked article three years ago, and I’ve done my research on these. The arbitrators are not necessarily people who know anything about baseball. Per the Collective Bargaining Agreement:

      The Association and the LRD shall annually select the arbitrators. In the event they are unable to agree by January 1 in any year, they jointly shall request that the American Arbitration Association furnish them lists of prominent, professional arbitrators. Upon receipt of such lists, the arbitrators shall be selected by alternately striking names from the lists. All cases shall be assigned to three-arbitrator panels. The Association and the LRD shall designate one arbitrator to serve as the panel chair.

      Now I’m sure all effort is made to pick a panel of people who know about baseball, but as I read it, the arbitrators from the AAA could know about sports or could know nothing about sports. It truly is arbitrary, and the trick is to assume the panel knows nothing and convince them otherwise.

  4. csd says:

    Nero and his team is a joke.
    All the points they made is irrelevant.
    Not at professional level at all.
    Wang should look for another agent!

  5. Mike R. says:

    Someone tell Nero that Michael Jordan made $845,000 in his fourth year in the league. Adjust for inflation and give him that.

  6. Ed says:

    Here’s my take on it. I think Wang knew fully well that $4 million was a very good offer. I remember reading a quote from him that he went into the offseason only expecting $3 – $3.5 million – unfortunately I have no idea where I read that.

    He wasn’t going into this trying to get a salary he deserved, but rather trying to see if he could get even higher than that.

    The Yankees went into this making sure they had a fair offer, as they really didn’t want to lose. Losing this case would’ve set the bar $600,000 higher when the Big Three become arbitration eligible.

  7. Jason Lee says:

    Wang is the National hero of Taiwan and the ace of the Yankees over the last two seasons. His consistency kept the Yanks in the race and they should thank him for that. Its a shame that they nickle and dime him over a few hundred thousand. I believe from what i read in the Taiwanese press, Wang’s agents brought up the issues that Jon Heyman of SI raised in his commentary as part of their argument validating Wang’s public appeal which is a mandatory criteria for MLB salary arbitration. (that Michael Jordan comparision is an analogy trying to show the arbitrators what Wang is like to Taiwan using a figure that the american arbitrators can understand and personally relate to and presumably none of those arbitrators have been to taiwan.) That is only one section of their entire case which according to Nero’s interview with the taiwanese press, Wang’s baseball numbers alone and the length and consistency of his career should bring him to Willis, and how come other overpaid veteran pitchers on the yankees who gets the same run support as wang can not deliver two straight 19 win seasons? both Wang and willis have 46 wins and Wang has the most wins of any MLB pitchers in the last two seasons.
    Heyman’s quite Ethnocentric in his comments..Should Wang’s rep completely ignore Wang’s public appeal and what he brings to MLB/Yankees off the field? has Mr. Heyman ever been in Taiwan and witness the emergence of Wang and what that does for the yankees and MLB in terms of new business revenue?. Is he saying that MLB/yankees doesnot care about Taiwan in its efforts to grow the game internationally through rising new foreign stars…..they certainly care enough about taiwan to raise its MLB broadcast rights in 2007. i understand taiwan is a small country but Heyman’s comments is quite disrespectful and ignorant. If Wang’s public appeal (which is a clear arbitration criteria)is a completely far fetched as Heyman stated, why would Time Magazine select Wang as one of the Most influential person of 2007?

    • GSE says:

      > Is he saying that MLB/yankees doesnot care about Taiwan in its efforts to grow the game internationally through rising new foreign stars…

      ehh…. sorry, they don’t care…

      > they certainly care enough about taiwan to raise its MLB broadcast rights in 2007.

      who wouldn’t? that’s business… everybody wants to make MORE money, but the revenue generated from Taiwan is really a peanut for MLB compared to other foreign markets, such as Japanese market. So you can’t really ask them to care about Taiwan…

      but making more money from that small market? sure! why not! who wouldn’t?

  8. [...] Two years ago, the Yankees were unable to come to a compromise with Chien-Ming Wang. The Yanks won the hearing and saved themselves not only $600,000 for the 2008 season, but the carry over effect saved them [...]

  9. [...] to one if they feel the player is asking for unfair compensation. Chien-Ming Wang learned this the hard way back in [...]

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