The business of baseball continues, and for the Royals, the arbitration process could be huge. While they only have four players eligible for arbitration - Danny Duffy, Jarrod Dyson, Kelvin Herrera, and Eric Hosmer - those players will make up a significant portion of the payroll. According to estimates by MLB Trade Rumors, those four players will cost the Royals nearly $30 million in salary in 2017.
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The arbitration process begins today, with clubs permitted to exchange formal salary offers with arbitration-eligible players before next Friday’s January 13 deadline. Generally, players with at least three years of Major League experience, who are not yet eligible for free agency, are eligible for salary arbitration. Players with less than three years of experience, but are within the top 22% of service time among players with only two years of experience may also qualify under "Super-Two" status.
Arbitration is a collectively-bargained process that allows eligible players not eligible for free agency to have their salary determined by an impartial arbiter if they cannot come to terms with a club. The club and player will each submit a salary offer, and will later make a case before the arbiter at a hearing scheduled in the first three weeks of February. The arbiter can side with the club or the player, but the arbiter must select one of the submitted salaries, not split the difference.
Players can officially file for arbitration on Tuesday, January 10, typically a formality that leaves the option to go to arbitration if the players and club cannot agree on a contract. They can come to terms with the club on a contract at any time during the arbitration process, which would render a hearing moot. The Royals are said to be engaged in long-term contract talks with Duffy, and could backload his deal to give them more payroll flexibility in 2017.
The arbitration process can be quite contentious, with the player arguing why he is valuable, and the team arguing why the player wasn’t as valuable as suggested. Accordingly, many clubs look to avoid the process by coming to terms, and the number of hearing has dropped significantly over time. The Royals have not had an arbitration hearing with a player since 2006, when then-General Manager Allard Baird lost his case against Emil Brown. Historically, they have had 19 arbitration hearings, and have won just 47%, one of the worst success rates among Major League clubs.