Atlanta Braves: Losing in arbitration won't bother Max Fried

The Atlanta Braves and top starter Max Fried couldn’t agree on a contract. When cases like this arise, the CBA allows the player to take his case to binding arbitration.

The arbiter sided with the Atlanta Braves, who will now pay Fried $13.5M in his second year of arbitration rather than the $15M Fried requested at filing. As I read fan reactions, it became clear that many Braves fans:

• Didn’t like the decision, and
• Don’t understand why such a small gap caused a hearing,

Clearing that up requires a look at the system, how it evolved, its rules, who the arbiters are, and why hearings take place. Detailing all that would take more space than I have, so I’ll give you the Cliff Notes version.

Arbitration became part of the game after a month of intensive negotiations that led to its inclusion in the first collective bargaining agreement in 1968.

The who, what, when, and how are found in Article VI, Section E, Part 10 (a) & (b) of the Collective Bargaining Agreement. I’ll reference that throughout and link other sources as needed.

Baseball Arbitration

The method worked out by the leagues and Marvin Miller’s newly minted MLBPA was a different approach than arbitration in other industries because of its final offer format. While the system is known as final offer, yes-no, or pendulum arbitration, but baseball arbitration earned its own definition.

The agreed format ends player hold-outs like that of Sandy Koufax and Don Drysdale in 1966 and allows teams to begin play even if a final decision hasn’t been delivered before the season starts.

Baseball Arbitration (B-Arb) limits the arbiters’ discretion to a choice between offers. The hearing is held in front of a three-person arbitration panel selected by the MLBPA and MLB Labor Relations.

There are two types of B-Arb, day and night, but the rules are the same for each. In both types:

• The lead arbiter receives each side’s final offer before the hearing in the form of a signed uniform player contract.
• A hearing is held allowing both sides to present their case and offer a rebuttal.
• Arbiters value (weigh) the evidence using whatever logic they want to reach their decision
• A decision is provided to the MLBPA and MLB within 24 hours after the end of the hearing.

The decision is not explained to the player or team, but the MLBPA and MLB are given a record of voting to aid in selection for the following year.

Different as Day and Night

In day arbitration, the panel knows the offers before the hearing and chooses one after the hearing ends. Day arbitration is used for hearing like the one held for Max Fried and the Atlanta Braves.

Fun fact, a team may offer a free agent arbitration, but they rarely accept since it’s always a one-year contract, and the player generally wants more than one year. When a team offers a free agent arbitration, the panel typically uses Night Arbitration.

Night arbitration differs in that the panel receives the offers before the hearing but doesn’t read them until they’ve made a final decision based on their research.

The panel’s researched the player and created a number they feel is correct for the player. After the hearing, they revisit their estimate, compare it to the offers, and choose the offer closest to their estimate,

Night arbitration only works for free-agent arbitration because we rarely know it’s happening.
Raise your hand if you knew that the Atlanta Braves offered Greg Maddux arbitration after the 2003 season and ended up paying Mad Dog $14.75Ml.

The Mysterious Arbiter

Before the season begins, the MLBPA and MLB Labore Relations select 16 professional arbitrators from a longer list previously agreed upon. According to Thomas Gordan’s 2005 post, the Individuals selected aren’t random guys from the local sports bar.

. . .  arbitrators are lawyers and judges with extensive arbitration experience and arbitration certification from a professional guild like the (American Arbitration Association). . .

Gorman found that once arbiters are selected, they tend to stay around, which makes sense as arbiters must understand the evidence placed before them and be able to make an informed decision.

Baseball arbitration is considered a pretty good gig . . . Some observers cynically note that to keep the job you can’t side consistently with one side or the other, lest the other group nix you from the job in future seasons.

Arbiters know their job and are good at it. If they weren’t, either the union or MLB would strike the offending arbiter from the list.

Comparing Compensation with Peers

Before hearings begin, MLB provides the panel with a table containing confidential salary data, sorted on service time. The panel compares offers to the salaries of players with the same service time and those with one more year.

For example, the Atlanta Braves and Max Fried could have compared his salary with any player having four or five years service time, like Julio Urias (5.117 yrs) or Juan Soto (4.134), but not with Joe Musgrove (6.063 yrs) or Taijuan Walker (8.142 yrs.) Note that Fried is compared to all players with four or five years service time, not just the pitchers

Today’s teams know the market value of their player. A team rarely undervalues a player by a wide margin. When a player goes to a hearing over a small difference, it’s a forward-looking strategy built by the agent and, in some cases, encouraged by the union.

Max Fried

Fried is both the team’s number-one starter and union rep. The union encourages its star players to push the envelope during salary negotiations. It’s realistic to believe that Fried fits that category and would push the envelope.

In 2022, he convinced the panel he was worth $250K more than the Braves offered. His ask was close to projections and didn’t move the pay needle much, but it was a small win giving his agent a feel for what the Braves might say in 2023.

Fried’s final offer this year is $2.8M more than the MLBTR projection and $1.5M more than the Atlanta Braves final offer.

The Atlanta Braves' Offer

The Braves are a file and trial team. That strategy tells you that the club won’t step over the amount they’ve penciled in, neither will they throw out their best offer immediately.

MLBTR projected Fried at $12.2M, and the Braves likely started negotiating near that point, knowing they wouldn’t exceed $13.5M. The Braves’ final offer was $1.3M above the MLBTR projection. If Fried’s negotiation had come close to $13.5M – and $15M is close – the hearing wouldn’t have happened.

Fried and his agent wanted a hearing and tried to set a record for the largest-ever award by an arbitration panel.

But the panel of Mark Burstein, Fredric Horowitz, and Jeanne agreed with the Braves, and Fried managed only a tie with Gerrit Cole’s 2019 award as the highest decided by an arbitration panel.

No Hard Feelings

While the media and union talk about players losing in arbitration, that doesn’t happen. Even when the panel sides with the team, the player wins insight into next year and scores a PR victory for the union while giving up anything. This is why most players and teams would rather find a solution they fight the PR aftermath.

Players that do take part should think twice about attending the hearing if they don’t understand that business is business. See also Marcus Stroman. I don’t know if Fried attended the hearing, but I doubt he took it personally or holds a grudge against the Atlanta Braves.

The hearing was a strategic decision by Fried and his agent to set the stage for next year. He’s not mad; I doubt he expected to win.

As I was getting ready to publish this morning, I saw this quote from former Marlins President David Sampson.

“I promise you that Max Fried has zero ill will towards the Atlanta Braves for taking him to arbitration . . .Zero. It is all manufactured. Agents. . .(trying) to make owners uncomfortable. . . to get owners to settle , , ,to overpay . . . . . . Max Fried is going to perform . . . he’s not thinking about it anymore, he’s focused on winning the Cy Young and, more importantly, getting back to the World Series.”

Atlanta Braves Could Extend Fried

The Braves are paying him $1.5M more than projections, so they value him highly, and an extension is possible after the season begins. Morton’s contract. along with several others, end after this season, and the CBT threshold goes up in 2024. Fried will pitch at 31 in 2025, but on David O'Brien's 755 is Alive podcast, AA explained what makes him a pitcher to build around.

“Max is a stud . . , great in the clubhouse, and he’s the type . . . to age well . . . he keeps getting better. . .he came up as the curveball, heater, super athlete . . .(and) developed a slider on his own, developed the two-seamer on his own, developed a changeup on his own.”

The last time we saw a comparable contract was 2019, when the Dodgers gave Clayton Kershaw a three-year $93M deal. Fried doesn't have the history of Kershaw, or Chris Sale, who received a five-year $145M deal with lots of options after 2018.

Fried's 2022 was better than Kershaw's 2019 but not quite as good as Sale's 2028, nor does he have the stuff Sale flashed that year. But as AA said, Fried is a stud, so a six-year $156M extension that buys out his last Arbitration year and adds five guaranteed years looks reasonable.

That’s a Wrap

Despite complaints from both sides of the aisle, baseball arbitration is a success. The system ended player holdouts, forcing teams and players to sit down and negotiate agreements rather than beat each other up verbally, and ushered in continuously increasing player salaries.

The Atlanta Braves' offer to Fried was less than he’d have earned in free agency, but that’s always going to happen. His contract exceeds all projections by at least $1M and sets him up to hit or pass the $20M mark next year. No one was cheated, lowballed, or snubbed, and Max isn't worried about it.