Analyzing arb cases for Hader, Woodruff

January 13th, 2021

MILWAUKEE -- The Brewers have business with All-Star pitchers Josh Hader and Brandon Woodruff on Friday, which is the deadline for teams to formally exchange salary proposals with arbitration-eligible players who remain unsigned for 2021.

For Woodruff, who is eligible for arbitration for the first time as a “Super Two” player, it is an introduction to the business side of baseball. For Hader, it is familiar territory, since he was eligible as a Super Two last year and saw his case go all the way to a hearing.

Here’s a look at each player:

Non-prorated 2020 salary: $4.1 million
Outlook: Hader and Brewers manager Craig Counsell each made it clear that they were disillusioned by the process after Hader lost his hearing last year, but it didn’t impact the left-hander’s performance. Hader set an all-time record for the most hitless appearances to begin a season (12) and finished with another sub-1.00 WHIP (0.95). This will be his second of four turns through the arbitration process.

Non-prorated 2020 salary: $633,100
Outlook: Eligible for arbitration for the first time, Woodruff is coming off another strong season in which he logged a 3.05 ERA and a career-best 0.99 WHIP. He is expected to lead the rotation again in 2021 alongside another homegrown Brewers starter, Corbin Burnes.

A reminder of the rules of arbitration is in order.

How they qualify
Typically, players are arbitration-eligible for three years, but not until they have logged three years of MLB service. Like many realms of baseball’s Collective Bargaining Agreement, there is an exception. A select group of players -- those in the top 22 percent of service time between two and three years, qualify for a fourth year of arbitration as a Super Two. Hader barely made the cut last year. Woodruff, with two years and 161 days of service, qualified this year.

Qualifying for arbitration is a big deal for a player. During his pre-arbitration years, a player is essentially paid whatever his team wants to pay, provided it meets the MLB minimum ($570,500 in 2021). Many teams, including the Brewers, reward so-called “zero to three” players with salaries slightly better than the minimum using a mathematical formula based on performance. Often, the player simply accepts the team’s offer and signs. Sometimes, the player and his representatives opt to make a statement by declining to accept. In those instances, the team “renews” the player’s contract at a salary of its choosing (but within the rules). That’s what happened to Hader two years ago in his final pre-arbitration season.

How arbitration works
After a player qualifies for arbitration, his salary jumps to a figure relative to other players of similar accomplishment and service in previous years. That is why websites like Cot’s Baseball Contracts are able to look at comparable players and estimate salaries of those eligible, sometimes with great accuracy. While only an estimate, Cot’s projects Hader to earn about $6 million for next season, and Woodruff $3.5 million.

Teams and player representatives gather information and negotiate. Usually, they reach a settlement. The Brewers last month agreed to one-year deals with four eligible players: Orlando Arcia, Omar Narváez, Manny Piña and Daniel Vogelbach. But If the sides remain at odds by a certain date in January -- this year’s deadline is noon CT on Friday -- each side formally files a salary proposal that it is willing to defend at a hearing scheduled for February. If the process goes all the way to a hearing room, representatives for each side present to a three-member panel of judges while the player himself watches his own team argue his weaknesses. After deliberation, that panel chooses one salary or the other, with no compromise.

It’s the period between Friday’s exchange deadline and those hearings in February when things get particularly complicated. Some clubs continue to negotiate, often striking an agreement at or near the midpoint of figures to avoid the unpleasantries of a hearing. The Brewers did so for years, sometimes settling on the literal doorstep of a hearing. But some MLB officials believed that practice led to player representatives filing unreasonably high figures in order to artificially inflate salaries, so more and more teams began to adopt a “file and trial” approach, whereby negotiations cease after the exchange of figures, and the case goes straight to a hearing.

The Brewers have never publicly disclosed their precise policy under president of baseball operations David Stearns, but until last year it was believed they were a “file and trial” team. In 2016, the team took right-hander Chase Anderson to a hearing and won. That was the only hearing during Stearns’ tenure until last year, when the team went to a hearing against Hader and won again. But 2020 also brought an exception. The Brewers and left-hander Brent Suter reached a settlement after exchanging figures and before their scheduled hearing. It was a two-year deal.

Will Hader or Woodruff reach similar compromises? Or will they continue on a path toward a hearing? Friday will provide some additional information.