Blue Jays’ arbitration case with Donaldson could set record

Josh Donaldson of the Toronto Blue Jays gears up to swing. (Tom Szczerbowski/Getty)

Not only did Josh Donaldson’s MVP season help the Toronto Blue Jays end MLB’s longest playoff drought, it set the third baseman up for a potentially record-setting raise.

We’re used to seeing massive jumps in salary in free agency, but Donaldson won’t hit the open market until after the 2018 season. Instead, his raise will be determined through salary arbitration, and though the jump may be historic, he’ll still be paid well below market value.

Arbitration Explained: Offseason calendar & glossary

The starting point for any discussions between the Blue Jays and their third baseman will be the $4.3-million salary he earned in 2015. The Blue Jays saved money for years to come by beating Donaldson in last year’s arbitration case, but they probably don’t want to make a habit of taking him to a hearing.

To determine what Donaldson might earn, Sportsnet reached out to six people experienced in arbitration. They agree that Donaldson has a case for a record-setting raise for second-time eligible position players. The question becomes: how high will his salary go?

Establishing Comparables

“When a guy has a season like Donaldson did, you can pretty much throw out the traditional comps,” one player agent said.

Ideally teams and players use comparables from the same service class, meaning second-time eligible players are compared against fellow second-time eligibles. The more recent the comps the better, but there’s simply no one else on Donaldson’s level in the current class. Dated comps will be in play.

Even then, there isn’t much selection. Josh Hamilton makes some sense, since he went to arbitration for the second time right after winning the 2010 AL MVP. Based on the filing numbers, Hamilton was headed for a raise approaching $7 million.

Player Year Time Eligible G PA HR RBI Awards Raise
Hamilton 2010 2 133 571 32 100 AS, SS, MVP-1st 6.835*
Donaldson 2015 2 158 711 41 123 AS, SS, MVP-1st TBD

*Filing number midpoint. Case never went to hearing.

But those experienced in the arbitration process say it’d be dangerous for either side to rely much on Hamilton’s case. He signed a two-year contract with the Rangers, and multi-year deals don’t hold much sway in single-year arbitration cases.

Similarly, first-time eligible players don’t make useful comps, even if they had MVPs. Buster Posey and Ryan Howard, two players who obtained massive raises in arbitration, did so their first time through the system.

That brings us back to second-time eligible players, and there are only a few who obtained raises of at least $5 million the second time through the arbitration process: Derek Jeter, Jacoby Ellsbury and Chris Davis. Throw out Jeter, since we’re not going back in time 16 years. Ellsbury’s raise of $5.65 million should represent a floor of sorts considering Donaldson’s power numbers were far better, his career numbers are better and he won the MVP.

Player Year Time Eligible G PA HR RBI Awards Raise
Ellsbury 2011 2 158 732 32 105 AS, SS, MVP-2nd 5.65
Donaldson 2015 2 158 711 41 123 AS, SS, MVP-1st TBD

That brings us to Davis, who holds the record for raises among second-time eligible players and who will likely “carry the day” in Donaldson’s case, according to one expert.

Davis and Donaldson

Comparing platform years, Davis has the clear edge in power numbers. But Donaldson won the MVP, a “trump card” in the words of one agent. And as another agent remarked, many of Donaldson’s career numbers are better than Davis’s numbers at the same stage in his career. There’s your case that Donaldson should get a raise in excess of the $7.05 million Davis obtained.

Player Year Time Eligible G PA HR RBI Awards Raise
Davis 2013 2 160 673 53 138 AS, SS, MVP-3rd 7.05
Donaldson 2015 2 158 711 41 123 AS, SS, MVP-1st TBD

Some analysts warn against disregarding the gap of 12 home runs. They’re inclined to give Davis extra credit since 50-homer seasons are so rare in today’s game. Donaldson’s 41 homers are impressive but not as exceptional.

That said, Donaldson has some advantages of his own over Davis. For starters, he plays a tougher position. Even if defence has a limited impact on arbitration hearings, the positional edge can’t hurt. There’s also the fact that he has much more postseason experience, including a strong showing in 2015. As a bonus, he’s never been on the DL.

Then there’s the trump card: While Davis finished third in MVP voting, Donaldson’s first-place finish would impress a panel of arbitrators.

“It’s something that both sides know will play well in a hearing room, as opposed to only being able to say that a player led his league in WAR,” one analyst noted.

Filing numbers

The first step toward avoiding a hearing comes January 15, when teams and players exchange filing numbers, the formal bids that frame negotiations and set up potential hearings.

While Ellsbury’s example shows that Donaldson should be above $10 million, one observer suggested the club might not be inclined to offer much more.

Donaldson’s representatives will look for ways to use the MVP to vault well beyond Davis, but arbitrators don’t like veering too far from precedent. It’s extremely rare to see players set records by more than $1 million, so it may be tough to surpass Davis’s $7.05 million raise by all that much. Still, if MVP Sports wants to get really aggressive, they can test arbitrators’ willingness to set precedent by filing above the $12 million projected by MLB Trade Rumors.

Bottom line: one agent says a raise of $7 or $7.5 million sounds about right. Another says Donaldson will match and exceed Davis’s raise. Based on those assessments, a 2016 salary between $11.35 million and $12 million sounds reasonable.

Multi-year possibility

Hamilton’s case shows that multi-year deals are one way of avoiding the hassle and potential messiness of a hearing. And since Donaldson’s a Super Two player with three arbitration years remaining, the Blue Jays aren’t limited to one-year talks.

Hamilton obtained two years and $22.5 million for his second and third arbitration seasons, a possible starting point for Donaldson. Agents suggest the Blue Jays would have to pay more than the Rangers did considering inflation and Donaldson’s superior platform season. Perhaps a two-year deal in the $25-million range would be palatable for both sides.

The bigger picture

Nothing happens in isolation when it comes to arbitration. Every case impacts future salaries from middle relievers on up to MVPs. As a result, the MLBPA and MLB’s Labor Relations Department monitor the process closely, shaping the results by helping individual players and teams see the bigger picture.

When there’s a lot at stake, both sides have added incentive to push for an ideal outcome. While fourth outfielders argue over a couple hundred thousand, Donaldson has millions at stake and so do his successors. Should Nolan Arenado win an MVP next year, his top comp will immediately be Josh Donaldson, creating further incentive for each side.

In other words, if you’re curious about Donaldson’s case, you’re not alone.

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