How does arbitration work? Does it force teams to overpay for players?

The arbitration procedure was added to a previous CBA at the request of the owners; it has been modified in the new CBA. Arbitrators are members of the American Arbitration Association. Any member of the AAA may volunteer to be in the "pool" of arbitrators eligible to hear baseball cases.

Lists of volunteers are examined by representatives of the players and the owners; an arbitrator must be approved by both groups to be in the pool. (This discourages arbitrators from appearing biased for either side; such arbitrators will be dropped from the pool.) The arbitrator for an individual case is chosen at random from the pool. Under the new CBA, cases will be heard by three-person panels, with one impartial arbitrator as above, and one arbitrator chosen by each side; this will be phased in over the first three years.

Arbitration can be offered only by the team; a player cannot force his team to offer arbitration, although he can refuse an offer of arbitration if he is eligible for free ... more.

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