Breaking down Donaldson’s arbitration case

Player's MVP performance and Canadian dollar play into negotiations

Today the Toronto Blue Jays will go to arbitration with Josh Donaldson for the second year in a row. Donaldson, the reigning American League MVP, is seeking $11.8 million, and was offered $11.35 million by the team.

Salary arbitration hearings often incite fear of potential for bad blood between players and their organization. While this isn’t always the case, some fans, like Jack Peffany, worry.

The difference of “$450,000 isn’t an insignificant amount for Rogers, given the dollar,” Peffany said. “But would I risk ruining the relationship after last season? Probably not.”

In lieu of the upcoming hearing, here’s a look at some of the factors playing into Donaldson’s case.

Canadian dollar

At the end of the day, business is as much a part of baseball as any other pro sport. Right now, the Canadian dollar is weak, and consumers aren’t the only ones feeling the effects.

The Toronto Blue Jays are owned by Rogers Communications. As a Canadian company, all of their revenues are in Canadian dollars. Players, however, are paid in US dollars. The Jays offer of $11.35 million USD equates to just over $16.2 million Canadian and Donaldson’s request of $11.8 million to over $16.85 million.

Difference in offers

Relatively, the difference between what was offered to Donaldson and what he asked for was small — 4% to be exact. So small, in fact, that this will likely be closest case to ever go to arbitration. This small relative difference is good, because it means that the team’s assessment of Donaldson’s value was close to his own. Rather than seeing the $450,000 difference as a slap in the face, it’s really a good indicator that Donaldson and the Jays are on similar pages.

Team relations

Arbitration is a normal part of baseball. Players who have more than three, but less than six full years of service in the MLB must go to an arbitration panel if they fail to negotiate a deal with their team. Donaldson has just over three full years of service, and therefore three more years of arbitration. If his performance continues to improve, and the Jays maintain their “file and trial” policy, this probably won’t be the last time Donaldson goes to a hearing.

MVP performance

Below is a table listing the last decade’s American League and National League MVPs and their salaries the year following their awards. The average salary of the 21 players (Donaldson was omitted) worked out to be roughly $1.1 million dollars less than what the Jays are offering Donaldson.

YEAR

NAME

SALARY

2005 Albert Pujols $14,000,000
Alex Rodriguez $21,680,727
2006 Ryan Howard $900,000
Justin Morneau $4,500,000
2007 Jimmy Rollins $8,000,000
Alex Rodriguez $28,000,000
2008 Albert Pujols $14,427,326
Dustin Pedroia $1,750,000
2009 Albert Pujols $14,595,953
Joe Mauer $12,500,000
2010 Joey Votto $7,410,655
Josh Hamilton $8,750,000
2011 Ryan Braun $6,000,000
Justin Verlander $20,000,000
2012 Buster Posey $8,000,000
Miguel Cabrera $21,000,000
2013 Andrew McCutchen $7,250,000
Miguel Cabrera $22,000,000
2014 Clayton Kershaw $32,571,000
Mike Trout $6,083,000
2015 Bryce Harper $5,000,000
Josh Donaldson TBD
AVERAGE   $12,591,365

Salary is determined not only by performance, but also years of service. The players on this list who received the biggest salaries following their MVP seasons were all qualified free agents. Regardless of whether Donaldson wins his hearing this season, in three years time, it’s doubtful that he’ll think much of the $450,000 the Jays are taking him to arbitration for.