A player is deemed to have reached “one year” of Major League service time upon accruing 172 days in a given year. Once players reach three years of service time, they become eligible for arbitration, assuming they haven’t yet signed a contract for the upcoming season. If the club and an arbitration-eligible player have not agreed on a salary by a deadline (typically in mid-January), the club and player must exchange salary figures for the upcoming season. After the figures are exchanged, a hearing is scheduled (typically in February). Teams and players are still free to continue negotiating on a contract up until the hearing date. If no one-year or multi-year settlement can be reached by the hearing date, the case is brought before a panel of arbitrators. After hearing arguments from both sides, the panel selects either the player- or team-submitted salary figure (but not one in between) as the player’s salary for the upcoming season. The week prior to the exchange of arbitration figures is when the vast majority of arbitration cases are avoided, either by agreeing to a one- or multi-year contract.
