Baseball Salary Cap & Arbitration

Baseball Salary and Arbitration Analytics

Unlike other major sports, MLB has no salary cap but uses arbitration and luxury tax systems. Understanding player valuation is crucial for team building.

MLB Salary Structure

• Pre-Arb (Years 1-3): Team-controlled, near league minimum
• Arbitration (Years 4-6): Salary determined by comparable players
• Free Agency (Year 7+): Market-driven salaries

Arbitration Projections

Key factors in arbitration salary projection:

• Service time and previous salary
• Performance metrics (WAR, traditional stats)
• Position and comparable players
• League-wide trends

Key Takeaways

• Pre-arb players provide massive surplus value
• Arbitration raises track performance closely
• Free agent contracts often overvalue peak performance
• Team-controlled years are critical assets