Arbitration is a common tool used by professional athletes and sports teams when it comes to negotiating salary and other contract issues. Players’ unions have a system in place that allows for arbitration and free agent players can choose to pursue arbitration in an effort to reach an agreement with their team.
The majority of players are able to settle and sign a contract with their current team before arbitration must be pursued, but arbitration provides an opportunity to exercise his rights. It also provides a guarantee that the player and the team will reach a deal during the off-season, so neither is forced to worry about contract issues during the season. There are instances in which contract negotiations have purportedly affected play.
This year the National Hockey League’s player’s union announced that 23 restricted free agents had filed for salary arbitration with their current teams. The list included some of the most well-known names in the game currently, including Washington Capitals’ Braden Holtby, Detroit Red Wings’ Gustav Nyquist, and Arizona Coyotes Mikkel Boedker.
When contract settlements are not reached by the arbitration date, the team and the player present their case to a third-party neutral arbitrator. The majority of players have agents that represent them during arbitration. The arbitrator determines a fair salary for the player and will also determine resolution to any other disputes within the contract terms. Often, professional sports players and their teams include non-monetary factors in their contracts, including access to tickets, incentive bonuses, travel arrangements, and approved off-field or off-court activities.