In 1974 Major League Baseball (MLB) introduced what is now known as “baseball arbitration.” If an eligible player’s representative and the club ownership cannot reach a compensation agreement through negotiation, each party enters a final submission and during a formal hearing each side—player and management—presents its case and then the designated panel of arbitrators chooses one of the salary bids with no other result being allowed.
This method has become increasingly popular even beyond the sport of baseball. For example, many real estate lawyers now advise clients to utilize “baseball arbitration” for resolving disputes. The range of such disputes includes such things as market rent re-settings for commercial space lease renewal periods; renewal rents for ground leases; disputes between buyers and sellers in the case of purchase options specifying market value at the point of the purchase option’s exercise, and brokerage commission disputes.
