The Detroit Tigers have offered star outfielder J.D. Martinez a salary of $6 million, double what he earned for the 2015 season. Martinez submitted an arbitration request for an $8 million salary, according to Jon Heyman on Twitter. Matt Swartz of MLB Trade Rumors, the respected authority on arbitration projections, had forecasted a salary of $7.8 millionfor Martinez. The two sides now have a few weeks to see if they can settle on an amount to avoid an arbitration hearing, which would take place in February if no agreement is reached.
The Tigers also came to terms with three other players to avoid arbitration hearings. The club signed shortstop Jose Iglesias to a one-year contract worth $2.1 million plus incentives. Earlier the club came to terms with relief pitcher Justin Wilson on a $1.525 million contract, and with utility infielder Andrew Romine on a $900,000 deal. Each of those three players is eligible for arbitration for the first time.
The Tigers have a recent history of settling arbitration cases without the necessity of a hearing. During the 12 seasons with Dave Dombrowski as president/general manager, the team never had to go to a hearing with a player. Part of the reason is that the club often paid players a bit above their projected salaries in order to settle. The Tigers have indicated a desire to negotiate a longer term extension with Martinez.
That the two sides did not immediately agree on terms is not a surprise. Martinez has had the kind of seasons the past two years that are at the upper level of performance for a player of his experience, and those players tend to push the limits of arbitration payouts. A gap of $2 million is still more than one might have expected, although not so wide that it can not be closed. Incentives based on health and awards can go a long way toward closing such a gap.
It is possible that Martinez will not be willing to go far below the projected figure, as that tends to create an expectation, or that the club will be willing to move so much closer to the player's demands, rather than closer to the midpoint. If the two sides do not agree, a hearing would be scheduled at some point within the first three weeks of February with a panel of three arbitrators choosing one figure or the other for a one-year contract.
Martinez led the Tigers with 38 home runs, 102 RBI, and made the All-Star team in his fourth season in the major leagues. He won a Silver Slugger award and was nominated for a Gold Glove. His 5.0 WAR (per Fangraphs) ranked eighth in the American League among all position players and fourth among outfielders. All of these things are factors that can be considered by an arbitration panel, and are factors that will push his salary toward the upper limits of the range for second year arbitration eligible outfielders.
The Tigers are in a position where any more money spent on salaries will be subjected to a luxury tax of 17 percent for the 2016 season, based on their current payroll, including benefits. If they were to come to terms on a multi year contract with Martinez that began with the 2016 season, the average annual value of his contract would be factored into the salary calculation for luxury tax purposes.
For that reason, it may be financially prudent for the club to first settle on a contract for 2016, and then work out an extension for future seasons, which are certain to be for higher salary as he logs more service time and approaches free agency after the 2017 season. The gap between the two sides is sure to lead to a negotiation, and a long term extension is almost sure to be discussed, assuming both sides are genuinely interested in an extension.