J.D. Davis was released and lost most of his $6.9 million salary after the Giants exercised a loophole

Major League Baseball players scored what they considered a long-awaited victory when the latest collective bargaining agreement was ratified before the 2022 season. For the first time, arbitration-eligible players will be guaranteed one-year contracts — which includes most players with more than 2 1/2 and less than six Years of service time – fully.

But there was a loophole. It didn't take long for the team to take advantage of him.

The Giants were that team. Third baseman J.D. Davis was the party involved.

In a dramatic reversal of fortune, the Giants placed Davis on unconditional waivers on Monday, severing ties with the player who earned a $6.9 million salary when he beat them out in an arbitration hearing in February. Because the clause in the CBA specifically does not guarantee arbitration pay reached through a hearing, the Giants owe Davis only 30 days of severance pay, which amounts to just over $1.1 million.

It's an unusual decision that will be viewed by many in the industry as callous and cold. Others will view it as a practical decision that is within the teams' rights under the CBA. What's not in dispute is that Davis, who played in 144 games for the team last season but was made redundant after signing third baseman Matt Chapman, was thrust into an unsafe position two weeks before Opening Day: without a team and suddenly only 16%. Of the salary an independent committee has just decided he deserves.

Giants president of baseball operations Farhan Zaidi, appearing on a hastily arranged Zoom call with reporters Monday, said the team tried to trade Davis without any traction. The Giants placed Davis on outright waivers last weekend in hopes another club would claim him and speed up the process.

“Once we received the news that no one had asked for explicit concessions, we decided to take this step,” Al-Zaidi said. “It just boils down to the role and the other guys ahead of us on JD as far as bats go. If we had a 28- or 30-man roster, we'd keep everybody. But given the reality of the limitations on our roster, that was just the move we decided to make.”

Al-Zaidi continued: “Everything we did in this case fell within our rights as a team.” “And that's recognised. It's cut and dried at CBA.”

JD Davis was made redundant on the roster when the Giants signed Matt Chapman. (Ross D. Franklin/Associated Press)

At issue will be how actively the Giants exploit these rules, and how much of it may be intentional.

The Giants recently defaulted to what has become an industry-wide “file and trial” policy between teams where all negotiations stop after a deadline for clubs and players to exchange salary figures to be presented at the hearing. Al-Zaidi said that this policy aims to be a deterrent to negotiations that reach the hearing stage. Davis said last month that he would have gladly accepted the Giants' $6.55 million deposit before the hearing. But the team was not willing to reopen negotiations after the exchange.

Al-Zaidi said Monday that the Giants “negotiate all of our arbitration issues in good faith” and that Davis could have accepted the club's offer before exchanging numbers.

Davis' agent, Matt Hannaford, disputed that characterization. Hannaford said the Giants made one offer for Davis that general manager Pete Boutella sent in a text message that arrived one hour before the application deadline. Hannaford said the club's offer was “hundreds of thousands” less than what the team offered.

“In my 22 years in business, I have never seen a club in arbitration submit their own bid and submit less than an hour before the trade deadline that ended up being hundreds of thousands of dollars short of their registration number,” Hannaford said. “The way the Giants negotiated gave JD no choice but to go to the hearing, which he did, and we won.”

Industry sources indicated that Davis, now an unrestricted free agent, was unlikely to have grounds to file a complaint.

“It is unfortunate that the club handled things this way, but I am confident in JD and the value he will bring to his next team,” Hannaford said. “I know he'll end up better off when it's all said and done.”

Al-Zaidi, who was asked to confirm Hannaford's account, said the Giants officially offered Davis “just under $6.4 million, which is consistent with the raise we believe is one of the most relevant to the case.” Al-Zaidi said the club did not consider it the best and final offer, but Davis' representatives did not respond until 10 minutes before the deadline and did not provide what club officials considered an official response, saying only that the number “should start with 7.”

“They then offered $6.9 (million), and several hours after the deadline, they called to reach a settlement,” Al-Zaidi said. “We said that as a matter of fairness in our other negotiations and to maintain the credibility of our policy going forward, we were not in a position to negotiate once the swap deadline had passed.”

Whether or not the Giants head to that specific outcome where Davis' salary is not guaranteed, they have effectively bought themselves an inexpensive insurance policy in case they are unable to reach an agreement with Chapman, a four-time Gold Glove third baseman and Scott Boras' client who played For manager Bob Melvin in Auckland. It may have been a poignant story when the Giants signed Chapman on March 3 to a three-year, $54 million contract that included a pair of opt-outs, given that he and Davis were teammates at Cal State Fullerton. But with Jorge Soler and Wilmer Flores taking all the right-handed bats at first base and designated hitter, it was clear that Davis' days on the roster were numbered after Chapman joined the team.

Al-Zaidi did not apologize for Monday's announcement but acknowledged that the protracted negotiations with Chapman had an unfortunate impact on the club's ability to find Davies' salary.

“If the wheels for this had been put in place earlier this season, it would have been different, but it wasn’t, and that’s just the reality,” Al-Zaidi said. “It's hard (for teams) to take on a big chunk of payroll when you're that far away. In that sense, it's not a huge surprise. We've seen that with some free agent deals over the last few weeks. It's a different market now than it was in Vacation period.”

If the Giants had released Davis within 15 days of the season opener, they would have been on the hook for 45 days of severance pay, or $1.66 million. By releasing him after 17 days, they saved nearly $500,000 more.

It is rare, but not unprecedented, for teams to reduce the number of arbitration-eligible players before Opening Day. The San Diego Padres released shortstop Todd Walker in the spring of 2007, less than a month after the arbitration panel awarded him a $3.95 million salary. Walker received $971,311 in severance pay instead. Atlanta Braves left-hander James Russell and Chicago Cubs right-hander Justin Grimm are other recent examples of players who lost most of their salaries in the range of $2-3 million when their team released them in the spring. He was then-Anaheim Angels blind catcher Todd Green when they released him before Opening Day in 2000, paying $180,556 of his $650,000 salary.

By losing nearly $6 million, Davis becomes perhaps the most famous example of all time.

It's possible that if the nature of late free agency continues to evolve in the coming years, it could lead to more teams shuffling the deck in spring training and creating a roster that's poorer fit for arbitration-eligible players who may have been more firmly in the team's plans in the winter. Although Al-Zaidi asserts that the “file and prosecute” policy is intended to deter hearings, it is now clear that the teams gain a significant advantage even if they lose their case.

Even if Davis becomes the only player caught in the loophole, the Players Association will certainly seek to change that language in upcoming negotiations.

Right now, the Giants have cut nearly $6 million from their salary obligations and now stand about $13 million below the first luxury tax threshold of $237 million.

Al-Zaidi disputed the idea that the egregious nature of Davis' decision would damage the Giants' reputation among their players as well as free agents.

“I completely disagree,” Al-Zaidi said. “Talk to the players on our team about how the organization treats them, about communication with the head coach, the coaching staff and the front office,” said Zaidi, who was also on the defensive this spring in the wake of critical comments from quarterback Brandon. Crawford.

“I strongly disagree with that point. When you part with a player no matter the circumstances, it's often difficult, and it often feels personal for the player. I've been in three organizations and seen this a lot. It's just the reality of the business side of things. As an office worker Front, you can shout it from the rooftops, it's never personal, but I understand from the player's point of view it's always going to feel personal. It's their life and their profession.

“To some extent, when there is dissatisfaction or frustration or disappointment or a feeling that there is an element of abuse, my general feeling is that players have a right to express that and we will not get into that kind of thing publicly.” . At the same time, to generalize that as a statement about the organization, I would strongly disagree with that. If my word isn't good enough, talk to the players in our organization about how they feel the organization cares about them, and about the level of communication. These are things that are really important to us.”

(Top photo of Davis earlier this spring: Rick Scuteri/USA Today)