It’s late January, many MLB stadiums are covered in snow, and Opening Day is still two months away. Yet the best pitcher on the planet is actively trying to make history.
Back-to-back American League Cy Young Award winner Tarik Skubal is currently embroiled in a fascinating contract dispute with his employer, the Detroit Tigers. The 29-year-old pitcher wants $32 million. The team would rather pay him $19 million. While Skubal’s true open market value is closer to or possibly even greater than previous figures, MLB’s salary level ahead of free agency limits his earning potential and complicates the conversation.
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When Skubal becomes a free agent at the end of 2026, he will receive a staggering amount of money. He is the 12th pitcher in MLB history to win the Cy Young Award in consecutive seasons. Since the start of 2024, Skubal’s 2.30 ERA is a third lower than the next-lowest qualifying mark (Zach Wheeler’s 2.63). Only two other players (Christopher Sanchez and Hunter Brown) scored even lower than 3.00. During that span, Skubal had the second-highest strikeout rate (31.2%) and the third-lowest walk rate (4.5%) among qualified starters. No matter how you crunch the numbers, his greatness is indisputable.
But in the chaotic world of MLB arbitration, arguments do happen.
To understand why Skubal’s situation is so noteworthy, we must first understand the complex world of “arbitrage.” This is an oversimplified overview.
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When a player steps onto the diamond to make his MLB debut, he simultaneously starts a clock that governs his delivery. A player is under team control for six or seven seasons, depending on when he debuts during the season. In their first three seasons, major league players have finished at or near the bottom of the league. There are many ways they can increase their revenue, but let’s not get bogged down.
Players become eligible for salary arbitration in their fourth, fifth and sixth years in the majors, a process that approximately 150 players undergo each winter. In arbitration, agents negotiate salaries on behalf of players leading up to the early January deadline. At that point, most players will agree to a deal with the club. For the few who didn’t attend the hearing, players and teams submitted salary data to the league office. Afterwards, the parties can continue to discuss the terms. However, some organizations maintain a policy called “file and trial,” and well, you’re probably smart enough to figure that out.
The arbitration hearing itself, usually held in late January or early February, is a strange, outdated ritual of corporate drama. In a nondescript hotel conference center or rented boardroom, representatives from both sides present their cases before a three-person panel of independent arbitrators. The three listen to arguments from both sides and decide whether the player is worth a dollar above the financial midpoint or a dollar below the financial midpoint. Result: The player receives the amount proposed by him or the amount proposed by the team. There is no middle ground, no divisive differences.
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That means, unless Skubal and the Tigers find common ground before the hearing, the ace’s 2026 contract will be $19 million or $32 million. To be clear, both amounts are a living wage. No matter what, Skubal can splurge on guacamole on his taco bowl. But the difference is striking.
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It is widely believed in the industry that Skubal and the Tigers will not reach a settlement before the hearing. Detroit is a file-and-trial team, although they made an exception last winter with pitcher Casey Mize. Then again, in that case, a $25,000 financial gap was nothing compared to Skubal’s situation.
The $13 million shortfall in his case is the largest in arbitration history and is almost certainly irreversible. Skubal and his team are simply arguing from a different ideological paradigm. Several phone calls between Tigers president of baseball operations Scott Harris and Skubal’s agent, Scott Boras, couldn’t sort out that reality.
Often, the final decision relies entirely on comparisons during the arbitration process, with judges comparing the player in question to players of similar caliber, skill and tenure from previous seasons. However, a rarely used provision in the collective bargaining agreement that allows players with “exceptional accomplishments” to compare themselves to all players (not just previously arbitration-eligible players) may have encouraged Skubal and Boras to submit such large numbers. It’s a huge ask, but Skubal’s back-to-back Cy Youngs certainly qualifies as a “special achievement.”
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Skubal’s aggressive filing makes the case a tough one, as the $32 million salary would break Juan Soto’s record for the highest salary for an arbitration-eligible player ($31 million). The current record for third-year pitcher salary is $19.75 million, which coincidentally the Tigers awarded to David Price in 2015. Factoring in inflation and Skubal’s stellar track record, the $19 million Detroit paid in this bubble looks like a huge underpayment.
Crucially, arbitration cases are based on a player’s salary from the previous year. Skubal made $10 million last season. The jump to $32 million would undoubtedly be the largest annual increase for a starting player in arbitration history. The record is currently held by Jacob deGrom, who saw his bonus increase from $7.4 million to $17 million in his final year of arbitration after winning the 2018 Cy Young Award. From this perspective, an arbitrator siding with Skubal would represent a dramatic break with precedent.
If the Tigers had a few million dollars more budget, or Skubal had a few million dollars less, picking a winner might have been easier. Apparently, this is not the case. The result was a mystery box worth $13 million.
Will this situation have a noticeable impact on Skubal’s future in the Motor City? It’s possible, but unlikely. Sometimes arbitration hearings can exacerbate discord between players and teams. Corbin Burns and the Brewers are a famous example. That’s understandable, considering the time, resources and energy teams are spending on debating players’ deficiencies.
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But more often than not, money solves everything. Star first baseman Vladimir Guerrero Jr. and the Toronto Blue Jays held a hearing before the start of the 2024 season. The following year, Guerrero signed a 14-year, $500 million contract with the Toronto Raptors.
Barring an injury, Skubal will become a free agent next winter and sign with whichever team offers him the most money. The outcome of his arbitration hearing will not change that. But that doesn’t mean Skubal’s game against Detroit only matters to Skubal and Detroit.
A win for Skubal could significantly change the first-line starter’s future arbitration case. For example, 2025 NL Cy Young winner Paul Skenes will enter his first year as a carry next winter. How the judge rules on Skubal’s situation will certainly affect the outcome of the Skenes arbitration. Both players are also members of the MLB Players Association’s executive subcommittee, a group of eight players active in labor negotiations. Because MLB’s labor relations department plays a major role in helping teams make decisions before arbitration, one could view Skubal’s standoff with Detroit as part of a larger feud between the league and the union.
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But the most obvious outcome of Skubal’s upcoming hearing is how it will put Detroit’s offseason at a complete standstill. Multiple Yahoo Sports sources believe the Tigers are waiting to find out whether Skubal will make $19 million or $32 million this year before deciding whether to make additional spending this winter. This dynamic helps explain why Detroit, which was one win away from the AL Championship Game last fall, had such a lackluster offseason.
The Tigers extended a qualifying offer (one year, $22.025 million) to second baseman Gleyber Torres, which Torres accepted. Harris & Company also re-signed reliever Kyle Finnegan to a two-year contract and signed legendary closer Kenley Jansen to one-year deals as well as Drew Anderson, a former Phillies rookie who had a stellar year in Korea. That’s an unsatisfying result even in an AL Central that’s not actively trading.
With a handful of free agents still available — starters Zach Gallen and Lucas Giolito, third baseman Eugenio Suarez — it would be a significant upgrade for Detroit in what will likely be Skubal’s final year in town. Unfortunately, that moment has likely passed as many impactful free agents have signed with new teams.
Detroit’s organization remains healthy. The Tigers appear to be out of the division before a late-summer collapse in 2025, with a quality group of young position players, a dynamite bullpen and one of the best farm systems in baseball.
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Despite the drama surrounding Skubal’s future, he remains on the roster. Regardless of the outcome of his arbitration case, regardless of the price tag attached to his name, the Tigers should be more aggressive in building an impeccable roster around their generational talent. Despite Skubal’s many signature appearances, Detroit has been eliminated in October the past two seasons because the roster just wasn’t good enough.
Either way, finding ways to upgrade the unit while Skubal is around is a move worth taking.
