While baseball salary structures and payrolls are complicated enough to deal with, the arbitration process might well be the single most difficult portion of that process to wrap your heads around. In essence, it’s a player’s first real chance to get a raise from league minimum salary for the year, though it only comes once a team and a player come to agreement on the terms.
Or, if there’s no agreement, the two parties get to have an arbiter settle things for them, which more or less pits the two sides against one another on a rather public stage.