Late last week, the San Francisco Giants placed third baseman JD Davis on waivers, after adding star Matt Chapman to play the position earlier in the offseason.

That the Giants made the move wasn't a surprise, but what was shocking, was how they went about it, per Dan Freedman of Forbes.

After the 2023 season, Davis was eligible for arbitration. The Giants have reportedly recently begun to adhere to a policy of “file-and-trial,” which means that the team stops negotiating with the player at the deadline for exchanging salary figures to be presented at the arbitration hearing.

The Giants submitted to the arbitrator the amount of $6.55 million, and Davis asked for $6.9 million, a difference of $350,000. According to Davis’ agent, Matt Hannaford, the Giants last formal offer to Davis was for slightly less than $6.4 million.

Davis said last month that he would have happily accepted the Giants’ filing figure of $6.55 million prior to the hearing, but the Giants were not willing to reopen negotiations, citing the “file-and-trial” policy.

It turns out that there is a loophole in the new MLB collective bargaining agreement that states that contracts settled in an arbitration hearing are not guaranteed. Becauce of this, the Giants can – and did – cut Davis with little financial implication.

The Giants released Davis 17 days prior to Opening Day, which means they only owe him 30 days of termination pay, amounting to $1.1 million. If they had cut him three days later, meaning less than 15 days prior to Opening Day, he would have been owed 45 days of termination pay, or $1.66 million.

There is still a chance that Davis will sign with another MLB team. The Milwaukee Brewers, Seattle Mariners, and Toronto Blue Jays – Chapman's old team – all have holes at third base – but Davis will have no leverage in any negotiations this close to Opening Day.