MLB Agrees to New Collective Bargaining Agreement

By Andrew Lombardo,
Sports Business Writer
Last week, Major League Baseball took a big step forwarding by agreeing to a new collective bargaining agreement with the MLBPA.  The deal was made just hours before the December 1st deadline, after weeks of negotiations.  The deal will allow the league to avoid its first lockout since the 1994 strike and will prevent any work stoppage for at least the next five years, until 2022.  The agreement featured multiple noticeable changes to the old CBA.

One of the biggest complaints in recent years has been the amount of rest players receive.  Under the new CBA, players will receive four extra off days during the regular season, going from 18 to 22 total off days.  The disabled list has also been modified from 15 days to ten.  This will allow players with minor injuries to rest for a short period of time and be able to come back without missing an entire two weeks of baseball.

Many of the new details surround team’s revenue and payroll.  There will be less teams that qualify for the revenue sharing pool.  The most noticeable would be the Oakland A’s, who will be phased out of revenue sharing in the next four years.  Although they have a small market payroll, stadium, and identity, it is important to remember the size of the Bay Area market that they play in.  The luxury tax threshold has also gone up with the new agreement.  However, penalties for exceeding the threshold have become harsher because of that.

The threshold will start at $195 million in 2017 and will rise to $210 million by 2021.  If a club exceeds the threshold, they will have to pay a 20 percent tax their first time, 30 percent the second time, and a whopping 50 percent the third time.  The rule is sure to keep big money clubs like the Los Angeles Dodgers, Boston Red Sox, and New York Yankees from signing whomever they want without facing any opposition from teams that are not as rich.

In what was arguably the biggest part of the negotiation, the league and union agreed to a salary cap for signing international free agents, starting next year at $4.75 million.  Small market teams will still receive some extra money depending on the year.  Teams will also be allowed to trade their cap space and trade for up to 75 percent of what theirs is.
Two small changes happen to be two of the most noticeable.  Starting next season, the winner of the All Star Game will no longer dictate home field advantage in the World Series, something that had been criticized in past seasons.  There is also a ban on smokeless tobacco, however, current players are grandfathered in.

While the small changes in the new agreement are likely permanent, the international free agent signing process and revenue sharing rules are likely to change again in the next collective bargaining agreement. Regardless, it is nice to know that there will be no lockout and the league can shift its focus to other issues.

A version of this article appeared in the Tuesday, December 13th print edition.

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