Major League Baseball and the MLB Players Association announced their accord on a new Collective Bargaining Agreement today, ensuring labor peace between the sides through 2016. The deal guarantees 21 consecutive years without a work stoppage since the 1994 strike, the longest uninterrupted stretch since the formation of the modern Players Association in 1966.
Baseball’s sustained labor peace comes at a moment when the NBA is mired in a potentially season-killing lockout, the NFL recently endured a messy work stoppage and the NHL is still rebounding from the canceled 2004-05 season. The unprecedented harmony, not coincidentally, has followed unprecedented financial growth. Baseball’s revenues, even in a spiraling economy, have risen each year since 2003, surging from less than $4 billion in 2003 to more than $7 billion this year.
Baseball’s owners and players have historically held more animosity in regard to labor issues than any other sport. But their shared prosperity under Commissioner Bud Selig and the league’s hugely lucrative Advanced Media arm has motivated each side to work together.
The sides have reached only a memorandum of understanding and each side must still ratify the deal. But all considerable hurdles have been cleared, and baseball has reversed the history of animus between players and owners.
“I believe this five-year agreement will continue the remarkable popularity and surge that baseball has been on,” Selig said today in a news conference, with MLBPA director Michael Weiner sitting directly to his left. “Nobody back in ’70s, ’80 or early ’90s would ever have believed we would have 21 years of labor peace. …This is really a proud day for us.”
The new deal contains numerous changes, some noticeable primarily behind the scenes and some that will change the face of the sport, some radical and some subtle. Many changes, particularly in regard to the draft and the acquisition of international players, are geared toward assisting small market and/or underperforming teams – Selig described competitive balance as his “bell weather” during the bargaining sessions.
>>> The deal hinged largely on an agreement between the sides on compensation for draft choices. MLB will institute a luxury tax on teams that cross a specific threshold while spending on signing bonuses in the draft. Teams may still hand out massive bonuses, like the ones the Nationals gave to Bryce Harper, Stephen Strasburg, Anthony Rendon, Matt Purke, A.J. Cole and many others. But they will now be penalized, severely.
If teams spend 5 percent over their allotted “slot” amount, they must pay a 75 percent tax. Teams that go over slot by 5 to 10 percent must pay a 75 percent tax and lose a first-round pick. Teams that go over slot by 10 to 15 percent must pay a 100 percent tax and lose a first- and second-round pick. Teams that spend more than slot by 15 percent or more must pay a 100 percent tax and lose two first-round picks.
In effect, owners will pay less on the draft, and baseball will likely get its wish that the best players are taken in order and help competitive balance. Also, teams may no longer sign drafted players to major league contracts, like the contracts the Nationals gave Strasburg, Harper, Rendon and Purke.
Across baseball, many people worried the new rules will prevent baseball from attracting the best athletes in the country, that they will play college football or college basketball without a significant payday from baseball. It also hurts that college baseball teams do not provide full scholarships.
“I have no concerns about that,” Selig said. “I don’t believe that that’s a possibility. I believe the sport is on an upgrade at every level.”
Weiner pointed that the draft spending limits are only on aggregate spending, not individual spending. His point is that the very best players will still receive lucrative deals.
>>> The sport also made significant changes to how teams can acquire international players. Teams will have a pool of money to spend on international, with teams in smaller markets and that finish with the worst records receiving bigger pools. Starting in 2014, teams will be able to trade as much as half of the money in their international pools.
>>> The league will implement blood testing for Human Growth Hormone beginning this spring training, making baseball the first major U.S. professional sport to use the test.
“It wasn’t that difficult” to pass, Weiner said. “We started to engage with the office of the commissioner in the spring of 2010 about HGH testing.”
>>> Starting in 2013, the Houston Astros will move from the National League Central to the American League West, leaving 15 teams in each league and instituting perpetual interleague play.
>>> An additional wild card team will be added to each league, and Selig is “more than very hopeful” the two new playoff teams will be introduced for the 2012 season. The two wild cards will now have a one-game playoff between them to determine which team will join the three division winners. While the rules allow for a more mediocre team in the playoffs, it provides more incentive and reward for teams to win their division.
>>> The minimum major league salary will rise from $414,000 to $480,000 this year, an increase of 16 percent. The minimum salary will vault to $500,000 before the CBA expires.
>>> The sides made a small but significant semantic change to the beginning of the agreement. Previously, the CBA stated the agreement covered all players regardless of “race, color, religion or national origin.” The phrase “sexual orientation” will be added to those qualifiers in the new agreement.