MLB, MLBPA Reach New Collective Bargaining Agreement

After 99 days, the MLB lockout is finally drawing to a close. The Major League Baseball Players Association has voted to approve the most recent counterproposal from ownership, setting the stage for a new collective bargaining agreement to be ratified, as first reported by Daniel Alvarez-Montes of El Extra Base. The new CBA covers the 2022-26 seasons, and the transaction freeze associated with the lockout has been lifted. The Score’s Travis Sawchik tweets that the proposal passed by a vote of 26 to 12 among the MLBPA’s 30 team union reps and eight executive subcommittee members.

Increasing pay for younger players, advancing the competitive balance (luxury) tax thresholds in a meaningful way, implementing anti-tanking measures and eliminating draft-pick compensation took center stage among the players’ must-have goals. MLB, meanwhile, sought to further expand revenues by widening the postseason field and adding advertising patches to player uniforms. The league also pushed for, and was ultimately granted, the creation of a fourth tier of luxury-tax penalization. Additionally, ownership saw to it that a handful of grievances filed by the MLBPA over the past several years would be dropped.

Among the more notable gains for the players, they’ll now see the luxury-tax threshold jump from this past season’s $210MM up to $230MM in 2022. It will rise to $244MM over the life of the agreement. Given the manner in which the competitive balance tax has begun to function as a soft salary cap among the sport’s top-spending teams, notable advancement was vital. The 9.5% jump in the first year of the new CBA marked a notable gain for the players’ side, even if it fell shy of their initial ask.

Other notable gains for the union include a newly created league-funded pool that will provide pre-arbitration players with bonuses based on performance. After much back-and-forth, the two parties settled on a sum of $50MM (just under $2MM per team) that can be divided among the sport’s top pre-arbitration stars. The exact parameters of how that will be doled out remain unclear, but it’s a notable uptick in the earning power of the game’s young stars.

Pre-arbitration players will also see a sizable increase in their base levels of pay, as the minimum salary will jump from $570,500 to $700,000. That number will grow by a measure of $80K over the agreement’s five years, pushing the league-minimum salary to $780K by the time the 2026 season rolls around.

The players also sought to clamp down on the issue of service time manipulation, and an agreement is believed to be in place that would award a full year of service to players who finish well in end-of-season Awards voting. As with the pool, the finer details have not yet come to light. On the flip side of that equation, teams now also stand to be awarded draft picks if young players on their Opening Day roster finish well in Rookie of the Year voting.

The hope among players is that such measures will bring star players up sooner, as the issue of service manipulation was seen both as a means of tamping down players’ earning potential and also a data point in a long string of anti-competitive behaviors by clubs. Essentially, teams argued that the best players in an organization should be on its Major League roster. Along those same lines, the union pushed for a draft lottery as a means of curbing the increasingly popular multi-year rebuilds that see a team effectively tank for premier draft position. While the lottery that was eventually implemented wasn’t quite as robust as the MLBPA originally proposed, it’s expected that the first six selections of the draft will now be determined in lottery fashion.

Perhaps the key victory for the league was the expansion to a 12-team playoff field — which will reportedly secure them an additional $85MM in annual television revenue from ESPN alone. The additional profits associated with any live game (gate, parking, concessions, etc.) will only add to that total. The league also succeeded in its desire to add advertising patches to player uniforms, which will generate tens of millions in revenue itself. Rates will presumably only increase during the spotlight of the postseason, making the extra games added via the expanded field all the more lucrative.

Major League Baseball secured a provisional agreement to discuss the implementation of an international draft, setting a July 25 deadline for the two parties to come to terms on a format that would go into effect in 2024. If an agreement is reached, the qualifying offer system pertaining to free agency will be eliminated. Absent an agreement on the international draft, the two sides agreed that both the qualifying offer system and the current international free-agent system will remain in place.

It seems we could soon have some rule changes on the horizon, as the league sought the implementation of several measures it believes will improve in-game action and pace of play. While the specifics and timing remain to be seen, the stage is set for measures such as a pitch clock, the banning of aggressive defensive shifts and larger bases — if not in 2022 than in 2023. The universal designated hitter, as has long been expected, will formally go into effect under this new CBA.

MLB also pushed for revenue-sharing grievances against the A’s, Pirates, Rays and Marlins to be dropped and succeeded in having Oakland reinstated as a revenue-sharing recipient. The A’s had previously been ousted from that designation in the prior CBA. A late revelation regarding their proposal was the push for the MLBPA to drop its $500MM grievance that claimed the league did not act in good faith during return-to-play negotiations in the Covid-shortened 2020 season.

Over the days and weeks to come, we’ll break out some of the finer details of the collective bargaining agreement and drill deep into the specifics of every new wrinkle. For the time being, however, the focus shifts immediately to one of player movement and the long-awaited return of the lifeblood of MLBTR: transactions! Owners are reportedly expected to ratify the new agreement on a 6pm ET call, and free-agent and trade activity can begin immediately once that occurs.

Prior to a lockout they all saw coming, teams scrambled to scoop up the offseason’s top free agents before the previous CBA expired. Thirty of MLB’s top 50 free agents were signed in an unprecedented November spending spree, with nine-figure pacts going to Corey Seager, Marcus Semien, Javier Baez, Max Scherzer, Robbie Ray, and Kevin Gausman. Now, three months’ worth of remaining offseason signing and trading is expected to take place in roughly a four-week period, creating a frenzy the likes of which we’ve never seen. The salary arbitration process will likely bleed into the regular season. You can review the best remaining free agents here, and our series of posts on the trade market here.

The bottom line in all of this: baseball is back, and it will be back in a big way. Spring Training games will commence late next week, and April 7 is now the target for Opening Day. Carlos Correa, Freddie Freeman, Trevor Story, Clayton Kershaw, Nick Castellanos, Kyle Schwarber and dozens of other free agents remain unsigned, while the A’s and Reds are among the teams expected to be active in trading veteran players coming out of the lockout. Stars like Matt Olson and Luis Castillo are among the most notable names expected to be on the market, and activity is expected  to be nothing shy of frenetic.

As is the case with every trade deadline and Winter Meetings bonanza, we’re prepared to cover the deluge of Hot Stove activity to the fullest here at MLB Trade Rumors. After nearly 100 days with only minor league free agency, labor quarrels and countless “what if” scenarios dreaming of idyllic post-lockout days, we’re just as excited as the rest of our readers to have actual baseball transactions and actual baseball games now on the horizon. Thanks for sticking with us through it all, and let the chaos begin!

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