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Labor Peace on the Diamond

Player's union and the league make great progress at the bargaining table

Brian Young's picture
Dec 02, 2016

The game must go on.  For the last 21 years, that has been the mantra of Major League Baseball in preventing labor strife.  Over the last two decades, everyone has recieved a piece of the pie.  Profits for owners have soared while Players’ salaries have increased exponentially.  All of this provided the backdrop for a new collective bargaining agreement that was settled with just hours to spare before the December 1 lockout deadline. 

The new collective bargaining agreement (CBA) will run from 2017-2021 and will ensure 5 more years of labor peace. The 27 years of labor peace will be the longest such stretch in MLB history.  While the negotiations were cordial, the threat of an owners’ lockout right before the winter meetings and the beginning of free agency served as an impetus to get a deal signed. So far this off season, teams have been wary about signing free agents until they knew what the new luxury tax threshold and the revenue sharing payments would be.  The luxury tax system was set up to tax teams that go over a certain total team salary. It was a compromise so that the league didn’t institute a hard salary cap like in other pro sports, but with some teams close to the current threshold they were wary about potentially going over the limit. In the new CBA, the threshold is now slated to increase meaning that teams can now spend more without getting hit with penalties.  Revenue sharing, where the big market teams share some of their revenue with the teams in the 15 smallest markets so that small market teams can increase their team salaries, is also expected to increase. This is good news for the MLB Players Association (MLBPA) since it means that the bottom half of the league, revenue wise, will have more money to spend on salaries.  Additionally, the MLBPA negotiated large increases to the minimum salary for players.  While players making $10 million + a year often get the attention, many players on the team are making at or near the league minimum.  Other changes include creating a pool of money that will go towards the winner of the All Star Game, adding 4 additional off days during the season and creating a 10 day disabled list.

With the new CBA, both sides got some things that they wanted.  For example, the MLBPA blocked an international draft, but the owners were able to cap the starting salaries for amateur foreign born players.  This means that a team will only have between $4 and $6 million a year to sign amateur foreign players under the age of 25, so contracts like Yoan Moncada's $31.5 million signing bonus with Boston in 2015 will be eliminated. The union was against the international draft because they could negotiate higher salaries for some of the foreign born players, but they believe that this provision will cause higher salaries for current MLB players.

The Players also got key provisions included in the contract that will help mid-level players in free agency.  By getting the owners to agree to remove the requirement that a team give up a draft pick if they sign a player who turned down a qualifying offer from their previous team, it should take away teams worries about signing the player.  This was a big issue for players like Daniel Murphy last year when he saw a smaller market for his talents since the team that signed him would have to give up a 1st round draft pick. This was a high priority for the union.

This was the first CBA negotiated by MLB PA Executive Director Tony Clark and MLB Commissioner Rob Manfred.  In 2011, Clark had recently retired and had just joined the unions staff, while Manfred served as the lead negotiator for the owners.  In a statement after the negotiations ended, Clark said "I want to thank the Players for working diligently for more than a year to negotiate an agreement that, when finalized, will benefit all involved in the game and leaves the game better for those who follow.”

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