2016 Collective Bargaining Agreement

DEC. 3: Jon Heyman of FanRag tweets that, under the terms of the new CBA, each Rule 5 Draft pick will cost $100K, rather than $50K in the previous CBA.

DEC. 1, 8:10pm: Passan also reports (on Twitter) that the new CBA allows  the league to issue extreme levels of punishment to teams that try to circumvent the international spending guidelines that are in place. Per Passan, MLB can penalize up to 50 percent of a team’s international bonus money through the 2021 season if it is found to be in violation of the new international signing rules.

12:39pm: Notably, teams can trade all of the new international bonus allotments, per Passan (Twitter links). Alternatively, they may boost their spending by adding up to 75% of their initial spending capacity.

Also, the top slot of the 2017 draft will fall to $7.4MM, though the overall spending availability in the domestic arena won’t change, Passan further tweets.

In another detail on the QO front, Rosenthal tweets that teams signing multiple qualifying offer-declining free agents would continue to sacrifice their next selection (or, in the case of a team over the luxury line, selections).

NOV. 30: Major League Baseball and the MLB Player’s Association have announced that they’ve tentatively settled on a new, five-year collective bargaining agreement. The sides are still hammering out the final deal, per the announcement.

With the new deal, the owners and union have averted any impairment of the offseason market and continued a strong record of labor peace. Fresh on the heels of a thrilling postseason, and with the game sporting rising profits, the stage is set for continued prosperity.

The expectation all along had been that a deal would be found in advance of the expiration of the prior CBA at midnight tonight. With huge amounts of money at stake for all involved, and general agreement on all but a few areas, it would have rated as a major surprise had things gone south. Still, there were rumblings of late that there could be a lockout, and it took until about three hours before the deadline to finally resolve all the deadlocks.

There will certainly be many details to parse out as the results of the negotiation are revealed. Here are some key areas that have been discussed in recent months:

Roster

In one notable realm, there will be no changes. The sides decided against modifying the active roster rules, Joel Sherman of the New York Post reports on Twitter. Rosters will remain at 25 players, rather than moving to 26, and September roster expansion will not be curtailed.

There will, however, be a new league-minimum salary, per Ronald Blum and Stephen Hawkins of the Associated Press. It’ll be $535K next year, $545K in 2018, and $555K in 2019. Then, “cost-of-living increases” will provide further bumps in the final two years of the agreement. That seems to be a rather modest rise; certainly, it does nothing to fundamentally shift the balance of earning power to newer major leaguers. There are also some minor bumps in the MiLB minimum salary applicable to players making their second appearance on a 40-man roster.

The minimum DL stint will now be ten days, Blum further reports. By making the DL more readily utilized, the rule could also increase the amount of player movement — as well as the value of optionable 40-man assets.

Luxury Tax & Revenue Sharing

Meanwhile, the luxury tax threshold will rise from $189MM to around $195MM in the 2017 season, Sherman further reports (links to Twitter). It’ll then reach $210MM over the five-year span. ESPN.com’s Jayson Stark provides the full schedule of the luxury tax line, via Twitter (as Rosenthal had previously suggested, also on Twitter). Between the $195MM starting point and $210MM max level, the tax will kick in for the intervening years at $197MM (2018), $206MM (2019), and $208MM (2020).

Additionally, the CBA imposes new penalties for spending over the tax line that figure to serve as a rather notable deterrent to big-market spending. Going past the threshold for the first time comes with a 20% tax, which increase to 30% for a second year and 50% for a third. There’s an additional 12% added on top when teams exceed the mark by between $20MM to $40MM, while going past $40MM triggers the maximum penalty — which can reach a 90% tax on overages. (That information comes via Bob Nightengale of USA Today, via Twitter; Sherman and Stark previously sketched the parameters.) Teams that go $40MM over the luxury tax line will see their top draft pick fall by ten spots, the AP adds.

The existing “performance factor” element of the revenue-sharing system will be removed, per Passan (Twitter links). That had functioned as what Passan terms a “revenue-sharing multiplier,” so its removal will likely mean that large-budget clubs are required to pay less into the pool.

Qualifying Offer

The qualifying offer system has been another area of some uncertainty, and it seems as if it will undergo some highly significant changes:

• Beginning next offseason, there will be three categories of teams in assessing the loss of a pick for signing players who turn down qualifying offers, per Blum and Hawkins. Revenue-sharing recipients would lose their third-highest selection (not necessarily a third-round choice). Revenue-sharing contributors would lose their second and fifth-highest selections and also sacrifice $1MM in international signing availability. And all other teams would stand to give up their second-highest pick along with $500K in international bonus funds.
• In terms of compensation, an organization which loses a QO-declining player who signs for $50MM or more will pick up a draft choice “after the first round.” If a QO-declining player inks for under $50MM with another organization, the draft compensation slides to “after competitive balance round B.” There’s a different set of rules for teams that are over the luxury tax line; any compensatory picks they receive will take place after the draft’s fourth round.
• Importantly, players will no longer be able to receive more than a single qualifying offer, Rosenthal reports (Twitter links). Players now will have ten days, instead of seven, to consider the offer, according to the AP duo.

All told, the above changes promise to represent a rather monumental shift in the function of the qualifying offer system. It will clearly hurt free agents less, and the reduced draft compensation will likely make it slightly more likely that veterans end up being traded in the season before they hit the open market. Whether less players will be tagged with QOs remains to be seen; though there’s less to be gained for teams, there’s also less of a disincentive for players to enter free agency.

Details also remain foggy regarding how the luxury tax assessment will be made, as regards the qualifying offer. Presumably, the league will look to the team’s ultimate Opening Day salary (or some other date certain), in which case the final draft order could shuffle depending upon an organization’s future roster decisions.

Amateur

There will indeed be a hard bonus cap for international signings, rather than a draft, Stark reports. It will only be about $5MM per team, he adds on Twitter, which seems likely to suppress international spending. There are currently some different numbers floating around on that score; presumably, it will vary over time. Here’s the latest:

• The bonus pool available will be dependent upon revenue, with the 15 smallest clubs entitled to $6MM and the 15 largest at $5MM, Nightengale suggests (Twitter links).
• The initial international bonus pool will actually be $4.75MM, according to the AP.
• There are three tiers in spending allotment, per Jon Heyman of Fan Rag (via Twitter). Large-revenue clubs will have $4.75MM to spend, mid-tier teams can go up to $5.25MM, and the smallest organizations can tap $5.75MM.

Another critical element of the system is just who is subject to the spending caps, which could significantly influence top young talent and whether it flows to the majors. Cuban players who are at least 25 years of age and have six years of Serie Nacional experience will be exempt from these limitations, Morosi tweets. It’s not entirely clear whether players from other countries will continue to be exempt from these limitations, though. Nightengale suggests that the limitations will not apply to players coming over from Asia, though that element still seems a bit unclear. Passan, for example, tweets that the current rules would seemingly keep Japanese star Shohei Otani from moving to the majors for several years (he’s still just 22).

Meanwhile, in the domestic draft, there’ll be some changes in the spread of slot values, according to the AP. Details remain unknown, but it seems there’ll be a more gradual decline than the currently steep fall after the first few picks.

Other

• There will be some changes to the Joint Drug Agreement, including additional testing, per the AP. Notably, players will not be able to accrue service time during any period they are suspended, which serves as a fairly significant additional deterrent. Finally, there’ll now be “biomarker testing for HGH.”
• The All-Star game will return to simply being a spectacle, rather than determining home-field advantage for the World Series, per the AP. Now, the World Series team with the better regular-season record will enjoy an added home game, which seems clearly a better approach.
• To accommodate additional off-days, meanwhile, the league will kick off the season in the middle of the week beginning in 2018, per Rosenthal (via Twitter). Some of those days could go toward international marketing efforts. MLB intends to put on regular season games abroad as soon as 2018, Morosi tweets, with London and Mexico the most likely targets. The CBA is expected to accommodate that new addition.
• The Athletics “will be phased out as a revenue-sharing recipient over the next four years,” Rosenthal adds (via Twitter). The A’s slice of revenue sharing will go to 75%, then 50%, then 25% over the next three years before disappearing, according to the AP.
• In other team-specific news, the Yankees seem likely to benefit under the new deal, per Rosenthal (Twitter links). Beyond the removal of the revenue-sharing multiplier previously reported, the organization will keep revenue-sharing offsets related to the fact that it paid for its new ballpark.
• The league will ban incoming MLB players from using smokeless tobacco, with existing players grandfathered in another wrinkle, per Sherman (on Twitter), .

Ken Rosenthal of FOX Sports first reported agreement on a CBA (Twitter link), while Jeff Passan of Yahoo Sports was first to tweet its duration.