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!

6:35pm: Tim Healey of Newsday reports (Twitter link) that the league and union also agreed to a series of games or tours in various destinations outside the United States and Canada. During the next CBA, they’ll stage events in Mexico, Asia, Puerto Rico, London, the Dominican Republic and Paris.

5:25pm: Jared Diamond of the Wall Street Journal reports (on Twitter) that beginning in 2023, the schedule will be adjusted such that every team plays all 29 opponents in each season. The exact format is to be determined, but those games will come attached to a decrease in the number of intra-divisional games teams will play. Previously, teams played 19 games per season against all four of their divisional opponents.

2:34pm: With the new collective bargaining agreement in place, Opening Day will be set for April 7, as first reported by Bob Nightengale of USA Today (Twitter links). It’ll be a 162-game season with full player pay, with the end of the season pushed back three days and doubleheaders in place to compensate for the one-week delayed start. Spring Training games will begin around March 18.

Players will be able to report to Spring Training tomorrow, tweets Jeff Passan of ESPN. The mandatory spring report date is Sunday, March 13, according to Chelsea Janes of the Washington Post.

MLB had announced yesterday it was canceling games through April 13. However, today’s progress in negotiations led the league to backtrack on that stance. Nothing has been made official on the league’s end — presumably, that’s pending this evening’s ownership ratification, which is expected to be a formality. At that point, the league figures to make a formal announcement on the schedule. Presumably, it’d reinstate the originally scheduled games it nominally wiped out yesterday, but there’s been no word on that yet.

1:55pm: Heyman tweets that the MLBPA executive subcommittee “appears” to be voting against the proposal, though it’s not clear whether that’s a unanimous decision or whether there’s a split camp among the eight players on that committee. That’s an important distinction, as the MLBPA needs a simple majority among the 30 team union reps and the eight members of the subcommittee — a total of 20 yes votes. In other words, it’s still possible for the union to approve the deal even if the executive subcommittee is against it.

1:45pm: Heyman tweets that MLB’s proposal also requests that the MLBPA drop the $500MM grievance it filed against MLB, wherein the players posited that MLB did not negotiate in good faith during return-to-play talks in the pandemic-shortened 2020 season.

1:14pm: Heyman tweets that MLB’s proposal calls for spring games to begin around March 17 and for Opening Day to fall on April 5. That would require backtracking on several of the games previously announced to be canceled or “removed from the schedule,” and ESPN’s Jesse Rogers adds that the remaining games would be made up through a series of doubleheaders that, notably, would be nine innings in length.

As notably, Rogers tweets that free agency could reopen as soon as tonight if the two sides reach an agreement and ratify the new CBA today. Sports Illustrated’s Tom Verducci suggested the same earlier today in an appearance on MLB Network.

1:09pm: The MLB Players Association has received the league’s latest counterproposal, as first reported by ESPN’s Marly Rivera, and is now in the process of reviewing the latest changes proposed by ownership. MLB Network’s Jon Heyman reports that the newest proposal saw the league up its proposed pre-arbitration bonus pool from $40MM to $50MM. Ken Rosenthal of The Athletic, meanwhile, tweets that there have been a few more modest concessions made in terms of the competitive balance (luxury) tax threshold and the minimum salary. MLB increased its proposed luxury threshold in 2026 (the final year of the proposed CBA) — slightly closing what had been an $8MM gap. The league held firm on its proposed $700K minimum salary for the upcoming season but offered a $10K increase over the $770K it had proposed in 2026 — up to $780K.

The movement on the pre-arbitration pool is the most notable jump made. The two parties had been facing a gap of $25MM, with the players coming in at a $65MM pool in 2022. However, the larger issue is surely whether that pool will grow at all over the life of the agreement. MLB has been steadfast in its push to keep the newly created bonus pool static, whereas the players have sought a $5MM annual increase to the size of the pool.

On the CBT front, the two parties had previously faced annual gaps of $2MM, $3MM, $4MM, $5MM and $8MM over the life of the potential agreement. MLB has held firm on its $230MM, $232MM, $236MM and $240MM threshold proposals from 2022-25, but they’re now proposing a $244MM threshold in 2026.

Notably, Heyman adds that the league’s proposal requests that the MLBPA drop previously filed grievances against the Rays, A’s, Pirates and Marlins — suits that allege that those four organizations had not sufficiently reallocated their revenue-sharing funds toward improving the on-field product. That’s not a new request, MLBTR has learned, but it’s also not one to which the union has previously agreed. That will be among the many topics considered when the union takes its vote — which ESPN’s Kiley McDaniel suggests could be taking place right now.

Confoundingly, Rosenthal indicates that MLB has yet again attempted to set another “deadline” for players, this one at 3:00pm ET today — a bit under an hour from now. MLB’s repeated attempts to set a deadline have not resulted in a deal yet and have generally served to stall negotiations rather than encourage them. The union hasn’t felt compelled to stick to those league-implemented deadlines, but the fact that they union appears to be in the process of voting right now, rather than outright refusing the proposal, at least offers a notable departure from some of the previous and more contentious back-and-forths that have taken place. Also of note, Daniel Alvarez Montes of El Extra Base tweets that if a deal is reached before that 3pm “deadline,” players will be allowed to begin reporting voluntarily to their Spring Training facilities as soon as tomorrow.

All of this movement comes after a morning agreement in which the two parties reached a provisional agreement regarding a July deadline to negotiate an international draft that would begin in 2024. If a deal is reached by July 25, the qualifying offer system (and the draft-pick compensation associated with it) will be eliminated. If no deal on the international draft is reached, the qualifying offer system and draft-pick compensation will remain in place, and the current international amateur free agency structure will remain in place.

12:28pm: The union has received MLB’s new counterproposal, tweets ESPN’s Marly Rivera.

10:43am: The Athletic’s Ken Rosenthal tweets that with the international draft and qualifying offer disagreements now resolved, the league is preparing to make a “full proposal” to the union. As of this writing, MLB had not yet countered the final proposal received by the MLBPA yesterday.

10:29am: Major League Baseball and the Major League Baseball Players Association have reached a provisional agreement regarding the international draft, reports ESPN’s Jeff Passan (Twitter thread). The two parties have set a July 25 deadline to determine the specifics of an international draft that would go into effect beginning in 2024. If a deal on the draft is reached by July 25, the qualifying offer system and the associated draft-pick compensation will be eliminated. If the two sides do not reach a deal on the draft, the qualifying offer system will remain in place — as will the current international amateur free agency structure.

While this is a step shy of an agreement to actually implement the draft itself, it’s nevertheless a major hurdle that has been cleared on the path to the ratification of a new collective bargaining agreement. Discord regarding the league’s desire to trade the elimination of the qualifying offer system for an international draft yesterday derailed talks and led to commissioner Rob Manfred further postponing Opening Day until April 14. The MLBPA’s final proposal to the league included a similar provision to the one agreed upon today, with a Nov. 15 deadline to agree to the draft instead of the newly proposed July 25 deadline.

With the theatrics surrounding the theoretical international draft’s implementation and the qualifying offer system now set to the side, it would appear, ostensibly, that the focus can shift back to the core economic issues that have been the crux of recent negotiations. While the international draft was framed as a sticking point yesterday and garnered a huge portion of the attention, there are still some gaps to bridge on key economic issues such as the competitive balance (luxury) tax thresholds, the newly proposed bonus pool for pre-arbitration players and, to a lesser extent on the league-minimum salary.

As of yesterday afternoon, the MLBPA had dropped its asks on the new CBT thresholds to $232MM in 2022, $235MM in 2023, $240MM in 2024, $245MM in 2025 and $250MM in 2026. The league’s prior proposal included proposed thresholds of $230MM, $232MM, $236MM, $240MM and $242MM over those respective years. In essence, the two parties face respective gaps of $2MM, $3MM, $4MM, $5MM and $8MM in that five-year span.

There’s a wider rift on the pre-arbitration bonus pool, with the union yesterday dropping its proposal to $65MM (presumably with the same $5MM annual increase previously sought). Ownership, meanwhile, has countered with a flat $40MM pool that will not increase at all over the CBA’s five-year term. That $25MM gap is sizable on the surface, though it does boil down to a matter of $833K per team — scarcely more than the new league-minimum salaries that will be going into place.

On that note, MLBTR’s Tim Dierkes reported yesterday that the MLBPA had dropped its proposed league-minimum salary to $710K — narrowing what was a $25K gap to just a $10K gap between MLB’s proposed minimum of $700K. Both parties have agreed that the minimum salary would rise by $70K over the five-year life of the CBA, so the difference at this point rests solely on that small difference in starting point. Of all the issues, this would seem to be far and away the simplest to bridge.

It’s hard not to be encouraged by progress surrounding what had emerged as a major roadblock, but optimism should still be tempered. The gaps on the CBT threshold and, particularly, the bonus pool for pre-arbitration players are still relatively prominent, and there’s no indication yet as to the extent to which MLB will move in its forthcoming proposal. It’s also eminently possible that additional hurdles will arise. Few foresaw the international draft playing such a prominent role prior to this week.

A pair of issues that shouldn’t serve as an obstacle, Dierkes further reports (via Twitter), are on-uniform advertising patches and the Athletics’ revenue-sharing status. Yesterday’s MLBPA proposal agreed to allowing advertising on player uniforms, and the union also agreed to reinstate the Athletics as a revenue-sharing recipient. Oakland did not receive revenue-sharing funds in 2021 or in 2020. They’d seen a reduced share in 2017-19, under the terms of the previous CBA — a penalty levied due to questions about whether the team had sufficiently invested those funds back into the on-field product and whether they’d made their best efforts to secure a new stadium.

Time will tell just what the owners’ latest offer brings, but even tempered optimism is a welcome change from last night’s tenor. Whenever the two parties finally reach an agreement, the floodgates could well open in a hurry. Sports Illustrated’s Tom Verducci said in an appearance on MLB Network this morning that free agency could potentially reopen the same day that an agreement is reached, for instance (Twitter link via MLB Network’s Jon Morosi). And it’s worth noting, too, that The Athletic’s Jayson Stark tweeted this morning that the league still viewed a 162-game season as a possibility.

It’d be premature to say an agreement is nigh, but the breakthrough from yesterday’s most prominent roadblock is a breath of fresh air as an increasingly stagnant lockout reaches its 99th day.