Collective Bargaining Agreement

Major League Baseball pushed its deadline for a labor deal to 5pm Tuesday, bringing about some renewed hope that a new collective bargaining agreement could be agreed upon without the cancellation of any regular-season games. Both the league and the union made some notable offers overnight, with the players showing a willingness to drop Super Two expansion from their proposal and the league dropping increased overage penalties for teams exceeding the luxury tax.

It’s frankly staggering that after a months-long lockout, the maintenance of the status quo in those regards feels like progress, but there are larger elements at play in other areas of negotiation. One key item that has not drawn much attention to this point but is currently a part of the league’s proposal, per Evan Drellich of The Athletic (Twitter link), is an international draft. The implementation of an international draft would be seen as a sizable gain for the league and would presumably require them giving something back to the players in return, though at present it’s not clear just how feasible its inclusion will be.

As with all elements of a proposal (from either side), it’s possible that the inclusion of an international draft is little more than a bargaining chip that will eventually be “dropped” under the guise of making a concession. Both parties have done this throughout negotiations, presenting items known to be nonstarters for the opposition before largely backing off as talks reached — and surpassed — MLB’s imposed eleventh hour. Super Two expansion and increased CBT penalties, for instance, have both been generally viewed as non-negotiable by the league and union, respectively, but remained key components of both parties’ proposals until late last night. Whether the league is seeking to wield the international draft in a similar capacity isn’t clear, but to this point there’s no reason to believe the two sides are close to agreeing on this front.

Talk of an international draft has been ongoing in various capacities for more than a decade, although it has not, to this point, been a prominent feature of the current wave of collective bargaining. International free agency used to be largely unregulated within the sport, allowing teams to spend as they pleased on amateur talent from other countries, with only U.S. and Canadian talents being subject to the annual Rule 4 (amateur) draft held each summer.

The 2012-16 collective bargaining agreement implemented stricter classification of which talents could be considered amateur versus professionals and also instituted harsh penalties for exceeding league-allotted international bonus pools. The thought, at the time, was that teams would shy away from exceeding their bonus pools for fear of being significantly curbed in future signing periods. Exceeding the bonus pool by a certain threshold in a year limited teams to bonuses of $250K (and later $300K) or less in subsequent periods.

What unfolded instead was somewhat the opposite. Multiple teams — the Cubs, Yankees, Padres, Dodgers, White Sox and Red Sox among them — showed no hesitation in absolutely shattering their league-allotted pools, either in order to make one-time runs at stocking the farm with enormous waves of amateur talent or to sign the highest-profile talents on the international market. That approach is what led the Red Sox to sign Yoan Moncada for a $31.5MM signing bonus that came with a 100% overage tax — effectively spending $63MM just to get him into their system. The White Sox did the same with Luis Robert, signing him for a $26MM bonus that came with a 100% dollar-for-dollar tax.

The 2017 collective bargaining agreement eliminated teams’ ability to do so — presumably much to the relief of smaller-market clubs that felt they had no hope of signing players in that regard. The union agreed to hard-capped international bonus pools, the overall size of which were tied to the team’s record (just as is the case with the annual amateur draft). In essence, the more games lost by a team, the larger the international bonus pool and amateur draft pool. The increased restrictions on teams’ paths to acquiring amateur talent is now seen by the players as a major component of what they believe to be an anti-competitive landscape in MLB that incentivizes clubs to stop spending money and embark on lengthy rebuilds in the name of rebuilding the farm system.

The specifics of a potential amateur draft remain unclear, but in theory, it could be seen as a means of further limiting the ability to spend freely on amateur talent and further incentivizing prolonged rebuilds — at least if the international draft order is tied to record (and particularly if it is separate from the amateur draft lottery being discussed by MLB and the MLBPA).

It’s also unclear just who’d be eligible for the international draft in its currently proposed state. At present, players who are at least 25 years of age and have at least six years of professional experience in a foreign league are deemed “professionals” and are exempt from bonus pools, allowing them to sign Major League contracts. Padres infielder Ha-Seong Kim and current free agent Seiya Suzuki are prominent recent examples of this. Players who are younger than 25 and/or have fewer than six years of pro experience — e.g. Moncada, Robert, Shohei Ohtani — are deemed “amateurs” and are only able to sign minor league contracts with signing bonuses. The 2017 CBA, as previously mentioned, hard-capped those bonus pools, which is why Ohtani’s bonus was “only” $2.3MM, as opposed to the enormous bonuses secured by Moncada and Robert.

It’s a bit surprising to see such a notable component being moved into the spotlight a bit with time for an agreement ostensibly dwindling, but its inclusion is nevertheless quite notable — whether it’s being legitimately discussed or simply yet another in a long line of leverage plays that has been brandished throughout a contentious set of negotiations.

The MLBPA has dropped their proposal to change the percentage of players with 2+ years of service who are eligible for salary arbitration, reports Bob Nightengale of USA Today.  Evan Drellich of The Athletic phrases it slightly differently, reporting, “The MLBPA is willing to drop proposal to expand salary arbitration if rest of numbers work out.”  Since 2013, the top 22% of those with 2+ years of service, known as Super Two players, have been eligible.  The MLBPA initially sought to make that 100% of 2+ players, moving steadily downward in their recent proposals.  MLB has considered changing the 22% figure to be a non-starter, despite agreeing to a change in this area a decade ago.

In what might amount to one of the players’ biggest wins in this CBA, MLB previously agreed to a new pre-arbitration bonus pool concept that will reward top performers before they reach salary arbitration.  At last check, the MLBPA had been seeking a $115MM pool.  Early Tuesday, Derrick Goold of the St. Louis Post-Dispatch (among many others) reported that MLB is currently offering $25MM for that pool.  So, there’s still a significant gap here to bridge.

Goold also notes that MLB is offering a $675K minimum salary for 2022, up from $570,500 in 2021.  MLB has proposed increasing that by $10K per year through the five-year CBA.  The lowest-known MLBPA proposal was $775K in 2022, ascending all the way to $895K in 2026.

On the important topic of the competitive balance tax, Bob Nightengale of USA Today says MLB is currently proposing base tax thresholds of $220MM in 2022, $220MM in 2023, $220MM in 2024, $224MM in 2025, and $230MM in 2026.  Notably, MLB has dropped its proposal to increase the tax rates for exceeding the thresholds.  At last check, the players were seeking CBT thresholds ranging from $245MM in ’22 to $273MM in ’26, so there is plenty of work to be done here.

It appears increasingly safe to expect a 12-team playoff field this year, as well as the universal designated hitter — although it bears repeating that even these generally agreed-upon items are all part of package proposals.  The league and union have not agreed on any items in isolation, but rather agreed on certain inclusions or exclusions as part of larger proposals that are gaining traction.  Some major components of a theoretical agreement that remain unsettled right now include draft pick compensation for signing free agents, how anti-tanking and anti-service time manipulation measures will look, whether the A’s will be restored as a revenue sharing payee, on-uniform advertising, an international draft, and how much lead time MLB will need to provide for on-field rule changes.

According to Drellich at 7:57am central time today, MLB is willing to drop draft pick compensation for free agents, and they want the first five picks to be subject to the draft lottery.  At last check, the MLBPA wanted the lottery to encompass the first seven picks in the draft, and perhaps more importantly were seeking penalties for teams that finish bottom eight to twelve in consecutive seasons.

Though significant work remains to be done in many key areas, each side has finally dropped its most extreme demand at the 11th hour: increased CBT penalties for MLB, and expansion of Super Two for the MLBPA.  As an MLB spokesman put it, “We made progress. We want to exhaust every possibility.”  Baseball fans have good reason to be hopeful a deal can be reached prior to MLB’s new 5pm deadline today.  Talks are set to resume at 10am.

1:27am: “There will be no deal on a new collective-bargaining agreement in this early hour,” reports ESPN’s Jeff Passan.  Passan says the two sides will meet again later today in hopes of finalizing a deal, with MLB’s deadline to miss regular season games moved to 5pm on March 1.  We can all call it a night, with the first real sense of optimism since the lockout began.  Indeed, Chelsea Janes of the Washington Post reports that the “union indicated a belief that MLB showed a willingness to get a deal today.”

12:32am: Negotiations between MLB and the MLB Players Association have been going on continuously since Monday morning, now stretching into the early hours of Tuesday.  For the first time since the lockout began on December 2, real progress is being made on a new collective bargaining agreement.  Jon Heyman of the MLB Network reports, “Current plan is to stay in the stadium and keep talking until a deal is done. Determination to finish this exists.”

The parties have already reportedly agreed upon one key point, settling on the expansion of the postseason t0 12 teams.  In a December 27 survey of over 17,000 MLBTR readers, about 28% preferred 12-team playoffs, with 62% favoring 10 or fewer teams.

However, Bob Nightengale of USA Today tweets that “several hurdles still need to be resolved” to wrap up a deal. Among those would seem to be where to set the competitive balance tax thresholds, the league minimum salary, and the amount of money to be allocated to the bonus pool for pre-arbitration players. Ben Nicholson-Smith of Sportsnet reported recently that the parties were “actively discussing” where to set the CBT (Twitter links), and added that a gap on the pre-arb bonus pool remains.

There haven’t been many reports on specific terms being discussed since Nightengale first reported a compromise on a 12-team playoff at 10:41pm CST on Monday. Key representatives on both sides continue to work, with 16 consecutive hours in the books. The thirteenth distinct meeting of this marathon bargaining session just began between representatives of each side.

Major League Baseball’s imposed deadline for a collective bargaining agreement to be in place to avoid disruption to the regular season is tonight, and the league has already stated its willingness to cancel a month of regular season play. In response, a few players have taken to social media with seemingly tongue-in-cheek suggestions they could look into the possibility of playing in foreign leagues.

Reigning NL MVP Bryce Harper posted a picture of himself on Instagram donning a Yomiuri Giants uniform (h/t to Britt Ghiroli of the Athletic). The Giants, based in Tokyo, are a member of Japan’s Nippon Professional Baseball. Braves reliever Luke Jackson tagged the Mexican League’s Toros de Tijuana in a tweet implying he could be available to sign there. Yankees outfielder Joey Gallo joked about creating a self-deprecating profile on LinkedIn (on Twitter).

Pointed quips aside, it’s not out of the realm of possibility that some players could pursue opportunities in foreign leagues if the lockout lingers into the start of other countries’ seasons. As Ken Rosenthal of the Athletic points out (on Twitter), guidance provided by the MLB Players Association to players and their representatives last November stated the union would back any effort by a player who wanted to make the jump from an MLB 40-man roster to a foreign league. “The PA would challenge any attempts by MLB to interfere with Players who choose to participate in a foreign league during a lockout,” the union wrote, shortly before the league implemented the lockout. “During the 2004-05 work stoppage, a large number of NHL players chose to play internationally.”

How many players would have interest in exploring that possibility remains to be seen. It’d certainly register as a surprise if a star like Harper or Gallo — each of whom has already banked notable earnings in their careers, albeit to different extents — made that kind of move. However, players on the fringes of 40-man rosters could more earnestly pursue those opportunities if they present themselves. Even in offseasons unaffected by a work stoppage, it’s not uncommon to see players at the very back of rosters request their release to head to a foreign league like NPB or the Korea Baseball Organization. Those deals typically come with a guaranteed salary greater than what the player might’ve made shuttling between the majors and Triple-A (and sometimes even above the MLB minimum salary).

It doesn’t seem likely we’ll see an exodus of big leaguers heading to Asian leagues. NPB and Taiwan’s Chinese Professional Baseball League limit each team to carrying four foreign-born players on their active rosters at any given time. The KBO caps teams to three foreign players with salary maximums. All KBO foreign roster spots for 2022 are already accounted for, and NPB and CPBL teams would face similar challenges in accommodating multiple players.

That’s not to say players would be completely devoid of opportunities though. The Mexican League, in particular, could be a destination. While that league places a limit of seven foreign players per team, it exempts foreign-born players of Mexican descent from that list. As Joseph Bien-Kahn of GEN explored in 2019, that loophole has incentivized teams signing players born outside of the country to search for any semblance of Mexican heritage in the player’s genealogy.

Whether any players will choose that route remains to be seen. The lockout doesn’t seem to be on the verge of a resolution, and big league players are facing the possibility of lost game checks. The MLBPA has stockpiled a strike fund in recent years, from which union members will receive stipends for an indeterminate period of time if the lockout continues. (MLBTR’s Steve Adams broke down that system in greater detail this afternoon). The chance to play in a foreign league could allow some players to supplement their income, however. If MLB indeed follows through on its stated amenability to canceling games, it’s possible the union’s support for players pursuing foreign opportunities could spur some to explore that avenue.

The Major League Baseball Players Association has organized a “fully staffed” stadium and training facility in Arizona for players to work out during the course of the lockout, reports Robert Murray of FanSided (Twitter link). Derrick Goold of the St. Louis Post-Dispatch reports (on Twitter) that the union has interest in arranging a similar facility in Florida.

That the MLBPA has set up alternative training options for players unable to access team facilities is the latest indication of what has become apparent — there’s little reason to believe a new collective bargaining agreement is imminent. The league’s imposed deadline for agreeing upon a new CBA without canceling regular season games is today, and MLB has informed the union of their willingness to scrap a month’s worth of regular season action.

So long as the lockout drags on, players on 40-man rosters will remain unable to have contact with team personnel or to access club facilities. Plenty of players work with independent trainers even during typical offseasons, and it seems likely many will continue to stay in shape on their own.

That said, the union’s arrangement of an operational stadium and facility (and apparent desire to create a second on the other coast of the country) provides players with another option. It’s the latest union effort to bolster solidarity and willingness to continue to wait out the work stoppage. Of greatest import as the threat of lost game checks looms larger by the day is a strike fund compiled by the MLBPA’s withholding of licensing revenue over the past few years in anticipation of a potential lockout.