Owners and Players Agree to New CBA

The word out tonight is that the MLB players and owners have reached agreement on the basic terms of a new five-year collective bargaining agreeing, meaning that all hard-core baseball fans can let out a small sigh of relief.  It seems crazy that the two sides couldn’t reach an agreement in an industry undergoing rapid revenue expansion, but the more money that’s at stake the more people will fight even when there is enough to go around for everyone.

Ultimately, the changes from the last CBA seem pretty minor.  The luxury tax amount is moving up from $189 million in 2016 to $195M in 2017 and increases to $210M by 2021.  There will still be draft pick compensation for free agents given a qualifying offer, but it now looks like the compensation will be second or third round picks, depending on whether the signing team is over the luxury tax cap, instead of first round picks.

This is actually a huge win for the players because a second or third round pick doesn’t have nearly the value of a first-round pick and thus will have very little effect on a free agent’s true market value.  Of course, if the owners were really concerned about compensating teams that lose elite free agents, there would have been an agreement to give the losing team a extra draft pick at the end of the first round, rather than taking away a draft pick from the signing team.  As far as I’m aware, that isn’t in the new contract, because the real purpose of draft pick “compensation” is to reduce free agents’ values on the open market, rather than to compensate a team for losing a star player to free agency.

There will be no international draft, but the signing bonus cap for international players will become a hard cap.  Also, MLB rosters will remain at 25 with no changes creating a limit on the number of September call-ups.

MLB players from the Dominican Republic and Venezuela were reportedly strongly opposed to an international draft, since most of these players received big signing bonuses in their day.  In my mind, an international draft in exchange for 26-man MLB rosters would have been a win for the union, because that 26th roster spot on each of the 30 teams would most likely mean that well more than 60 professional players would receive substantial major league earnings (totaling about $12 million a season at the current MLB minimum wage) they wouldn’t otherwise get.  Also, an equal number would be earning service time on their MLB pensions, which means a whole lot to the marginal major leaguers who would be filling those 26th roster spots.

Another idea that might make sense for future CBAs would be to raise the roster limit to 26 on August 1st each season.  That would cost teams a total of only about $2.5 million more (plus future pension obligations) a season and would address the collective fatigue that teams experience by that point in the season.

The biggest problem with any roster expansion beyond 25 men is that it would almost certainly mean even more pitching changes and thus delays each game than we see now.  The 25 man roster limit is effectively the only limit on the continuous trend throughout MLB’s almost 150 year history of using more pitchers each game.

Explore posts in the same categories: Baseball History

One Comment on “Owners and Players Agree to New CBA”

  1. Burly Says:

    Teams that make a qualifying offer and have their free agent sign a contract for more than $50 million with another team will indeed get a compensatory draft pick at the end of the competitive balance post-1st round picks in addition to the picks the signing team has to surrender. It all sounds pretty complicated, but probably boils down to teams losing their second round draft pick if they sign a free agent, plus a fifth round pick and $1 million in international bonus pool money if they are rich teams.

    This will definitely help free agents and in turn put upward pressure on salaries for arbitration eligible players. The minimum wage increase appears to be modest, not significantly more than the cost of living increase since the last CBA.

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