FanPost

MLB, MLBPA reach new five-year labor agreement


I just saw some news on this and figured it would be a good topic of discussion to see how the OTM community feels about some of the changes.  I didn't see this out there anywhere, so apologies if it is out there.  I imagine Ben or another writer will do a more detailed analysis, but for now feel free to rant and rave here.  I'm not listing out everything in the link but there is quite a bit there to talk about.  Feel free to correct me if I am listing something wrong.

Link to MLB.Com with more details on CBA:

http://mlb.mlb.com/news/article.jsp?ymd=20111122&content_id=26025138&vkey=pr_mlb&c_id=mlb

Some changes that have been widely rumored have come true (Houston coming to the AL West, a 2nd Wild Card team in both leagues will be added, etc), so these (at least for me) weren't the things I was looking forward to learning more about and thus aren't really mentioned below.  Some of the more notable items:

- Revenue Sharing: The fifteen clubs in the largest markets will be disqualified from receiving revenue sharing.  So in the event a team (we'll use the Red Sox since I believe we're in a larger market and thus not a part of that group) is supposed to receive money, that money is refunded to the paying clubs.  EXCEPT if a team has exceeded the luxury tax for two or more consecutive seasons in which case they may have to forfeit some or all of that refund.

- Competitive Balance Tax (AKA Luxury Tax): Will remain at $178 million for the next two years and will increase to $189 for 2014-2016.  Slight changes on tax rates: 1st time going over = 17.5% (lowered), 2nd = 30% (same), 3rd = 40% (same) and 4th = 50% (increased)  Tax has been modified so that when a team moves below the threshold, they will be treated as going over for the first time when it next exceeds it.  I believe currently if you are over 3 times in a row (for instance), and go below for a year it only knocks one year off but someone can correct me on that.

- International Free Agents:  Seems like too much to write here, so just read the link but it seems like it COULD hurt teams like the Red Sox who have the financial clout to spend more on the IFA markets.  After 2012-2013, Each team will be assigned a Signing Bonus Pool based on the reverse order of winning percentage (worst team gets largest pool, etc) and there will be penalities for going over that total pool amount.  I should also note that it says these penalities will actually increase with the 2014-2015 signing period if a draft is not agreed to.  So it seems an International player draft is a big priority.

From the Link (Regarding IFA):

0-5% 75% tax
• 5-10% 75% tax and loss of right to provide more than one player in the next signing period with a bonus in
excess of $500,000.
• 10-15% 100% tax and loss of right to provide any player in the next signing period with a bonus in excess of
$500,0000.
• 15%+ 100% tax and loss of right to provide any player in the next signing period with a bonus in excess of
$250,000.

- Rule Four draft (i.e. First year player draft)Signing Bonus Pools - Similar to the IFA pools, each club will be assigned an aggregate Signing Bonus Pool prior to each draft.  Values are assigned to the picks in the first ten draft rounds, and a club's Signing Bonus Pool should equal the summation of those ten picks.  This, I think, will end up being one of the most widely discussed pieces of this agreement over the next couple of years, especially with the (in my opinion) even more harsh penalities.

From the Link (Regarding Rule 4 Draft)

• 0-5% 75% tax on overage
• 5-10% 75% tax on overage and loss of 1st round pick
• 10-15% 100% tax on overage and loss of 1st and 2nd round picks
• 15%+ 100% tax on overage and loss of 1st round picks in next two drafts

Regarding the above penalties for the first year player draft, the money that is received for these taxes are redistributed to the payee clubs under the Revenue Sharing plan (unless they themselves go exceed their signing bonus pools).  The lost draft picks are distributed to other clubs via a lottery (where the odds % is calculated using the prior seasons winning % and prior seasons revenue).  Clubs that exceed their bonus pool as well are not eligible to enter this lottery.  (So if the Tigers and Red Sox both lose a pick, they can not be entered into the lottery for the other team's pick.)

- Competitive Balance Lottery: Clubs with lowest revenues and in smallest markets will not have an opportunity to obtain additional draft picks through a lottery.  Clubs with ten lowest revenues, and ten smallest markets will be entered into a lottery for the six draft selections immediately following the first round.  Members of this group that do not win one of these six picks are entered into a lottery for the six picks following the second round.  The odds for each club is determined by previous season's winning %.

- Free Agency: Type A/B system using the Elias Rankings seems to be going away.  I don't fully understand how it will affect the teams in the league, obviously will be a case by case basis.  I wonder what the average salary of the 125-highest paid players from the prior season is currently.  Isn't it currently that the former club has to offer arbitration to get compensation?  Below is the language from the article.

From the article:

A. Only Players who have been with their Clubs for the entire season will be subject
to compensation.
B. A free agent will be subject to compensation if his former Club offers him a
guaranteed one-year contract with a salary equal to the average salary of the
125-highest paid Players from the prior season. The offer must be made at the
end of the five-day free agent “quiet period,” and the Player will have seven days
to accept the offer.
C. A Club that signs a player subject to compensation will forfeit its first round
selection, unless it selects in the top 10, in which case it will forfeit its secondhighest
selection in the draft.
D. The Player’s former Club will receive a selection at the end of the first round
beginning after the last regularly scheduled selection in the round. The former
Clubs will select based on reverse order of winning percentage from the prior
championship season.

OTM, what are you reactions?

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