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MLB’s New Collective Bargaining Agreement

By admin   |  

December 20, 2016   |  

MLB   |  

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MLB’s New Collective Bargaining Agreement

MLB’S new collective bargaining agreement, recently signed and in effect through the year 2021, may not seem earth-shattering at first glance, but several changed items of importance will have wide-ranging effects on baseball for the next five years.  Let’s take a look at what’s new in the MLB’s new collective bargaining agreement.

COMPETITIVE BALANCE TAX

The current system called for an “overage tax” for any payrolls above $189 million. The MLB’s new collective bargaining agreement calls for the tax to kick in for payrolls over $195million in 2017, $197 million in 2018, then $208 million and $210 million in ensuing years.  For those teams which are heavily over those limits, the tax increases and the penalties are harsher.  The highest for 2015, the Los Angeles Dodgers, at $298 million, would find much harsher penalties under this new system.

DRAFT PICK FREE AGENT COMPENSATION

In the past, in order for a team to sign a free agent, that team would have to forfeit a first-round draft pick in the next draft.  Now, in the MLB’s new collective bargaining agreement, only teams over the tax threshold will have to pay with a draft pick in the 2nd & 5th rounds, and teams under the tax threshold will pay with a 3rd round pick.  This article, explaining free agency, will help in understanding this process.

INTERNATIONAL FREE AGENTS

Many teams wanted an international draft, but that won’t be happening under the MLB’s new collective bargaining agreement.  Now each team will have their international signings capped at $5-6 million per team.

At first glance, none of these changes seem to be earth-shaking, but they are designed to make the League more balanced and competitive for the smaller markets.  Only time will tell whether they are successful in achieving those goals.

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