Major League Baseball has put out its most recent proposal for the new collective bargaining agreement, and while it is very far away from something the players would agree to, there are a few things that could hint at future concessions the owners may make in the final version of the collective bargaining agreement. It is important to remember that this early out, both sides are making proposals that are largely ideal to their side to give room to negotiate from.
Salary Cap and Floor
Major League Baseball would like a floor at $171.2 million and a cap at $245.3 million. This would require twelve clubs to add $671 million to their payrolls, while eight clubs would have to cut their payrolls by $587 million. MLB frames this as a necessity for competitive balance despite baseball showing some of the best parity of any sport year after year.
MLB also claims this is overwhelmingly supported by fans, but does not provide evidence to support that. A recent survey by the Athletic found that only slightly over half of fans support a salary cap. That same survey overwhelmingly found the main issue is owners who spend too little.
Their proposal would also split revenue 50-50, but does not define what is considered “revenue”. Local media revenue would be centralized and shared equally league-wide.
Contract Structure Changes
MLB’s proposal looks to set limits on contract lengths capping them at five years. If a player signs with the team they were just on, that contract maximum increases to six years. Players joining a new team could max their earnings out at 15% of the team’s payroll, and each year that could increase by 5%. This would mean that the highest salary a player joining a new team could sign for under this proposal would be 5 years and $202 million (roughly $40 million average annual value). A player not leaving their team could sign for 6 years and $265 million.
This is unlikely to be supported by the players’ union. This, alongside the salary cap, would drastically cut down players’ career earnings. As players age, they would likely get paid significantly less than they would across those veteran years compared to if they signed a long-term contract earlier in their careers. In their prime, their earnings would also be limited by the salary cap.
The league also proposed eliminating deferrals in contracts. Currently, contracts with deferrals set the CBT hit at the present-day net value. Most teams use deferred payments in their contract structures. Even the Cleveland Guardians recently deferred 40% of Jose Ramirez’s extension, while the Royals deferred 48% of Salvador Perez’s contract.
Finally, the arbitration pool would increase by 30% to $65 million, with growth to $75 million by the end of the next CBA. The Prospect Incentive Program would be expanded to reward two draft picks, one in the major league draft and one in the new international draft.
MLB’s Concessions
MLB is willing to get rid of the qualifying offer in this proposal, a goal of the players’ union. MLB previously offered that in return for an international draft.
MLB is also offering a raise in the minimum salary to $1 million for players with two years of service time, and $900,000 for players with 0-1 years of service time. They also propose a $100,000 bonus for players when they accrue a full year of service time. This effectively matches the league minimum that the players’ union proposed.
Any player who is 30 years old and reaches five years of service time would be eligible for free agency. This was part of the player’s most recent proposal. Currently, they would need six years of service time.
These concessions are clearly tied to changes that the union will never accept, but could give a glimpse into some of the changes we could see make it into the next CBA.
