The Major League Baseball Players Association (MLBPA) submitted its first proposal to Major League Baseball as part of the upcoming collective bargaining negotiations.

Changes to the Luxury Tax Structure

The most notable issue proposed is introducing a “competitive-integrity tax” on teams that spend less than $150 million on payroll. This would work similarly to the current competitive balance tax, which penalizes teams that spend over a certain limit. Alongside the low-end tax, the new proposed competitive balance tax under their plan would begin at $300 million. This plan would also remove the penalties for repeat offenders of the competitive balance tax.

Changes to Revenue Sharing

The MLBPA also proposes changing the revenue-sharing system to distribute more money from local television revenue, while decreasing the amount distributed from in-stadium revenue. Per Jeff Passan of ESPN, this would incentivize teams that win and draw large crowds. Under this new revenue-sharing system, every small-market club would initially receive a guaranteed minimum of $240 million. These clubs would be penalized for failing to spend the money. Low-revenue clubs that qualify for the playoffs or have a winning record would also qualify for extra revenue sharing. This plan also closes loopholes that allow teams to pocket revenue-sharing funds intended for their own use.

Changes to Player Salaries

The MLBPA also seeks to increase players’ early-career earnings. They propose raising the minimum salary from $780,000 to $1,500,000. The pre-arbitration bonus pool under their plan would increase from $50 million to $180 million. The minimum salary for arbitration would be $3 million. Arbitration super 2s would jump from 22% of players to 44%.

Changes to Free Agency

Currently, any free agent, regardless of age, must have six years of service time to become a major league free agent. The MLBPA’s plan adds a small change: any player who has turned 30 only needs five years of service time to qualify for free agency. A team could retain them for a sixth year if they offer them the average of the top 125 salaries. Otherwise, they become a free agent. The MLBPA also seeks to eliminate the qualifying offer and the penalties that accompany it. Lower revenue clubs that are active in free agency would receive draft picks and other benefits under this plan.

Other Notes

The plan aims to tighten rules against service-time manipulation, broaden salary arbitration, and expand the draft lottery.

As expected, this is a player-friendly first proposal from the MLBPA, but one that is likely to appeal to the owners of small-market teams.

Next Steps

Major League Baseball will introduce its first proposal on Thursday. As per usual, they are expected to push for items including opening discussion on a salary cap and implementing an international draft.

The current collective bargaining agreement ends on December 1, 2026, and it is expected that the owners will impose a lockout, similar to 2022.