The new MLB collective bargaining agreement is transformational in that it contains many features new to the sport.
The MLB Players Association for years has publicly asked for change to address issues like low pay for younger players, teams that tank in order to get top draft choices, and manipulation of service time toward free agency. The union did not get everything it bargained for, but got many new and creative provisions in the agreement to address its concerns.
“We endured the longest lockout in our game’s history to make significant gains toward the objectives we originally outlined,” MLBPA Executive Director Tony Clark told Sports Business Journal in an email. “Now those gains are something we can build from in future years.”
The new features include:
■ A draft lottery that will start in 2023, where the non-playoff teams will get a chance to win the first six picks in the draft.
■ A pre-arbitration bonus pool of $50 million to be distributed to award-winning players with less than three years of service.
■ Clubs that promote top prospects to accrue a full year of service time will be rewarded with Rule 4 Draft selections.
■ Players can only be optioned five times in a season, when previously there was no limit.
■ Players will be able to be able to enter into endorsements with sports betting companies.
There are new elements in the agreement the players do not like and did not want, but agreed to in exchange for other things in the course of bargaining. Notably, a new, third competitive balance tax threshold — known as the “Steve Cohen Tax,” after the Mets free-spending owner — will hit teams with payrolls of over $290 million in the first year and $304 million at the end of the agreement in 2026. By comparison, the NFL salary cap is $208.2 million this year.
A reporter asked MLBPA chief negotiator Bruce Meyer at a news conference the day after the agreement was reached if this new tax, in effect, created a hard salary cap.
“I would disagree with the notion that it is a hard cap,” said Meyer, who worked as an outside counsel for multiple unions and worked as a lawyer for the NHL Players’ Association, where an escrow — which hockey players detest — keeps the NHL salary cap tightly in place. “I experienced real hard caps in the other sports, and believe me, they are much worse than this, as problematic as this is.”
Two days later, Cohen himself proved Meyer’s point, when talking to reporters at the newly opened spring training for his team. In response to a question of whether he would go over the $290 million spending limit that triggers a 110% tax rate for third-time offenders, Cohen said, “I probably will.”
Meyer also addressed a question about whether the measures in the deal would stop teams from tanking. “We don’t expect the problem will be eliminated, but we expect it will be better than it is now,” he said.
Meyer, Clark and other union officials talked about these measures being part of a progression toward change.
“I think in the end it’s not what’s best for me or every individual player but what is best for the collective whole,” said Craig Stammen, San Diego Padres pitcher and that team’s player representative. “And also how it positions you for the next collective bargaining agreement, which is crazy to think, but, you know, it’s five years away.”