Baseball averted a labor meltdown, as the Major League Baseball Players Association and Major League Baseball agreed to a new Collective Bargaining Agreement just hours before the deadline, first reported per Ken Rosenthal of Fox Sports.
The five-year deal, through 2021, is subject to ratification by the owners and players.
“The parties continue to draft the entirety of the tentative agreement,” Major League Baseball said in a statement on Wednesday night. “Specific terms of the pact will be made available when the drafting process is complete.”
The offseason, and regular season, will continue as scheduled. Baseball, which had a World Series cancelled in 1994 with a strike that raged into the 1995 season, has seen relative labor peace for now more than two decades.
“I want to thank the players for working diligently for more than a year to negotiate an agreement that, when finalized, will benefit all involved in the game and leaves the game better for those who follow,” said players association executive director Tony Clark in a statement.
Despite soaring franchise values, steady attendance, and financial stability, negotiations for the new CBA were unexpectedly tense. The owners and players were reportedly at odds with several changes to the previous CBA that would have helped control player salaries and bonuses, including an international draft, draft-pick compensation, and changes to the current competitive-balance tax (commonly known as the “luxury tax”).
The details aren’t yet known, but among the major issues discussed were draft-pick compensation for free agents, something the players hoped to avoid; changes to the international bonus pool, and the luxury tax threshold.
From the owners’ perspective, a strong luxury-tax penalty limits just how much of an advantage the richest teams in baseball have in the free agent market.
From the players’ perspective, a heavy luxury-tax penalty, or a threshold set low enough to affect more than just the highest payroll teams, could force an overwhelming majority of teams to keep their payroll under a specific, arbitrary number, which sounded suspiciously close to a salary cap. The agreement means that both sides reached some common ground on this issue.
From 2006 to 2016, the luxury tax increased just over 38 percent, despite salaries increasing by approximately 56 percent over the same period, and the MLBPA and MLB could not agree how much of an increase to the threshold was necessary to balance the disparity.
Although it was unlikely that any regular season games were going to be at risk, the possible repercussions of not coming to an agreement before the deadline were still substantial. If the owners did lock the players out, it would have paused the offseason. The Winter Meetings would have been effectively cancelled for MLB teams and representatives, and there would be a moratorium on trades, signings, and other roster moves, including the Rule 5 draft.
But now, the sport can continue its offseason, which is especially important now since the winter meetings start on Sunday in Maryland. Let the hot stove begin.