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MLB, union announce new labor deal

The owners and union have peacefully agreed to a new deal that will last until December 11, 2001! Here are some of the highlights:

  • Revenue sharing remains very much the same. As was the case this year, next year larger-revenue clubs will transfer $325 million in local revenue to the smaller revenue-generating franchises. Because the industry is generating more money, the straight pool of 34 percent will decrease to 31 percent in the new deal, but actually transfer more funds from top to bottom.
  • The competitive balance tax levels remain the same: 22.5 percent the first time a team exceeds the threshold, 30 percent the second time and 40 percent the third time. But if a team exceeded the threshold under the previous contract, it will continue to pay at the higher rate. The Yankees, for example, were over the threshold for all four years of the expiring agreement and will remain paying at a 40 percent rate for the five-year length of the new agreement unless they stay below the threshold in any given year. Then it would revert to 30 percent the next year. The threshold will increase from $136.5 million this year to $148 million next year and then continue to grow at approximately 4.7 percent a year from there until 2011.
  • After Major League players file for free agency in the one-week period that begins at midnight the day after the World Series, all subsequent deadline dates are eliminated: Dec. 7 (for club to offer arbitration), Dec. 19 (for players to accept), Jan. 8 (last day the old club could re-sign its own free agent) and May 1 (first day a club's former player could re-sign with its former club if he went past Jan. 8 date). Also, the tender date for clubs to offer contracts to all players has been moved up from Dec. 20 to Dec. 12. And players traded in the middle of a multi-year contract can no longer demand a trade.
  • The debt/service rule, in which clubs cannot borrow to pay existing debt, remains the same.
  • As far as the June First-Year Draft is concerned, teams will now get same-slot compensation if they don't sign their draft picks, meaning if a team fails to sign it's No. 3 pick in one draft, it will get the 3(a) pick in the next year's draft. More important, teams will no longer have until the next draft to sign their picks, but must do so by the following Aug. 15 or the player goes back into the pool. Minor League players that fall under the Rule 5 Draft can now be protected from an extra year. Currently players with four to five years of experience can be selected. It will increase to five to six years.
  • Type C Major League free agents will no longer carry draft pick compensation for the club that loses the player, beginning this year, while Type A and Type B free agents will continue to carry compensation. Next year the Type A and Type B pools shrink. Right now, Pool A is the top 30 percent at their position, but in succeeding with decrease to 20 percent. Pool B is the top 50 percent, but it will decrease from 21 percent to 40 percent.
  • The MLB minimum salary increases from $327,000, plus cost of living this year, to $380,000 next year. After that it goes to $390,000 for 2008, $400,000 for 2009 and 2010, and $400,000 plus cost of living adjustments for 2011.
  • The, "This Time it Counts," formula stipulating that the league, which wins the All-Star Game gets home-field advantage in the World Series, will continue under the new agreement.
  • The Commissioner's discretionary fund remains at $10 million a year.

Good to hear we'll be getting something back for losing Zito to free agency!

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Thanks for the summary.
Interesting indeed.
Stat Wonk Futurist

by salb918 on Oct 24, 2006 5:11 PM PDT reply actions  

So we will get compensation for Zito
and Thomas (if he leaves), but likely not Payton.

by Zonis on Oct 24, 2006 5:17 PM PDT reply actions  

I think it's more likely
that we'd get 'em for Payton. Type A/B goes back three years - Hurt basically took 04 and 05 off - plus it's by position and DH is a pretty tough nut to crack.

by devo on Oct 24, 2006 5:19 PM PDT up reply actions  

Deadlines ...
they are just gone?

So a club can offer arbi at any point - like after a player has already signed with another team and the player can wait until March to accept it if he hasn't gotten a fair offer?

by devo on Oct 24, 2006 5:18 PM PDT reply actions  

Clarifications
There are more/clearer details at http://mlb.mlb.com/NASApp/mlb/news/press_releases/press_release.jsp?ymd=20061024&content_id=1722 380&vkey=pr_mlb&fext=.jsp&c_id=mlb
Specifically:
Draft Choice Compensation
  1. Type C free agents eliminated in 2006
  2. Also in 2006, compensation for type B players becomes indirect (sandwich pick) as opposed to direct compensation from signing Club.
  3. Effective 2007, Type A players limited to top 20 percent of each position (down from 30 percent) and Type B players become 21 percent - 40 percent at each position (rather than 31 percent - 50 percent).
  4. Salary arbitration offer and acceptance dates move to December 1 and December 7.
Minimum Salary
  1. Major League: $380,000 in 2007, $390,000 in 2008 and $400,000 in 2009, COLA in 2011.
  2. Minor League: $60,000 in 2007, $62,500 in 2008, $65,000 in 2009.
  3. New minimum for first time roster players of 50% of minor league minimum.
  4. Maximum cut rule applicable to split contracts reduced to 60% from 80%.
[(2) and (3) refer to players on the 40-man roster who are not on the 25-man roster - $30K if it's their first year on the 40-man roster and $60K thereafter]
Some are sabermetricians.

by andeux on Oct 24, 2006 5:27 PM PDT reply actions  

COLA in 2011?
Soda will be a currency by then? ;)
"So, whatever, Ozzie." -- Nick Swisher

by FormerHuntsvilleStar on Oct 24, 2006 5:35 PM PDT up reply actions  

99 precent sure you are joking
but 99 percent sure someone here does not know what a  COLA is.

Cost of Living Allowance.

Why don't they just lick their fingers? --

by novaoakland on Oct 24, 2006 11:00 PM PDT up reply actions  

Glad to see draft pick compensation stays...
...at some level, and it sucks that the All-Star Game will still determine the home field for the World Series...but all in all I'm ecstatic a deal was done without a bunch of hoolabaloo.
"So, whatever, Ozzie." -- Nick Swisher

by FormerHuntsvilleStar on Oct 24, 2006 5:34 PM PDT reply actions  

thanks for the information
actually I am fine with all of the agreements, I never felt that C players deserved compensation, and as long as really good players are compensated for then it is a good deal.  My feeling has always been that if you really want the B player a team has the money to sign him, it is just a matter on how much you are willing to pay.  If the Yankees want to overpay a player, not much that can be done.
I am a little unclear on how the deadline dates that have changed have an effect on any team but doubt if it is significant, I think it does give a team a little more leverage to sign a player.

by china bob on Oct 24, 2006 9:30 PM PDT reply actions  

This seems fairer to me
than just ending compensation as part of the agreement.  For the A's to suddenly have the rules changed would be difficult, but they'll have the chance to adjust over the next couple of years.  I feel fairly certain that had there been no compensation coming for Zito this year, he would have been gone at the trading deadline--the drive for the division title notwithstanding.

by samljm on Oct 25, 2006 4:30 AM PDT reply actions  

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