Labor Agreement Breakdown

It was a huge relief to see the MLBPA and the owners finally reach a deal on a new Labor Agreement. Overall, I believe the players did a very good job with this deal, particularly with some of the smaller "lifestyle" upgrades they were able to secure for a large majority of the union. Unfortunately, I get the sense we will have to sit through these "deadline" deals every five years. Here are some of my thoughts on certain components of the deal (it should be noted, any writings/thoughts of mine are independent of my past employer).

CBT Levels

Major League Baseball doesn't want to call this a cap, but it essentially works like one for teams. The penalties once you go over the established thresholds are significant enough that clubs strongly prefer to avoid them. If a team is in a Championship window, it behooves them to get the right player for their team, even if it means incurring a penalty (banners fly forever), but I would assume those teams would work very hard to get back under the thresholds the following year and "reset" the penalties.

For me, this section of the deal is a weird one for the players. A majority of the dissent ends up being between Owners (small market vs large market) and the players get stuck in the middle of that group. Overall, getting the first penalty threshold raised from $210M to $230M was a significant jump from where the negotiation amounts first started and an overall win for the players. There was a story I heard a few years ago where two teams that were up against the CBT limit were discussing the finances of a trade and one Assistant GM said "we are counting every dollar over here." The other team's Assistant GM retorted with "we are counting every penny here."

Expanded Playoffs

Unfortunately, this was bound to happen. I am just happy it is 12 teams and not 14. The appeal of baseball for me has long been the marathon nature of the season. You have to build depth to win over 162 games and secure a playoff spot. Winning in the regular season should be highly incentivized and it appears that was somewhat built into this deal with the two best division winners getting first round byes. Three game series are not ideal, but they will make for great TV. Additionally, you should see more meaningful games in September as .500 teams will most likely still have a shot at securing a playoff spot with one hot streak and the upper echelon teams will be fighting hard for the first round bye. 

Draft Lottery

Meh, who cares? Being subjected to a lottery isn't going to deter teams from attempting to lose (look at my beloved Trail Blazers this season). Tanking still gives you the advantage of having the best odds, so if teams are going to be bad, they might as well get the odds in their favor as well. I do like the limit on how many years in a row a club can be in the lottery. Hopefully, that puts pressure on clubs to get out of the bottom more quickly than under the old system.

Pre-Arb Bonus Pool + ML Minimum

I absolutely loved the creation of the $50M bonus pool for pre-arb players. It was a concept I had never personally heard discussed or thought about and found it very creative. Pre-arb players (0-3 years of service) are the biggest savings for clubs and provide unbelievable value. Even a 1 WAR RP (like Dominic Leone) was worth roughly $6M - $8M in 2021, so hopefully this pool adds in some additional payments to these players. I haven't seen the details on how the pool will be distributed (does a 5 WAR player get the same share of the pool as a 1.5 WAR Player? Will there be tiers?). I would expect this pool to be a point of contention in the next labor negotiation (players will want the overall pool amount raised, owners will not). On a related note, I was very pleased to see the ML minimum raised by such a large percentage ($570,500 in 2021 vs $700,000 beginning in 2022). As mentioned above, pre-arb players generally make the ML minimum and this is a significant jump for them. I still think it is too low. If I were the MLBPA, my goal in the next agreement would be to get the first year minimum to $850,000, the second year minimum to $950,000, increase the overall bonus pool to $75M - $80M and have arbitration start after two full service years (so four years of arbitration eligibility vs the current three). I believe they made that request this year and it was immediately dismissed by the owners. The value clubs gain on a majority of these players in their first 0 - 3 years cannot be overstated.

International Draft

I tweeted about this, but wanted to elaborate - I am pro-draft, especially internationally (in reality, I actually wish it was a free market for domestic and international players, with no cap on spending for teams, but unfortunately that will never happen). In the current international market, there is too much corruption and deceit. Players agree to terms as early as 13 years old. Then, if the player doesn't progress correctly, teams will take away chunks of the agreed upon bonus. Or, vice-versa, if a player exceeds his projected growth, other teams will attempt to 'steal' the player by offering a higher bonus amount. It puts unneeded pressure on young kids and their families.

Initial reports suggest if an International Draft was implemented, the overall bonus pool amount would be greater than the current system. If that is the case, I would expect an International Draft to be implemented in 3-4 years.

I was very surprised to see the MLBPA tie the International draft to the elimination of the qualifying offer. Typically, unions do not protect non-union members. In this case, the MLBPA is choosing between protecting 4-8 of their own members (players who might receive a qualifying offer) vs unsigned International Players, who are at best, four years away from being in the union. As I also posted on twitter, if the MLBPA is going to stand up for non-union members, why not stand up for all minor league players and demand a pay increase for non-40 man players and tie that to the elimination of the qualifying offer? Minor league pay/lifestyle is a very sensitive topic right now and one that I will elaborate on in a post later this month. It will be interesting to see how final negotiation plays out. It appears there is a July 25th deadline to make a deal on the structure of an International Draft.

Smaller (but important) Improvements

The minor league salary for 40 man players (IE - players on option) increased by 22.7%. This is HUGE! Last year, players on their first contract earned $46,600 while on option, this year, it will be $57,200. The amount is still too low, but that is a significant increase and will help young players on option earn a more livable wage. I hope to see this greatly increased in the next agreement.

Options being limited to five is another great improvement. The constant shuttle between AAA and the ML is tough on players (and their families). Do I rent in the ML city? Get a hotel room ($200+ per night), what about my apartment in AAA? Should I keep it? Rent it to a buddy? Ask the club to take it over? Imagine trying to sort out these life decisions while also attempting to establish yourself as a ML player. Being optioned up to five times is still a lot in my eyes, but at least there is a limit now, which should help players.

The new waiver rules (a team that claims a player on waivers goes to the back of the line when/if that player is placed on waivers later that year by a different team) will also help players and their families. Being designated for assignment and waiting for the process to play out is a very rough 7-10 day stretch. I was surprised the MLBPA didn't push for rules on how long a player that is claimed must remain on the 40 man roster (for example, if a team claims Player X, he must remain on the 40 man roster for 30 days with his new club). The prevalent strategy by clubs seems to be to claim a player and quickly put them back through waivers in an attempt to get them off the 40 man roster, but keep them in the organization as ML/AAA depth. That sort of back and forth for players and their families is chaotic and stressful. If there was a limit on how long a player must stay with his new claiming club, it would at least provide some stress relief for a little bit.

I expect additional (smaller) details to come out in the next few weeks. Follow me on twitter - @EricFlemming for additional thoughts. 

Next week I plan on writing about the reserve list submission process and how tight you can run up against a deadline when MLB wide systems falter.