MLB's new proposal to MLBPA addresses 4 core economic issues

Major League Baseball made a new proposal to the MLB Players Association on Saturday during a bargaining session in New York City, hoping to move negotiations for a new collective bargaining agreement in a positive direction.

With Spring Training camps scheduled to open this week, the calendar has become an issue as the two sides continue to try hammering out a new agreement in an effort to get players back on the field.

“I am an optimist,” Commissioner Rob Manfred said Thursday at the conclusion of the owners meetings. “I believe we will have an agreement in time to play our regular schedule. … We’re doing everything we can to get a deal done for our fans.

“You're always one breakthrough away from making an agreement. That's the art of this process.”

The regular season is scheduled to begin March 31, and Manfred said he views missing games as “a disastrous outcome for this industry,” adding, “We’re committed to making an agreement in an effort to avoid that.”

MLB’s latest proposal included movement in the players’ direction on four major core economic issues:

Minimum salary: MLB’s proposal gives the MLBPA the alternative to choose between two systems. In the first, players would receive a single minimum salary of $630,000 in 2022, which would mark an increase more than twice as large as the $27,500 bump the players received in the first year of the last CBA. Under this system, the minimum salary would not be capped -- meaning teams could give discretionary raises -- while the $59,500 increase from 2021 to 2022 would nearly match the increase ($63,000) over the five years of the entire prior CBA.

The league’s other proposal features a tiered salary scale which would pay $615,000 for 0+ Major League service players, $650,000 for 1+ MLS players, and $725,000 for 2+ MLS players – the latter of which is an increase of $15,000 from the prior proposal. Compared to the current minimum salary of $570,500, players would receive a 16% raise ($278,500) over their first three years of service under this plan – and that’s not factoring in a pre-arbitration bonus pool.

Pre-arbitration bonus pool: MLB had already agreed to the MLBPA’s proposal to create a bonus pool funded by the league to reward the top performers in the 0-3 MLS group of players. MLB increased its offer from $10 million to $15 million on Saturday, the same increase as the MLBPA’s move from $105 million to $100 million in its last offer.

The league’s proposal includes the formation of a Joint Committee (3 MLB reps and 3 MLBPA reps) to develop a mutually agreeable WAR statistic to allocate the pool’s funds. (Both Fangraphs and Baseball-Reference expressed concerns that their WAR metrics would be relied upon for player compensation.) On average, the top 30 pre-arbitration players would have increased their salaries by 74% under this proposal.

Competitive Balance Tax: MLB offered to increase the base tax and surcharge thresholds from its prior proposal by $2 million each in 2024 ($216 million), 2025 ($218 million) and 2026 ($222 million). Additionally, the league made an additional concession to the union by withdrawing its proposal to require clubs over the base tax threshold to forfeit Draft picks. Only teams surpassing the $234 million threshold would be subject to Draft pick forfeiture.

Teams surpassing the $234 million threshold would forfeit second-round picks, while teams surpassing the $254 million threshold would lose a first-round selection. Based on this proposal, only 14 picks would have been forfeited during the last CBA compared to the 23 picks teams actually lost.

MLB’s proposal also eliminates recidivism, creating more year-to-year consistency in both team payrolls and competitive balance. Under the previous CBA, teams could “reset” the penalties by going beneath the CBT threshold for one season, and have followed with massive spending sprees; ending recidivism would result in the restraint of runaway spending, which would help competitive balance.

Service time: MLB added draft-pick incentives to further disincentivize clubs from managing the service time for top prospects. Teams will now potentially have the chance to earn two Draft picks per player if the player reaches certain benchmarks in awards voting.

Under its proposal made in late January, MLB offered to adjust the eligibility requirement to all players with less than 60 days of service time rather than players with no service or September callups, which would remove any incentive for a team not to use a prospect as an injury replacement during the previous season. (In other words, players who receive less than 60 days of service in one season would still be eligible the next.)

MLB’s Saturday proposal also increased the incentive for clubs to promote top prospects by allowing them to receive both a Rule 4 draft selection and an International selection (should an International Draft be instituted). Players had expressed concern that a single Draft pick would not be enough of a reward for teams to promote top prospects rather than managing their service time.

“We have moved towards the players on key areas in an effort to address their concerns,” Manfred said Thursday. “Under our proposal on the table, every single pre-arbitration player would be better off than under the previous agreement.”

Other issues addressed in Saturday’s proposal included:

• Increasing the Rule 4 signing bonus values and International Draft slots to add more than $23 million of additional spending on amateur players as compared to 2019.

• An NBA-style Draft lottery.

• A proposal that players who are drafted after submitting to a pre-draft physical must be offered at least 75% of the slot value associated with their selection and can’t be failed by the club on a post-draft physical. (Think of it as the “Kumar Rocker Rule.”)

• Improvements to the health benefits package.

• A first-ever limit on the number of times a player can be optioned in a season (5).

Prior to this negotiation, MLB was already the only major North American sport without a salary cap, with guaranteed contracts worth $300 million and no limits on the length of contracts players can sign.

The current deal being offered by MLB includes a number of concessions that would benefit players in every service category. For draftees, the pool would be increased more than $20 million per year, while pre-arbitration players would gain more than $200 million in additional compensation over the term of the agreement.

For veterans, the addition of the universal designated hitter would help extend the careers for some hitters, and the average DH salary -- which was more than $9 million in 2021 -- would create 15 more significant everyday jobs for National League clubs.

MLB’s offer to eliminate the qualifying system would end Draft pick compensation, making top free agents more attractive to potential suitors.

An expanded postseason -- MLB is seeking a 14-team field rather than the 12 the MLBPA is proposing -- would also increase the playoff pool for players thanks to the gate from additional games. Increasing the field would also mean the addition of more than 100 players to postseason play.

Since negotiations resumed following the start of the lockout, the MLBPA has not meaningfully moved from its November proposal on any of the core issues, including minimum salaries, Super 2 eligibility, the competitive balance tax threshold, and the size of both a Draft lottery and an expanded postseason.

The MLBPA made minor movement on a pre-arbitration bonus pool, reducing its ask from $105 million to $100 million, while lowering its request for a reduction in revenue sharing from $100 million to $30 million. MLB has maintained from the start that reducing revenue sharing and expanding Super 2 eligibility are non-starters for the league.

An issue the MLBPA has moved on involved keeping six-year free agency intact, and while the union accepted MLB’s proposal to fight service time manipulation, it came with the caveat of adding its own plan to address the issue.