MLB Labor Wars Reignite: Breaking Down the Players' New CBA Demands

[Matthew Nethercott]

Image courtesy of Peter Aiken-Imagn Images

The MLB labor fight is getting underway as the current collective bargaining agreement expires on December 1st. On Wednesday, the MLB Players Association made its first proposal of what it would like a CBA to look like, and it's what we would expect from the players' side.

1. Significant increases to 40-man minimums

The players' association wants the minimum player salary for players on the 40-man roster to rise from $780,000 per season to $1.5 million per season. This would include more bonuses for pre-arbitration players. An example of that would be boosting salary if a pre-arbitration player wins the MVP or Cy Young.

With the 40-man minimum changes proposed, the players' association also proposes that new rules be implemented to stop teams from manipulating a player's service time. That could be keeping players that could help the MLB team win in the minors for additional eligibility, or keeping a player down for a certain number of games would not give them enough MLB time, maximizing their rookie status to possibly receive a compensation pick if the player wins the Rookie of the Year award. 

2. Elimination of the qualifying offer

This would be one of the biggest changes to the MLB free agency process, and it would benefit both sides. The qualifying offer is something teams can attach to a player entering free agency for a sum of money (around $23 million currently) for the player to return to the team on a one-year deal. If the player declines, the team that made the offer would receive a compensation pick in the draft if they sign with another team. This seriously hinders the market of the player in free agency, which is why the players want to see it go.

The memo also proposes that players who turn 30 and have five or more seasons of service time should be automatically eligible for free agency. This would also help with MLB's issues with service time manipulation, as there would be less incentive for teams to keep their players down if they would hit free agency sooner due to age and service time.

3. Increased benefits for lower-revenue clubs who lose players to free agency

A lot of times in free agency, teams that can't afford to keep their homegrown talent, as we will likely see this upcoming offseason with Tarik Skubal and the Detroit Tigers. This proposes that small market teams that lose their players to big market teams will receive some other compensation, most likely picks, but that was not outlined in the memo.

4. “Luxury Tax” threshold increases and removal of non-monetary penalties

The players' association would like to raise the luxury tax threshold from $244 million to $300 million. There is very little chance that teams like the Yankees or the Dodgers would accept a proposal that would require them to pay that much in luxury tax penalties each season. 

5. A new “Competitive Integrity Tax”

This would be appealing to most big-market owners because one of the biggest issues in baseball is small-market teams getting away with not spending much on payroll and being known for their farm systems. This would be a tax that, if the team did not have a minimum payroll of $150 million, they would be penalized in some form or fashion, whether it's money or draft picks. In other words, this would act as a soft salary floor, much like how the luxury tax acts as a soft salary cap.

Under this framework, the revenue-sharing system would undergo significant overhauls to incentivize winning and narrow the gap between markets. High-revenue clubs would face a substantial increase in sharing their local media revenues to funnel broadcast dollars directly to lower-revenue organizations. To reward on-field success rather than just subsidizing tanking, tens of millions in additional revenue-sharing pools would be explicitly directed toward low-revenue franchises that achieve a winning record or secure a postseason berth. At the same time, clubs would be permitted to retain a larger percentage of their own stadium-related revenues, creating a direct financial incentive for all teams to invest in their fan experience and drive local ballpark attendance.

6. Expanded draft lottery to further disincentivize tanking

This would further incentivize smaller market teams to spend money in free agency. This would give those teams draft picks and other benefits for signing players in free agency. This would go in line with spending at least $150 million in payroll to be competitive, and they will receive draft picks. This would also mean that teams can still be competitive while ensuring they get good picks in the draft each year.  

MLB's Response

While the MLB will not submit its proposal until tomorrow, MLB spokesman Glen Caplin released a statement to the media:

"We appreciate the union making a set of proposals, and we look forward to continuing the bargaining process and working towards solving the competitive balance problem our fans are telling us needs to be addressed. We understand their proposals are designed to benefit players. Unfortunately, they do not address and, in fact, exacerbate the competitive balance problem our fans are telling us we must address. The MLBPA’s proposal would reduce the amount transferred to lower-revenue Clubs, weaken the Competitive Balance Tax, and lead to even more payroll disparity than exists today. For example, under the Union’s proposal, the Dodgers would pay less in luxury tax payments, giving them an additional $70 million to spend on payroll.”

This looks like we're in for a long fight of labor wars between the two sides.

View full article

[bean5302]

Obviously a pie in the sky first offer, but there are dangers in insulting people out of the gate. I mean... it's an insane ask, but maybe?

MLB makes about $10B in revenue. $167k per team after 50% cut. Having a salary floor at $150k could work with a 100% revenue sharing model. That model would also come with a hard cap. It would have to come with a hard cap for long term viability.

[Jeff K]

I suppose it's an opening salvo from the players, but it does not seem productive.

[Brock Beauchamp]

12 hours ago, bean5302 said:

Obviously a pie in the sky first offer, but there are dangers in insulting people out of the gate. I mean... it's an insane ask, but maybe?

MLB makes about $10B in revenue. $167k per team after 50% cut. Having a salary floor at $150k could work with a 100% revenue sharing model. That model would also come with a hard cap. It would have to come with a hard cap for long term viability.

I'm good with this, sign me up!

Mostly. I'm actually against 100% revenue sharing. I believe it's better for the sport for the Dodgers and Yankees and Cubs and Red Sox to be a little more prominent, and spend a bit more. But 80, 90% revenue sharing? Yeah, I'm all on board with that, and make a hard floor and cap linked to revenue.