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MLB Labor Agreement Expected to be Announced Monday PDF Print E-mail
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Written by Maury Brown   
Friday, 18 November 2011 15:54

On Friday, the day after owners and GMs in Major League Baseball broke from their quarterly and players and agents ended their separate meetings, a flurry of signings have started around the league. While none of them are the plums of this year’s free agent offerings, the movement signifies that baseball is about to announce something big.

Multiple sources indicate that the new labor deal between MLB and the MLBPA is done and that an announcement is expected on Monday. The deal will include a luxury tax around the amateur draft bonus system, and changes to how compensation for premium free agents are reached.

And while that has been the key focus over the last several weeks as it was seen as a sticking point in getting the CBA completed, other big changes are expected. Here’s some that have been rumored or, are in fact, about to happen.

Balancing the Leagues at 15 a Piece

As part of the approved sale of the Houston Astros yesterday to Jim Crane, the club will move to the AL West in 2013 and with it, balance out the leagues. It means that with it, schedules should be more balanced, something the players wanted to see. Also with it, there will be some form of interleague play daily and the summer block of interleague that we’ve seen prior extended into September.

Expanding the Number of Playoff Teams

With the league realignment, MLB will see the addition of two more playoff teams, moving from 8 to 10 in 2013. The Wild Cards will host a one game sudden-death game for the right to move on in the postseason.

"We believe after a lot of study and a lot of thought that the addition of two wild cards will really help us in the long run," said Commissioner Bud Selig after the meetings yesterday.

Is adding more playoff spots a good thing? In doing research for an NBC Sports article last year, here’s what was discovered:

Major League Baseball has had eight playoff spots available to the 30 teams in the league each year, or 27 percent. In the NFL, 12 of 32 (38 percent) teams make the playoffs each season, while in the NBA and NHL, 16 of the 30 teams (53 percent) advance each season.

Changes to the Luxury Tax. One at the Bottom?

When the season expired, so did the Competitive Balance Tax, or as it’s more commonly known as the Luxury Tax. Never fear, baseball’s soft cap will be returning, but there has been rumors that it’s possible that there could be a Luxury Tax at the bottom, as well. One scenario discussed is that teams that break a threshold at the bottom of the player payroll scale, say $40 million for more than two consecutive years, would be hit with a tax, just as teams that break a high threshold figure do now. The idea is that it allows clubs to not spend as much as the players would like, but does not impose a hard floor, something that the players see as something halfway to a salary cap.

hGH Testing?

This is another rumored aspect of the drug policy that has some sticky elements to it. Politicians on Capitol Hill have been pushing all the sports leagues to implement hGH testing. The problem is, the test as it currently is, is not conclusive. There are also heavy concerns about drawing blood for the tests. Currently, a solid urine test for hGH is elusive. As we’ve seen in the NFL, the concept of hGH testing is different than implementing it. To date, the NFLPA has not signed off on the testing to allow it to move forward. Major League players are bound to have the same concerns, so watch this one closely.

Changes in Revenue-Sharing?

After Deadspin and The AP leaked financial documents from several clubs, high-revenue makers in the league said off-record to The Biz of Baseball that they were “shocked” at the amount of profits clubs such as the Marlins were pulling in. If there is a Luxury Tax at the bottom, it may be a way to address concerns that some clubs are simply fielding AAAA teams and collecting revenue sharing proceeds as a form of “welfare”. At the very least, expect tweaks to the system. Also, it would not be surprising to see language in the CBA changed to firm-up how revenue-sharing dollars are used.

When I interviewed Michael Weiner, the Executive Director for the MLBPA, and Rob Manfred, MLB’s Exec. VP in charge of labor, for Baseball America in 2010, they had strikingly different views on how revenue-sharing dollars should be used.

"Overall, the Commissioner's view is that revenue-sharing recipients have made appropriate use of revenue-sharing proceeds over a very long period," Manfred said in the interview. "Clubs at low-revenue spectrum have always gone through cycles when they develop with less expensive young talent, in a way like Tampa Bay did, that moves them along to field a very competitive team. When you're at that low-revenue period, you're still going to be getting your revenue-sharing. Clubs can then position themselves for a much higher player payroll when that roster matures, and one of the ways you may decide to position yourself is reduce your debt load so that you don't have to pay debt when your roster then matures."

Michael Weiner said that the use of revenue-sharing to pay down club debt was in violation of the CBA.

"The MLBPA's position is that revenue sharing should not be used to pay down club debt," Weiner said at the time. "We have consistently expressed to the Commissioner's Office that using revenue-sharing proceeds to pay down debt does not improve a team's performance on the field."

The CBA set to expire places an exlimation point on Wiener’s comments, as it simply reads (see page 124, emphasis provided):

A principal objective of the Revenue Sharing Plan is to promote the growth of the Game and the industry on an individual Club and on an aggregate basis. Accordingly, each Club shall use its revenue sharing receipts (from the Base Plan, the Central Fund Component and the Commissioner’s Discretionary Fund) in an effort to improve its performance on the field.

It’s possible based upon this, changes could be afoot.

How Did MLB Avoid a Strike or Lockout While the NBA and NFL Didn’t?

In a separate interview with  Michael Weiner for NBC Sports about labor relations, and why MLB had course corrected to one of having a strike or lockout for every labor agreement up till 2002, the executive director for the players union brought up the fundamental relationship.

“For a long time I think there was a substantial component on the management side that didn’t accept that the union was part of the landscape,“ said Weiner. “I think since the ’94-’95 strike, and on an increasing basis with ownership turnover, not only is there a recognition on management’s side that not only is the union a part of the landscape but that we can a positive part of improving the game and the business of the league.”

Indeed, during the NFL/NFLPA labor battle, when I asked a senior member of the NFLPA whether they felt they were partners with the league, the answer was a quick, “Hell, no.”

Partnership. Compromise. Trust. All solid aspects of any relationship. The “trust” part took years to gain with MLB and the MLBPA after collusion in the ‘80s. But, that seems to have become water under the bridge, if not a looming presence. For the NFL and the NBA, a look at the past with MLB and to how another labor agreement has been reached should be mandatory study.

By the time this 5-year agreement that is about to be announced is concluded, MLB will have seen 22 years of labor peace. It’s an incredible change for a league that optimized “tumultuous”.


Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey, and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).

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