Major League Baseball will see 26 consecutive years without a lockout. Despite concerns leading up to the December 1 deadline that a deal would not be reached and the league would face a lockout, MLB and the players union reached a new, five-year collective bargaining agreement Wednesday evening. Fewer than four hours remained before the current agreement was set to expire.
Though the owners and players still need to ratify the agreement, that outcome is virtually guaranteed. Ken Rosenthal of FOX Sports was the first to report that a deal was done, while Jeff Passan of YAHOO! Sports said that it was for five years.
.@MLB, @MLB_PLAYERS reach tentative 5-year labor agreement through 2021, subject to ratification by both parties: https://t.co/4EW1YqgvKg
— MLB (@MLB) December 1, 2016
MLB and Players Union Reach New Collective Bargaining Agreement
The new agreement will look strikingly similar to the old one. According to the Associated Press, the luxury tax threshold will increase from this year’s $189 million to $195 million in 2017, $197 million in 2018, $206 million in 2019, $208 million in 2020, and $210 million in 2021.
The international draft, one of the major sticking points between the league and the union, will not be added to the new agreement. Instead, there will be a cap on the amount teams can spend on international players. And while there were rumors that rosters would increase from 25 to 26 players, that will not be the case.
No international draft, but int’l signings are said to be capped to 5-6M per team per year.
— Jon Heyman (@JonHeyman) December 1, 2016
Was also told that roster size won’t change at all. Remains at 25 before Sept. 1, and at 40 after Sept. 1.
— Jayson Stark (@jaysonst) December 1, 2016
The largest change will be to free agency. Beginning in the next offseason, MLB will get its first taste of NFL-esque unrestricted free agency, which it has long avoided. Currently, when a team signs a free agent who was given and rejected a qualifying offer, that team must surrender a first round draft pick. Under the new labor agreement, that draft pick compensation will no longer exist.
. @MLB teams will no longer forfeit first-round pick to sign free agents under new CBA, source says.
— Jon Morosi (@jonmorosi) December 1, 2016
The qualifying offer system never truly worked with the draft pick compensation attached; indeed, no player had ever accepted one until last offseason. While it purported to protect poorer teams that could not outbid richer ones for their own free agents, all it served to do was hamstring the players at the bargaining table. If a player did accept the offer, he risked losing money on the open market. If he refused it, the draft pick compensation limited his attractiveness to other teams and cost him money in whatever deal he eventually signed. Dexter Fowler and his saga with the Baltimore Orioles and the Chicago Cubs last year is perhaps the prime example of this.
Commissioner Rob Manfred expressed confidence in the week leading up to the deadline that a deal would be reached. After perhaps the greatest, and certainly the most lucrative, World Series in recent memory, any threats of a work stoppage were probably overblown. Once the deal is ratified, the offseason will proceed normally.
UPDATE 12/1/16:
According to an AP report early Thursday morning, under the new CBA the All-Star Game will no longer determine home field advantage in the World Series. Instead, home field advantage will go to whichever pennant winner finishes the regular season with the better record.
In addition, the 15-day disabled list has been replaced with a 10-day disabled list.
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