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What's Inside Baseball's New Collective Bargaining Agreement?

Baseball’s long winter of angst and infighting has been defeated by the sweet sounds of summer at all 30 Spring Training Camps. After 99 days of an owner-imposed lockout, a new five-year collective bargaining agreement was reached. The new labor agreement was ratified by the union by a vote of 26-12, with 20 votes being required for passage. Notably, all eight members of the executive subcommittee voted against the deal. The owners of all 30 Major League clubs voted in favor of the deal. The deal itself is over 100 pages long and lays out many of the procedures by which the business of baseball is conducted.

One of the primary goals of the Players Association was to secure a better livelihood for players with less than three years of MLB service time. The new CBA immediately raises the league minimum salary from $570,500 to $700,000. This 22.7% increase is the largest created by a new CBA in almost 20 years. The new CBA also establishes a $50 million bonus pool for 100 players who have yet to obtain the necessary years of service to enter arbitration. The pool will send large paydays to the standout young stars that carry the load for their clubs and make the game entertaining. Travis Sawchik of The Score estimates that pre-arbitration players will receive $115 million more in 2022 than in 2021.

In another key victory, the Players Association also managed to secure a higher upper limit for the competitive balance tax. The threshold moves from $210 million to $230 million. Unfortunately, the Players Association was unable to establish a competitive balance tax threshold on the bottom end of the pay scale. The union originally sought to implement this sort of reverse luxury tax to improve the salaries of mid-level players and the competitive balance of the league.

This lack of a soft salary floor is a major victory for baseball’s cheapest clubs. Without a floor, these clubs can continue to slash payroll and field non-competitive rosters. The Baltimore Orioles, Cleveland Guardians, and Pittsburgh Pirates sat at a 2022 payroll below $40 million as of March 11. Since then, the Cincinnati Reds and Oakland Athletics began clearance sales, shipping out high-priced talent at the drop of a hat. This CBA contains no mechanism to require teams to spend money. Therefore, these low-spending clubs that have no desire to be competitive will not field-winning teams. The Players Association failed to ensure competitive balance and an end to tanking.

In another win for most owners, the deal includes a new penalty for teams who surpass the competitive balance tax threshold by $60 million or more. Referred to as the “Steve Cohen tax,” this threshold ensures that cheaper owners are not forced to spend more money by their aggressive counterparts who reach deep into their pockets.

Besides the financial procedures changed by this CBA, the deal also paves the way for numerous on-the-field changes. Perhaps the most visible change made by the CBA is an expansion of the postseason. The owners have long pushed for expanding the playoffs and finally received their wish, securing a 12-team postseason beginning in 2022. Under the newly agreed-upon system, the two division winners with the best record in each league are given byes in the first round. The last division winner and three Wild Card clubs contest three-game series to advance to the Divisional Series. The worst division winner matches up with the worst Wild Card while the top two Wild Cards play each other. The remainder of the playoffs remains untouched. This new round is estimated to be worth $85 million for the league through its TV deal with ESPN.

The new format is not without opposition, however, as it diminishes the importance of the regular season and makes more clubs competitive in their current state. The regular season is now far less important, as teams who simply get to 85 wins could find themselves playing for a World Championship. Furthermore, middle-of-the-road teams are now able to spend less money to make themselves competitive enough to secure a Wild Card spot.

Another notable change is that the National League will now permit designated hitters to be used. Major League Baseball experimented with this rule in 2020, and it appears to have been a point of very little contention from both sides. This change alters how teams construct their rosters, as teams looking to compete are more likely to hold multiple starting-caliber hitters at a position. No other significant on-the-field rule changes for 2022 are made by this deal. However, it paves the way for multiple fundamental changes in 2023.

The CBA creates provisions for a committee to convene to evaluate potential changes to the game. Potential changes that have been floated include pitch clocks, reducing defensive shifts, using bigger bases, and creating an automated strike zone. All of these alterations to the game have been long-rumored and proposed by more modernist thinkers in the game. Rob Manfred has long pushed for shorter games with increased offense and views these ideas as innovative ways to accomplish those goals.

In another change, the CBA will put an end to rotating interleague play in 2023. Under the new system, teams will now play 56 games against their division mates within four series against those clubs. Teams play 60 games against the other 10 teams in their league, spread across two three-game series. Four games are contested against rivals defined by historical or geographical similarity, two at home and two on the road. Finally, teams play one three-game series against each of the 14 teams in the other league. While this new schedule wrecks conventional thinking about baseball scheduling, it does provide a much more balanced schedule and a more genuine view of every club’s play.

The CBA also ends the practice of playing tiebreaker games to decide ties for playoff seeding or spots. The league now breaks these ties with a lengthy mathematical formula, as opposed to the classic Game 163. These tiebreaker games are being abandoned to accommodate the new 12 team playoff.

Additionally, the commissioner is granted the right to schedule the annual trade deadline to occur anytime between July 28 and August 3 under the new CBA. Traditionally, the deadline has been on July 31st. However, concerns have been raised about years when the deadline falls on the weekend. Clubs were eager to eliminate the logistical issues posed by players involved in day games being traded and saw a moveable deadline as the best possible solution.

Changes were also made to the MLB draft, as draft orders will now be set with a lottery system, much like the one employed by the NBA. Picks 1-6 will now be determined by a lottery, with the remaining selections assigned by record and postseason finish. Proponents of the lottery claim it will discourage tanking, as the team finishing with the worst record now only has a chance at the top pick, not a guarantee. Baltimore, Cincinnati, Cleveland, Oakland, and Pittsburgh are already showing that in reality, MLB’s draft lottery will stop tanking as much as the NBA’s has.

In another major change, players may now only be optioned to the minor leagues 5 times within a season. A sixth trip to the minors results in the player having to clear waivers. This change represents a minor victory for the Players Association, as it does provide a quality-of-life improvement for 4A players.

This new collective bargaining agreement is wide-ranging and contains many exciting new provisions. While its ratification is ultimately a win for baseball, the sport also suffered massive losses over the past few months. Fans around the country have become less enthusiastic and excited about Major League Baseball throughout the lockout. The MLB can only hope that these fans return to the sport when the first pitch is thrown on April 7. And while the changes proposed by this CBA look to change the game for the better, only time will truly tell the results of baseball’s new labor deal.


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