Players Propose Pay Increases, Owners Counter with Hard Salary Cap
The MLB Players Association and the league have been meeting in advance of the collective bargaining agreement’s expiration on December 1, and they’ve begun to exchange proposals. While I find this process very interesting and would love to do a deep dive into some of the nuances, there’s still way too much time left before the rubber needs to meet the road. That said, I think it’s a very positive development that they’re already working toward a solution with what seems like very little acrimony.
So far.
The union made its first proposal to the league on Wednesday, with points that included:
- Increasing the competitive balance tax threshold to $300 million
- Raising the minimum salary to $1.5 million, nearly double the current rate
- Imposing a “competitive-integrity tax” on teams that spend less than $150 million
- Free agency for players who are 30 years old with 5+ years of service time
- Changes to revenue sharing that would see teams keep more of their stadium revenues
- Increasing the pre-arbitration bonus pool from $50 million to $180 million
- Doubling the number of Super 2 arbitration players
I want to point out the free agency wrinkle in particular, as reducing the service time by a full year isn’t something owners would embrace. But by adding in the provision that players must also be 30 years old, the union is mainly looking out for those players who didn’t come into their own until their mid-20s.
Also in the proposal is a mechanism for teams to keep those players for a sixth season by offering the average of the top 125 salaries in the league. It’s kind of like a hybrid of the qualifying offer and the NFL’s franchise tag. On the whole, this series of proposals seems very reasonable and is aimed at getting more money to players while also encouraging small- and mid-market teams to spend more of their revenue-sharing proceeds on player payroll.
In its proposal to the union on Thursday, the league led with a hard salary cap of $245.3 million that would be accompanied by a floor of $171.2 million. Based on current projected payrolls, 12 teams would have to spend more to reach the floor and eight would have to cut to get under the ceiling. The Dodgers are roughly $165 million over that hard cap right now, which is almost as much as the proposed floor.
The free-wheeling Cubs are at an estimated $245.1 million this season as Tom Ricketts test-drives the new rules.
A hard cap has been a non-starter for the players, but there’s something to be said for forcing the most frugal teams to double their payroll. The Marlins are at only $84 million this year, and the Guardians are at just $101 million. Having a more equitable distribution of funds might make up for the limitations imposed by a cap.
Speaking of which, the owners also proposed a 50/50 revenue split with players that includes local media. Those figures would be tied to the cap, which would then increase in accordance with leaguewide revenue. That’s better than an arbitrary $4 million per year bump in the CBT threshold, though there’s no room for teams to exceed it.
All in all, this seems like a decent start to what figures to be a protracted — and possibly pitched — negotiation process. More to come as the sides hem and haw over how the next five years of Major League Baseball will operate.
