After a certain amount of concern over a possible lockout by owners over the lack of a collective bargaining agreement that was due to expire December 1, both sides – Major League Baseball and the MLB Players Association – reached a tentative agreement to a new CBA.
MLB released the news and added that both parties were continuing the completion of the remainder of the agreement.
Sources close to the situation have said that the new agreement will include a threshold for luxury tax that starts at $195 million in 2017 and will gradually increase to reach a maximum of between $210 million and $215 million prior to deal ending after a period of five years.
It has also been reported that a higher penalty of between 60% and 70% will be imposed against teams that have a payroll in excess of $250 million. The just ended CBA included a penalty of just 50%.
Major League Baseball and its players have gone for 21 years without any serious strife with labor.
Between 1972 and 1995, there were eight individual work stoppages, including a labor dispute in 1994-94 that led to the 1994 World Series being cancelled, as well as limiting the following season to just 144 games during the regular season.
In late November, it was reported that members on both sides were beginning to worry that a lockout could take place due to the frustration by the owners over the slow pace of CBA negotiations and that two key parts of the negotiations still had both sides far apart in agreeing.
Owners offered a resolution to two of the issues where they did not agree with the Players Association, by offering an exchange, telling players that they would eliminate direct compensation with a draft pick in free agency in exchange for the implementation of a draft for international players, said sources close to the negotiations.
However, the players rejected that proposal, as they did not want anything to do relative to a draft of international proportions.
Another source close to the negotiations said that MLB teams would not have to give up a pick in the first round to sign a free agent who receives a qualifying offer.
The same source added that draft compensations would not go away completely, as teams that are over the threshold for luxury tax would lose a draft pick in the second as well as fifth round, while teams that are under that would lose a pick in the third round.