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November 23, 2011

On the Beat

What Price Labor Peace?

by John Perrotto

Major League Baseball and the Major League Baseball Players Association unveiled the latest collective bargaining agreement yesterday afternoon, and it brings numerous changes, many of them major.

Before we break down the new CBA, though, let's pause and attempt to digest just how remarkable it is that both sides were able to come to an agreement without the slightest trace of rancor. Things have certainly changed from the 1970s, 1980s, and 1990s, when the sides despised each other and refused to cooperate on even the tiniest labor issue, a stance that caused repeated work stoppages.

It is a tribute to MLBPA executive director Michael Weiner, MLB lead negotiator Rob Manfred, and, yes, even Commissioner Bud Selig that both sides can now compromise and put the best interest of the sport at the forefront of all negotiations. While the latest CBA won't please everybody, it is heartening to know that the sport will have had 21 continuous years of labor peace once the five-year contract expires after the 2016 season.

Labor peace may be the norm for the new generation of baseball fans. For those of us who have been around longer, it often seemed that world peace would be achieved before labor peace in baseball.

Now, on to some of the CBA highlights and my thoughts on them:

Free agents who sign minor-leaguer contracts who are not added to opening day roster or are unconditionally released five days prior to the start of the season will receive a $100,000 retention bonus and the right to elect free agency June 1.

This is fair for the marginal player who fails to land a major-league contract in free agency. One of the situations a player fears most is being released on the final day of spring training when the other 29 club have their rosters set, thus being frozen out of finding a major-league job to start the season. This alleviates those concerns.

Starting in 2012, Type A and Type B free agents and the use of the Elias ranking system will be eliminated.

Getting rid of the archaic system is a great victory for everyone, whether you're a sabermetrician or a casual fan.

The current system of draft pick compensation will be replaced with the following system:

 Only players who have been with their clubs for the entire season will be subject to compensation.

A free agent will be subject to compensation if his former club offers him a guaranteed one-year contract with a salary equal to the average salary of the 125-highest paid players from the prior season. The offer must be made at the end of the five-day free agent “quiet period,” and the player will have seven days to accept the offer.

A club that signs a player subject to compensation will forfeit its first round selection, unless it selects in the top 10, in which case it will forfeit its second highest selection in the draft.

The player’s former club will receive a selection at the end of the first round beginning after the last regularly scheduled selection in the round. The former clubs will select based on reverse order of winning percentage from the prior championship season.

This is a much better system on every level. It gives teams a greater chance to retain their free agents and also gives clubs more incentive to try to sign elite free agents, since they won't always have to fear losing a high draft pick. It's a win for everyone.

The Rule 4 Draft, also known as the first-year player draft or amateur draft, will continue to be conducted in June, but the signing deadline will be moved to a date between July 12 and July 18 depending on the date of the All-Star Game.

Drafted players may only sign minor-league contracts.

Each club will be assigned an aggregate signing bonus pool prior to each draft. For the purpose of calculating the signing bonus pools, each pick in the first 10 rounds of the draft has been assigned a value. (These values will grow each year with the rate of growth of industry revenue). A club’s signing bonus pool equals the sum of the values of that Club’s selections in the first 10 rounds of the draft.

Players selected after the 10th round do not count against a club’s signing bonus pool if they receive bonuses up to $100,000. Any amounts paid in excess of $100,000 will count against the pool.

Clubs that exceed their signing bonus pools will be subject to penalties as follows:

Excess of Pool Penalty

 (tax on overage/draft picks)

• 0-5%

75% tax on overage

• 5-10%

75% tax on overage and loss of 1st round pick

• 10-15%

100% tax on overage and loss of 1st and 2nd round picks

• 15%+

 100% tax on overage and loss of 1st round picks in next two drafts

Proceeds generated by the tax will be distributed to payee clubs under the revenue sharing plan that do not exceed their signing bonus pools. Draft picks that are forfeited by clubs will be awarded to other Clubs through a lottery in which a club’s odds of winning will be based on its prior season’s winning percentage and its prior season’s revenue. Only clubs that do not exceed their signing bonus pools are eligible for the lottery.

Competitive Balance Lottery

For the first time, clubs with the lowest revenues and in the smallest markets will have an opportunity to obtain additional draft picks through a lottery.

The 10 clubs with the lowest revenues and the 10 clubs in the smallest markets will be entered into a lottery for the six draft selections immediately following the completion of the first round of the draft. A club’s odds of winning the lottery will be based on its prior season’s winning percentage.

The eligible clubs that did not receive one of the six selections after the first round and all other payee clubs under the revenue sharing plan will be entered into a second lottery for the six picks immediately following the completion of the second round of the draft. A club’s odds of winning the lottery will be based on its prior season’s winning percentage.

Picks awarded in the Competitive Balance Lottery may be assigned by a club, subject to certain restrictions.

The top 200 prospects will be subject to a pre-draft drug test and will participate in a pre-draft medical program.

Selig says the major revamping of the draft is to help small-market clubs be more competitive. That is hard to fathom when the Pirates and Royals, two of the smallest of the small-market franchises, have used the draft and over-slot spending as their primary means of overhauling ailing farm systems. The draft was the one place small-market clubs had a chance to compete with the big-money franchises, and they have now lost that advantage.

I do like the idea of being able to trade the supplemental lottery picks. It's a nice new wrinkle, but MLB should go one step further and allow clubs to trade all of their draft picks. If the small-market clubs can no longer benefit by spending in the draft, at least they could gain something by having the option of trading their picks or receiving additional selections in deals.

Players, managers, and coaches will be prohibited from using smokeless tobacco during televised interviews and club appearances. In addition, at any time when fans are permitted in the ballpark, players, managers and coaches must conceal tobacco products (including packages and tins), and may not carry tobacco products in their uniforms or on their bodies. Individuals who violate the policy will be subject to discipline. The parties also agreed upon an extensive program of education and public outreach regarding the dangers of smokeless tobacco.

The parties agreed on a program of mandatory evaluation by a trained professional for players who are suspected of an alcohol use problem (including players who are arrested for DWI or other crimes involving alcohol), and for players who are arrested for crimes involving the use of force or violence.

The parties agreed that no new players will be permitted to use a low density maple bat during the term of the agreement.

By 2013, all major league players will wear a new batting helmet developed by Rawlings that protects against pitches thrown at 100 mph. The new version of the helmet is significantly less “bulky” than prior versions of the more protective helmet.

The concussion policy that was implemented prior to the 2011 season has been improved and will remain in effect for the duration of the basic agreement

It's hard for any right-thinking person to disagree with any of this. I chewed tobacco for 20 years, beginning as a freshman in a high school. I can say from experience that it is a vile habit, and I feel blessed that it did not result in any health problems. The sooner maple bats are eliminated and the new high-impact batting helmets are made mandatory, the better, because I have long feared that a death on the field might be the only way to get legislation passed on either piece of equipment. And, no, I'm not trying to be overdramatic by writing that.

Beginning in spring training 2012, all players will be subject to hGH blood testing for reasonable cause at all times during the year. In addition, during each year, all players will be tested during spring training. Starting with the 2012-13 offseason, players will be subject to random unannounced testing for hGH. The parties have also agreed on a process to jointly study the possibility of expanding blood testing to include in-season collections.

The players agreed to this with almost no resistance during the negotiations, and I applaud them for that. Giving a blood sample is never fun, and I could only imagine how bothered I would be if a lab technician showed up unannounced at my home and wanted to stick a needle in my arm. However, the players are adamant that they want the fans to know that they are clean and that the game is on the up-and-up.

John Perrotto is an author of Baseball Prospectus. 
Click here to see John's other articles. You can contact John by clicking here

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