May 29, 2012
Inside the 2012-16 CBA: The Luxury Tax Meets the Draft
This is Part 1 of a multi-part series on the latest Collective Bargaining Agreement
On November 22 of last year, Major League Baseball and the MLBPA did something that the NFL and the NBA could not: reached a new labor agreement without a work stoppage. For those that follow baseball’s labor history, it has become a miraculous run. By the time the current five-year Basic Agreement (read here) expires on December 1, 2016, it will have been 21 years of uninterrupted labor peace.
As mentioned, the league and union for the players made their announcement on November 22 of last year, but that was just a memorandum of understanding, not the finalized agreement. It took 183 days for the 2012-16 CBA to be released, and with it, we can now begin digging through the 311 pages of details.
This CBA sees a series of sweeping changes from realignment, changes to interleague play, two additional Wild Card teams, and much more. The biggest change, however, comes to how the Rule 4 Draft: a possible International Draft and with details on how those are to be conducted, namely around the allocation of signing bonuses and draft pick compensation.
Draft Pick Compensation Gets a Major Overhaul
Getting a leg-up on agents, the league asked for (and got) a provision under which drafted players may now only sign minor league contracts. In other words, Stephen Strasburg-type deals are history. This, of course, hasn’t sat well with player agents. As one agent said to me, “The union threw us (agents) under the bus with this (labor) deal.”