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June 4, 2012

Bizball

Inside the 2012-16 MLB CBA: Minimum Salaries, the Luxury Tax

by Maury Brown

In Part One of this series on MLB’s new Collective Bargaining Agreement, the focus was on the changes to the draft system. Today, we look at changes to minimum salaries and the soft-cap via a luxury tax on total player payroll.

Each time a new labor agreement is reached in professional sports, there is invariably the question of, “Who came out on top?” You might be able to say the needle swung slightly one way or the other, but in the end the only real winner is “compromise.”

Such is the case with MLB’s latest CBA (read here). While one might say that there are certain aspects that were clear wins for the league, the players got some concessions as well. How big some of those concessions were, however, is debatable.

Increases In Minimum Salary
While there has been constant chatter about the need for a salary floor as much as a salary cap in baseball, the sides have settled the matter with the idea of the minimum salary ostensibly being that “floor.” The latest CBA defines the minimum amount a player can be paid in the majors and in the minors. From page 11 of the latest Basic Agreement:

2012—at the rate per season of $480,000;

2013—at the rate per season of $490,000;