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Unlike other major sports in America in recent history, Major League Baseball has gone through fairly smooth and undramatic negotiations for their collective bargaining agreement. There were some minute concerns that the CBA would not be completed before the Winter Meetings were to start on Sunday. The last time MLB experienced a work stoppage was in 1994.
Source: CBA is done.
— Ken Rosenthal (@Ken_Rosenthal) December 1, 2016
Once ratified, new CBA will stretch MLB record of labor peace to 27 years. a DiMaggio-like streak
— Jon Heyman (@JonHeyman) December 1, 2016
There were plenty of hot topic issues such as an international draft, draft pick compensation related to the qualifying offer system, the luxury tax and others. As more details come out, I will continue to post updates.
Qualifying Offers
Source on draft-pick comp: "Still being discussed. Trying to shuffle around loss of first pick with player getting deal of $50M or more."
— Ken Rosenthal (@Ken_Rosenthal) December 1, 2016
. @MLB teams will no longer forfeit first-round pick to sign free agents under new CBA, source says.
— Jon Morosi (@jonmorosi) December 1, 2016
This is good news for small market clubs that depend a lot on the draft and international FAs to get cost-controlled talent and removes a large obstacle that hinders the FA market. However, since the QO system was with the previous CBA in place, the penalty would still be a draft pick to see FAs that declined a QO earlier this month.
Important clarification: Change to FA compensation structure goes into effect for 2017-2018 offseason; prior rules apply to existing class.
— Jon Morosi (@jonmorosi) December 1, 2016
Luxury Tax
Source: Luxury-tax thresholds could rise in something close to this progression over new five-year CBA: $195M, $197M, $206M, $209M, $210M.
— Ken Rosenthal (@Ken_Rosenthal) December 1, 2016
Obviously the luxury tax won't be an issue since the Diamondbacks will be operating at a payroll near $100M, which is about half of the payroll for the luxury tax threshold. The tax number is expected to go up each year, which might be a good thing since it's likely a reflection on the status of league revenue.
Here are a list of the penalties for teams that will go over the threshold since it affects the Dodgers and their $200M+ payroll.
The tax rate for teams exceeding luxury tax: 20% (1st time), 30% (2nd time), 50% (3rd time). For teams going $20M to $40M over,add extra 12%
— Bob Nightengale (@BNightengale) December 1, 2016
And teams that exceed luxury tax threshold by more than $40 million, could find themselves paying as much as 90% in taxes.
— Bob Nightengale (@BNightengale) December 1, 2016
If LA puts up a $250M payroll, they could be paying well over $400M when the luxury tax is included. While MLB doesn't have a hard cap in place, those type of severe penalties should shift competitive balance away from the Dodgers and towards the rest of the division.
International Free Agents
No international draft in the new CBA, as @JonHeyman reported. International signing age will stay at 16.
— Ben Badler (@BenBadler) December 1, 2016
The Diamondbacks will be able to spend freely on the international market since their penalties from signing Yoan Lopez and Yasmany Tomás in the 2014-15 signing period. Teams will have a $5-6M cap in signing bonuses in the international market. The team recently hired a new latin scouting coordinator after the disaster signing period from two seasons ago. Contrary to popular belief, it isn't the big market clubs that have the biggest signing bonus on international free agents.
No international draft, but int'l signings are said to be capped to 5-6M per team per year.
— Jon Heyman (@JonHeyman) December 1, 2016
I'm not sure what the penalties are, but it could be a hard cap where any deal that would go over the cap number would be voided by the league.
Correcting earlier note: Cubans exempt from international pool if they are 25 years old with 6+ years of experience.
— Jon Morosi (@jonmorosi) December 1, 2016
Tomás' contract from the 2014-15 signing period would count under this CBA like it did when they did the signing in the first place. That's one thing the team needs to be wary of when the 2017-18 international signing period begins in July and the penalties from the 2014-15 signing period expire. With the team no longer handicapped in that department, it should be interesting to see how the team plans to add young, but far distant, talent to the organization.
26 Man Roster?
No changes to the rosters in this CBA. Before September, the roster remains at 25 and in September will be 40.
Rosters remain at 25. Players said not to insist on 26th man.
— Jon Heyman (@JonHeyman) December 1, 2016