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It’s that Time of Year Again…with Some Minor Changes
The New CBA and What it Means for the Future of MLB
jrb368@cornell.edu
| February 23, 2012
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Groundhog Punxsutawney Phil may have signaled an additional six weeks of winter when he saw his shadow this month; however, good thing baseball doesn’t fall victim to folklore.

 

Yep, it’s that time of year again: Spring Training, and it certainly comes with plenty of uncertainties for many teams.  What makes this upcoming season a bit more interesting though is that the offseason featured the signing of a new five-year labor deal between MLB players and owners.  The collective bargaining agreement makes changes owners hope will increase competitive balance by pressuring large-market teams to rein in spending.

Other provisions of the new contract include:

 

·         Random testing for HGH (Human Growth Hormone) will take place during spring training and the offseason, with the a 50-game suspension for testing positive; this makes baseball the first North American professional league to start blood testing on human growth hormone

 

·         More video replay to possibly include fair-or-foul calls and fan interference

 

·         Longer All-Star break from three to four days, and participation is mandatory

 

·         Additional two teams in the playoffs starting this season or next that would put 10 of the 30 teams in the postseason; the two wild card teams in each league will meet in a playoff, and the winner will advance to the division series

 

·         A ban on players getting tattoos with corporate logos

 

·         Possibility of players wearing microphones during games

 

·         Players must give advanced notices if they wish to switch uniform numbers while remaining on the same team

 

·         Players are assured single rooms during spring training

 

·         In 2013, the Houston Astros will move from the NL Central to the AL West, leaving each league with three five-team divisions

 

·         Luxury tax on payrolls being left at $178 million in each of the next two seasons, and rising to $189 from 2014-2016; putting pressure on high-spending teams not to raise their spending even more

 

·         New “competitive balance lottery” that gives small-market teams extra selections in the amateur draft

 

·         Portion of players with 2-3 years of major league service who are eligible for salary arbitration will rise from 17% to 22% starting in 2013

·         Minimum salary reaches $500,000 mark in 2014, and then there will be cost-of-living expenses in both the following two years

 

 

·         Prohibition on “taxi squads” – calling up players from the minors and not activating them

 

There are also new regulations on player conduct, such as:

 

·         Betting with illegal bookies on any sport

 

·         Commissioner being able to discipline players for violating federal, state, or local law or for conduct that is detrimental to the best interests of baseball

 

·         Possible suspensions for intentionally throwing equipment at non-uniformed personnel; fighting with umpires or fans; or making public statements that question the integrity of the umpires, the commissioner, or the game

 

·         Violating the league’s social media policies

 

The highlight of the new CBA is the divisional realignment that will move the Houston Astros into the AL West.  Two 15-team leagues has now allowed for the expansion of the playoffs.  Also, the burdensome free agent restrictions are no more: rather than have to forfeit a draft pick for each free agent, compensation will only be awarded based on the circumstances.  The new deadline for signing draft picks is now between July 12 and July 18, which allows for top draft picks to have the opportunity to make their professional debut during the same season.  Finally, the clubs with the lowest revenue in the smallest market will have the chance to obtain one of six additional bonus draft picks.

 

The major con of this deal, however, is the restriction placed on the amount of money that teams can spend on their draft picks (the draft-pick compensatory structure).  The CBA has instituted penalties for exceeding the recommended slot value.  For example, if a team exceeds the recommended slot by up to 5% must pay a 75% tax on the overage, and if a team spends 15% over slot, they will face a 100% tax and will lose their first-round pick in two subsequent drafts.  As a result of these restrictions, small market teams (like the Royals) will be at a disadvantage by not being allowed to pay big bucks to sign their top draft picks.  Originally, teams like the Royals would receive compensatory draft picks once these players signed contracts elsewhere; however, this strategy is now outdated with the new draft-pick compensatory structure.

 

With restrictions on international signings as well, this may lead to more money in the hands of the owners.  Also, teams may begin to decline offering salary arbitration with the increase in arbitration eligibility since they won’t be able to afford the pay increases.

 

The biggest changes to pay attention to in the upcoming years will be the realignment and playoff structure that seek to equal the playing field for the 30 teams.  It will be interesting to see how the changes affect, not only the business behind the game, but the game itself.

Opening Day: April 4, 2012 at 7:05 PM!

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