MLB offers small bump to competitive balance tax in latest negotiations

Yesterday, Major League Baseball set tonight as its latest deadline for a new collective bargaining agreement to preserve a 162-game schedule. The league and Players Association have been meeting throughout the day. The tenor and specifics of those conversations has been kept relatively quiet, although some details have begun to trickle out.

Most notably, Evan Drellich and Andy McCullough of the Athletic report (on Twitter) that the league has offered a small bump on the competitive balance tax. The league is now offering to set the base CBT threshold at $230M in 2022 and would see that figure rise to $242M by the end of a five-year CBA. That’s up $2M in Year One and $4M by 2026 relative to the league’s offer yesterday. Whether the union has moved on the tax today isn’t clear; previously, the MLBPA had sought a $238M figure for the upcoming season that would rise as high as $263M by the end of the CBA term.

That would appear to be a minor move in the players’ favor on the surface, although Drellich cautions the rest of the league’s offer is unclear. Yesterday’s proposal of a $228M base tax marker was said to come with “major strings attached,” and The Athletic reports today that MLB’s offer contains “other issues players are concerned with.”

Without knowing the full terms of the league’s offer, it’s impossible to hypothesize whether the sides are making progress towards any sort of agreement. In addition to the CBT, prominent topics of discussion include the expanded playoff field, the extent of a bonus pool to award excellent pre-arbitration players, and the league’s desire to institute a draft for international amateurs. MLB has also pushed to expedite the process by which it could implement on-field rules changes.

The union agreed last week to give the league authority to more quickly implement a few specific changes — namely a restriction on defensive shifts, larger bases and a pitch clock. However, MLB is seeking broad autonomy to unilaterally implement any on-field rules alteration within 45 days of informing the union. Russell Dorsey of Bally Sports tweeted this afternoon that expedited window was among the conditions attached to the league’s willingness to move the luxury tax upwards (although it’s unlikely to be the only tradeoff).

Dorsey also adds that the league may be targeting some form of “penalty for excessive spending.” What form that would take isn’t clear, although the union adamantly pushed back against the league’s push earlier in negotiations for stricter penalties for teams that exceeded the luxury tax. MLB agreed to take those off the table, but it’s possible the league is hoping to reintroduce something to that effect in exchange for an increase in the thresholds themselves.

Regarding the bonus pool, there was an immediate $50M gap at last check. MLB had offered to allocate $30M annually to that system throughout the term of an agreement. The union sought $80M for that pool in 2022 and wanted that figure to rise by a few million dollars each year thereafter. Dorsey hears the league could be willing to go to $50M on the bonus pool but is tying that to the union signing off on a 14-team postseason. The MLBPA has expressed amenability to a 14-team playoff but would prefer a 12-team system, and it’s not clear MLB moving from $30M to $50M on the bonus pool would be a sufficient enough incentive in the union’s eyes.

The parties continue to discuss these issues in an attempt to close the gap tonight. The league has already canceled the first two series of the regular season. It indicated those games could be made up in the event of an agreement today, but MLB has suggested another week’s worth of games would be scrapped if the parties don’t come to terms in the coming hours.