Tentative contract agreed by MLB players, owners
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[December 01, 2016]
(Reuters) - Major League
Baseball (MLB) averted its first labor glitch in two decades,
announcing on Wednesday that it had reached a tentative five-year
labor agreement with the Players Association subject to ratification
by both parties.
The previous collective bargaining agreement (CBA) was to expire on
Dec. 1 and a failure to reach a new agreement would have marked at
least the temporary end of uninterrupted labor peace since the
disruptive players' strike of 1994.
MLB said representatives of the owners and players, who have been
negotiating in Irving, Texas would continue to draft the entirety of
the tentative agreement and that specific terms would be made
available when the process was complete.
The new CBA would run through 2021.
With a midnight deadline looming some four hours away, negotiators
from both camps emerged visibly pleased and shook hands in public
view before MLB made the official announcement.
Had a deal not been reached, both sides would have had to agree to
an extension or the owners could have imposed a lockout that would
have frozen trades and free agent signings, and benefits to players.
Among the thornier issues that had to be resolved were the
possibility of an international draft, roster sizes, ways to reduce
wear and tear on players in the 162-game schedule and changes to
both the luxury tax and compensation to teams losing free agents.
A labor action would have been the first since the players' 1994
strike that wiped out the end of the season and the entire
postseason including the World Series and delayed the start of the
1995 campaign.
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After that bitter battle over the owners determination to install a
salary cap, MLB has had 21 years of labor peace which helped spawn a
period of dramatic growth.
A luxury tax was imposed based on a team salary threshold aimed at
reining in the payroll disparity between big-spending teams and
small market clubs, who now also benefit from increased revenue
sharing.
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Revenues soared from $1.2 billion in 1995 to almost $10 billion in
2016, with the average annual salary of players climbing from $1
million to $4.4 million.
Attendance increased, a second wild card playoff team was added in
both the American and National League, richer TV deals were made and
MLB successfully mined the emerging digital market.
Competitive balance has been healthy over the course of the five
years of the previous CBA, with 21 of the 30 teams having reached
the postseason, while small market Kansas City and Cleveland
combined to win the last three American League titles.
(Reporting by Larry Fine in New York; Editing by Andrew Both)
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