The official release from Major League
Baseball:
Commissioner Allan H. (Bud) Selig and
Major League Baseball Players Association Executive Director Donald Fehr jointly
announced that MLB and the MLBPA have
agreed to a five-year labor contract
that will allow play to continue
uninterrupted through the 2011 season.
The termination date of the new Basic
Agreement is December 11, 2011. The
five-year contract is the longest labor
contract in baseball history. By the
end of the contract, baseball will have
gone 16 years without a strike or
lock-out, the longest period of labor
peace since the inception of the
collective bargaining relationship.
"This is an historic agreement for
Major League Baseball and is emblematic
of the spirit of cooperation and trust
that now exists between the clubs and
players," said Commissioner Selig. "We
are in the midst of baseball's Golden
Age. More than 76 million fans attended
our games this season, setting an
attendance record for the third
consecutive year, and we produced $5.2
billion in revenue, which more than
quadruples our revenue total of 14 years
ago. The new Basic Agreement assures
labor peace into the next decade and
gives us the opportunity to expand the
Golden Age and continue to grow the
game in all ways unimpeded by internal
labor conflicts."
Fehr said: "I share the Commissioner's
view that over the last 10 years our
game has experienced enormous growth.
This new agreement will permit that
growth to continue uninterrupted. We
were able to conclude these new agreements
before the expiration of the current
contracts because the two parties brought
to the table, along with serious concerns,
a respect for the positions and needs
of the other. As a result, the discussions
were workmanlike and pragmatic, and, while difficult on some issues, the talks were
conducted in a mutual attempt to get the
job done.
"I want to thank all of the Players for
their involvement and support during this
process, especially those on the
negotiating committee, without whom we
would not be here today," Fehr continued.
"Nearly 100 players participated in
negotiating meetings, and many times that
number in internal discussions. I would
also like to acknowledge the MLBPA staff
for its efforts. Finally, on behalf of
the players, I would like to express our appreciation to the members of the
Commissioner's negotiating team for
all of their hard work."
Commissioner Selig added: "I appreciate
the effort that representatives of both negotiating teams devoted to finalizing
the agreement in such a timely manner.
I would also like to thank the club representatives of Major League Baseball's negotiating team - Larry Dolan of the
Cleveland Indians, Peter Angelos of the
Baltimore Orioles and Andy MacPhail,
formerly of the Chicago Cubs - for their
hard work and for sacrificing so much
time on behalf of the game."
Summary of MLBPA-Major League Baseball
Labor Agreement
Term
1. Five-year labor contract.
2. Termination date - December 11, 2011.
Revenue Sharing
1. Net transfer of revenue sharing plan
will be the same as the current plan
($326 million in 2006). Net transfer
amounts will continue to grow with
revenue and changes in disparity.
2. Marginal tax rates for all recipients
are reduced significantly through the
use of a new central fund re-
distribution mechanism. Rates
reduced to 31% from 40%
(high revenue Clubs) and 48% (low revenue
Clubs) under old agreement.
3. All Clubs face the same marginal
rate for first time.
4. Commissioner's Discretionary Fund
will continue at $10 million per year,
with cap of $3 million per Club per
year.
5. Provision requiring revenue sharing
recipients to spend receipts to improve
on-field performance retained with
modifications.
Competitive Balance Tax
1. Competitive Balance Tax structure
from 2002 agreement is continued.
2. Rates will continue at 22 ? % for
Clubs over the threshold the first
time, 30% for Clubs over the threshold
the second time and 40% for Clubs over
threshold the third time. 3. Clubs
that paid 40% in 2006 will face 40%
rate in 2007.
4. Thresholds reset to $148 million
in 2007, $155 million in 2008, $162
million in 2009, $170 million in 2010
and $178 million in 2011.
The Debt Service Rule
1. The Debt Service Rule from 2002
agreement retained with modifications.
Amateur Draft
1. Clubs that fail to sign first or
second round draft pick will receive
the same pick in the subsequent draft
as compensation. Club that fails to
sign a third round pick will receive
a sandwich pick between rounds three
and four in the subsequent draft as
compensation.
2. Period of time before a Player must
be protected from the Rule 5 Draft is
changed from three or four years from
first minor league season to four or
five years from year of signing.
3. Signing deadline of August 15 for
draft picks other than college seniors.
Draft Choice Compensation
1. Type C free agents eliminated in
2006
2. Also in 2006, compensation for type
B players becomes indirect (sandwich
pick) as opposed to direct compensation
from signing Club.
3. Effective 2007, Type A players limited
to top 20 percent of each position (down
from 30 percent) and Type B players become
21 percent - 40 percent at each position
(rather than 31 percent - 50 percent).
4. Salary arbitration offer and acceptance
dates move to December 1 and December 7.
Benefit Plan
1. Players Benefit Plan continued with
maximum allowable benefit under IRS
rules.
2. $154.5 million average annual
contribution.
3. Improved benefits for some retired
players.
Minimum Salary
1. Major League: $380,000 in 2007,
$390,000 in 2008 and $400,000 in 2009,
COLA in 2011.
2. Minor League: $60,000 in 2007,
$62,500
in 2008, $65,000 in 2009.
3. New minimum for first time roster
players of 50% of minor league minimum.
4. Maximum cut rule applicable to split
contracts reduced to 60% from 80%.
Free Agency
1. Eliminate December 7, December 19,
January 8 and May 1 deadlines for free
agents.
2. Tender Date - December 12
3. Eliminate right to demand a trade
for all new multi-year contracts.
Other
1. Home-field advantage in World Series
to League that wins the All-Star Game.
2. Drug program continues.
3. Settlement of 40 plus grievances
and disputes.
4. No contraction during term of agreement.