Major League Baseball labor agreement details
NEW YORK (AP) — Details of the memorandum of understanding agreed to Thursday by Major League Baseball and the Major League Baseball Players Association, as obtained by The Associated Press.
FREE AGENT DRAFT PICK COMPENSATION
MLB and MLBPA agree to eliminate direct amateur draft-pick compensation, which had existed since 1976 and been in place for qualified free agents since 2012, pending an agreement on an international amateur draft.
A team losing a free agent would receive draft-pick compensation based on revenue-sharing status and whether a club had been over the luxury tax threshold. For a free agent who had spent the entire season with one team, there would would be four compensation tiers based on:
— $25 million in guaranteed salary or $18 million average annual value (AAV) (third round pick for revenue sharing payee)
— $55 million or $23 million AAV (Comp B pick for revenue sharing payee, third round for non-payee or team that did not pay luxury tax)
— $100 million or $30 million AAV (Comp A pick for revenue sharing payee, Comp B pick for non-payee or team that did not pay luxury tax, third round pick for team paying revenue sharing)
— $150 million or $40 million AAV (Comp A pick and third round pick for revenue sharing payee, Comp A pick for non-payee or team that did not pay luxury tax, Comp B pick for team paying revenue sharing)
PRE-ARBITRATION BONUS POOL
A new bonus pool established for those not yet eligible for arbitration, who will split $50 million, which will count equally among the 30 teams for the luxury tax. Allocation based on WAR determined by a management-union committee.
An eligible player would receive $2.5 million each for MVP or Cy Young, $1.75 million for second and $1.5 million for third. Fourth or fifth would earn $1 million along with making the all-MLB team, while Rookie of the Year would get $750,000 and second place $500,000, along with making the all-MLB second team. A player can earn only one award in a season and would get the highest bonus he has earned. Any bonus pool money not earned for those awards would be distributed to the 100-highest-ranked by WAR among eligible players. Bonuses are payable by Dec. 15.
A full year of major league service will be credited to players who finish first or second in Rookie of the Year voting in each league by the Baseball Writers’ Association of America, as long as they are among the top 100 prospects by two or more of Baseball America, ESPN.com or MLB.com and did not spend the full season on the big league roster. The top prospects who finish top three in Rookie of the Year or top five in Cy Young or MVP earn teams additional draft picks. The union has the abliity to eliminate this provision during the agreement.
PROSPECT PROMOTION INCENTIVE