Breaking Down the New MLB CBA

Michael Ginnitti
Michael Ginnitti, Managing Editor & NFL/MLB ExpertMarch 11, 2022
© USA TODAY Sports

Minimum Salaries

The minimum salary in MLB for the 2021 season was $570,500, by far the lowest in all of the big four American sports. The new CBA addresses this undervaluation:

2022: $700,000
2023: $720,000
2024: $740,000
2025: $760,000
2026: $780,000

Not only have the salaries increased, but the annual increase in each year of this CBA has grown as well. From 2017-2021, the minimum salary went from $535,000 to $570,500, a 6.6% increase versus what will now be north of 11%.

Note: The $700,000 minimum salary still ranks last among the Big 4 for 2022
NBA: $925,000; NHL: $750,000; NFL: $705,000; MLB: $700,000

Minor Leaguers with major league contracts also see a strong increase in their base pay. First year players saw a minimum salary of $43,000 last year, with all other minor leaguers on a $93,000 pay grade. That now increases to:

2022: $57,200; $114,100
2023: $58,800; $117,400
2024: $60,300; $120,600
2025: $62,000; $123,900
2026: $63,600; $127,100

 

The Competitive Balance Tax

New Thresholds (Maximums)
The 2021 season held a $210,000,000 threshold for team tax salaries. This was one of the biggest battles throughout the negotiation process, but the final numbers ended up at:

2022: $230M
2023: $233M
2024: $237M
2025: $241M
2026: $244M

The tax threshold jumps up 9.5% immediately per the new CBA, but offers just 1.3%-1.4% increases annually from there (despite the minimum salary increasing at nearly 3%, like any normal working wage should).

Tax Tiers & Payer Rates
Teams that go over the tax threshold are now subject to four tiers (previously three) that dictate how they’ll be billed accordingly. Simply, every $20M a team goes over, the more they’ll be billed. And going over in subsequent years will mean even more pain (despite the fact that only 2-3 teams per year have been going over the threshold at any capacity).

Tier 2022 amount 1st-time payor 2nd-time payor 3rd-time payor
1st threshold (x) $230M 20.0% 30.0% 50.0%
2nd threshold (x + $20m) $250M 32.0% 42.0% 62.0%
3rd threshold (x + $40m) $270M 62.5% 75.0% 95.0%
4th threshold (x + $60m) $290M 80.0% 90.0% 110.0%

 

The $50M Pre-Arbitration Bonus Pool

This was one of the bigger new asks from the MLBPA, and the resulting plan is both well thought out, and effective for the game’s current model.

In short, Pre-Arbitration represents a player’s first three seasons of service time in MLB. For the most part these players are earning, or slightly above, the league’s minimum salary. With this pool, players who well outperform these salaries will now be compensated via bonuses after the season (throwing a bit of a wrench into some of these team’s CBT calculations I imagine).

Pre-Arbitration Bonus Allocations


League MVP or Cy Young

  • 1st: $2.5M
  • 2nd: $1.75M
  • 3rd: $1.5M
  • 4th-5th: $1M


Rookie of the Year

  • 1st: $750,000
  • 2nd: $500,000


All-MLB Selection

  • 1st Team: $1M
  • 2nd Team: $500,000


WAR
The rest of the bonus pool will be allocated to the Top 100 WAR players in a given season (actual allocation breakdown to be confirmed by 7/1/22).

Note: If a player qualifies for two of these bonuses, he will only be awarded the highest possible payout. So Vlad Guerrero JR. winning rookie of the year ($750k), but also being selected to 1st-team All-MLB ($1M), would negate his ROY payment.

 

Arbitration

Contracts for all arbitration-eligible players will now be guaranteed, perhaps putting a bit more onus on extended these players to a multi-year contract versus just the one year tender.

 

Service Time Adjustments

While the 6 year requirement before free agency wasn’t addressed, a few small tweaks were built in to help a small percentage of players progress toward a payday.

  • Pre-arbitration players who finish 1st or 2nd in Rookie of the year voting will automatically receive a full year of service (1.0), regardless of when those players were called up during that season.
  • Teams who promote their top prospects for Opening Day (Pete Alonso with the Mets) will be rewarded with additional compensatory draft picks for their gesture.

 

Minor League Option Limits

Prior to this new CBA, MLB players were offered three seasons with “options”, essentially allowing a team to move to and from the minor leagues an unlimited amount of times within those three years.

While the three option seasons remain, there’s now a 5-move limit on how many times a player can be sent down. After 5 demotions, a player will need to pass through waivers in order to be sent down for the remainder of that season.

 

MLB Amatuer Draft Lottery

Essentially the only change implemented to improve “competitive imbalance”, the MLB Draft will no longer be ordered solely based on a team’s record from the previous season.

The first 6 selections in each draft will be determined by a lottery (essentially ping pong balls), allowing all 18 non-playoff teams a chance to vie for these picks. The percentage at which these 18 teams will be weighted (more ping pong balls) will be based on their previous year winning percentage.

1: 16.5% 7: 5.5% 13: .9%
2: 16.5% 8: 3.9% 14: .7%
3: 16.5% 9: 2.7% 15: .62%
4: 13.25% 10: 1.8% 16: .48%
5: 10% 11: 1.4% 17: .36%
6: 7.5% 12: 1.1% 18: .23%

Once the 6 picks are chosen via lottery, the remaining draft order will be set based on previous year winning percentage.

Also of note, the amateur draft will revert back to 20 rounds, and slot values (signing bonuses) will have annual increases after a two year hiatus due to the pandemic.

 

Expanded Playoffs

The MLB Postseason is expanded from 10 teams to 12 teams, effective immediately. A few notable takeaways:

  • 163rd Game Tiebreakers are dead. Playoff spot tiebreakers will be decided based on a “system”, likely pulling from strength of schedule, divisional wins, run differential, etc…
  • Wild Card Games are now a Wild Card Series. The Top 2 overall teams in each League get a Wild Card bye. From there, the 3rd seed plays 6, 4th seed plays 5 in a Best-of-Three series. The higher seed will host every game in this round.
  • There will be no re-seeding when we get to the Divisional Round. The 1st seed will play the winner of the 4 / 5 matchup, and the 2nd seed the winner of the 3 / 6 series.

 

Roster/Schedule Changes

Universal DH
As expected, the Designated Hitter is now in place in both leagues, which should not only help NL batting averages rise, but also elongate a few more careers per year.

Roster Sizes
Roster sizes will remain at 26 players until September, at which time an extra two players will be added. Note: It should be assumed that for 2022, roster sizes may be adjusted to accommodate the expedited schedule.

Rule Changes
Though items like the pitch clock, banning shifts, etc…have not been immediately implemented, the opportunity for them to be has been expedited. Starting in 2023, a committee of active players, MLB execs, and an umpire will be tasked with considering gameplay alterations. Any change can be made effective within 45 days of notice to the MLBPA.

Doubleheaders & Extra Innings
Doubleheaders will be 9-inning games again, and extra inning games will no longer start with a runner at second base.

Games Schedule
Starting in 2023, the schedule will feature fewer divisional games, and every team will play at least one series against every other opponent, including in the other league. The exact format is still being determined.

 

The International Draft

This issue has been tabled for now, with a July 25th, 2022 deadline in place to negotiate its future. The negotiation will be VERY important from the player’s perspective for a few reasons:

  • International players do not want this at all. The opportunity for dozens of players to receive a bonus and at least get a shot to make a camp tryout will be extinguished, as the draft will likely only offer this opportunity to a select few. There’s also a major concern that international communities simply do not have a structure in place to prepare for this type of formal process.
  • If the MLBPA does not agree to implement the International Draft, then the current draft pick compensation tied to qualifying offers will remain in place, further jettisoning star player’s chances are getting the best deal possible in free agency.

Top