Home Business Money Matters Nightengale: Winners, Losers of Baseball’s New Labor Agreement

Nightengale: Winners, Losers of Baseball’s New Labor Agreement

Nightengale: Winners, Losers of Baseball’s New Labor Agreement
The Yankees, sitting in the country’s No. 1 market as America’s marquee team, no longer are required to pay a multiplier in revenue sharing, where they paid an extra 15% more than other teams. Photo: RantSports.com

There is a new collective bargaining agreement, with plenty of new wrinkles, but unless you count the personal chefs now required in each clubhouse, there will be no dramatic changes to the game of baseball as we know it.

The rich will stay rich, the poor will stay poor, the marquee free agents will still financially set every branch of their family tree up for life, and the pitch clock will stay unplugged in the closet.

The New York Yankees, who may be the biggest winners in the new labor agreement, still vowed Thursday to restrain themselves, at least right up until the 2018 free-agent class when they go hog-wild and try to sign everyone from Bryce Harper to Manny Machado. The Los Angeles Dodgers, thanks to severe luxury tax penalties, will still spend like the Dodgers, only shopping at Wal-Mart instead of Neiman-Marcus.

And the Oakland Athletics, with no more subsidies from their rich neighbors, will even be more broke, watching their best players win World Series and MVP awards for other teams.

Oh, there are tweaks. You want to have a $241 million payroll like the Dodgers did last year? Be prepared to pay a 92% luxury tax. You want to gamble $70 million on an almost sight-unseen Cuban prospect? Uh-uh. Those days are over.

You always believed the team with the best record in baseball should have home-field advantage in the World Series instead of the All-Star Game winner. Well, now you got it.

It will take time, of course, to fully digest baseball’s new collective bargaining agreement, with the owners expected to vote on it Dec. 13, but after listening to grumblings by agents, players and owners, it sure looks like the ideal agreement.


Here’s a look at the winners and losers of baseball’s new labor agreement – guaranteeing an unprecedented streak of 26 consecutive years of labor peace.

Winner: The Yankees, where the rich just got richer. The Yankees, sitting in the country’s No. 1 market as America’s marquee team, no longer are required to pay a multiplier in revenue sharing, where they paid an extra 15% more than other teams. Oh, and as a bonus, they get to fully deduct expenses from their new ballpark from its revenue-sharing bill. All, in all, one Yankee official revealed, it could be an annual savings of $15 million to $20 million.

Loser: The Dodgers. If they don’t slash their payroll by the 2018 season, they can be hit with a tax rate of 92% – 50% for being a repeat violator, and a 42% surtax for being at least $40 million over the threshold, which starts at $195 million next year. You’re talking about a potential tax bill of about $70 million. The Dodgers, who want to re-sign free agents Kenley Jansen and Justin Turner, may have to readjust.

Loser: The A’s. They not only are stuck playing in a dump, but now don’t have anyone to pay their mortgage. The A’s, who had been receiving about $34 million in revenue sharing, now won’t get a dime within three years since they reside in one of baseball’s biggest marketplaces. If the A’s, who gift-wrapped Josh Donaldson to the Toronto Blue Jays and Addison Russell to the Chicago Cubs, haven’t been putrid enough in recent years, you ain’t seen nothin’ yet.

Chicago Cubs pitcher Jake Arietta. Photo: http://theclassical.org/
Chicago Cubs pitcher Jake Arietta. Photo: http://theclassical.org/

Winners: Cubs right-hander Jake Arrieta and every other marquee free agent in the Class of 2017. Teams no longer are required to surrender a first-round pick to sign free agents, and can’t lose more than second and fifth-round picks, even if already over the luxury tax. Royals stars Eric Hosmer, Mike Moustakas and Lorenzo Cain will quickly learn how much money is out there for their services. Oh, and, yes, Harper and Machado’s value just soared through the luxury tax ceiling. They are eligible for free agency after 2018.

Loser: Jose Bautista, along with perhaps Mark Trumbo, Ian Desmond and others who rejected the $17.2 million qualifying offer. The CBA came along a year too late for them. Why surrender a first-round pick for these guys now when you can wait a year from now and not sacrifice any draft pick? Players no longer can be subjected to qualifying offers more than once in the new CBA – a stipulation that came a year too late for Desmond. So do these players dare take a one-year deal now, and hit the market again?

Winner: Japan. The Japanese Leagues not only can hang onto their stars until they’re 25 now, but get rich themselves in posting fees. They also may have a nice influx of young talent. Considering that the young Latin amateurs no longer can receive contracts in excess of about $5 million, several agents predict an exodus to Japan where they can hone their crafts, and get the huge payday after proving themselves in Japan.

Shohei Otani. Photo: KYODO
Shohei Otani. Photo: KYODO

Loser: Shohei Otani, Japan’s version of Babe Ruth with his 1.86 ERA and 22 homers. He was tentatively planning to leave Japan and come to the United States after next season. Yet, with the international rules requiring professional players to be at least 25 if they want unrestricted free agency, he will now wait until 2019 when he can hit the $200 million jackpot rather than be limited to a $6 million bonus. It’s possible the rule could be tweaked for Otani with a new posting agreement, but it remains unlikely.

Winner: Established major-league players who got sick of watching teams throw away money on amateur players who turned out to be busts. Say goodbye to those $72.5 million deals that Rusney Castillo got from the Boston Red Sox, and the $31.5 million signing bonus the Red Sox paid to Yoan Moncada. The way the union figures it, the money saved in the amateur market will now be paid to veteran major-league players.

Loser: The international amateur market and its agents who made a killing in free agency. Teams now have the first international salary cap in CBA history, and are restricted from spending more than $4.75 million to $5.75 million a year on foreign amateur players, depending on the market size. The San Diego Padres spent about $35 million alone on international amateur players last season.

Winner: The July 31 trade deadline. Now that teams no longer can receive first-round picks by hanging onto their free agents until the end of the season, there will be a much stronger urge to trade them at the deadline.

Loser: The tanking philosophy. Teams no longer can lose games on purpose for the goal of getting the No. 1 pick, and receiving a huge bump in draft dollars than having the No. 2 or No. 3 pick. The difference between last year’s first pick and third pick was $2.5 million. Those days are over with the slot-money allocations now flattened.

Winner: Foodies. For the first time in baseball history, every home clubhouse must employ a personal chef. The clubhouse attendants will gladly pass their cooking aprons to professionals.

Loser: The All-Star Game. The player spokes, and MLB listened, abolishing the 14-year experiment that the winner of the All-Star Game would determine home-field advantage. Now, home-field advantage will be determined by the World Series team with the best regular-season record. Every winning player in the All-Star Game will instead get cold, hard cash instead of the remote possibility that home-field advantage could directly affect them. We’ll see if it affects the game’s competitiveness.

Winner: Tony Gwynn’s legacy. Gwynn, who died of salivary cancer after using smokeless tobacco during his entire Hall of Fame career, would be thrilled seeing the first ban of smokeless tobacco at the major league level. Veteran players are grandfathered in, so, within 15 to 20 years, there won’t be a soul chewing tobacco in a major-league uniform without risking penalty. Go ahead, call it the Tony Gwynn Rule.

Gwynn, whose family filed a wrongful death lawsuit against a tobacco company, would be proud.

And so would Michael Weiner, the late union executive director who helped mend the ugly wounds between management and players year ago, clearing the way to make this agreement as peaceful as possible.

By Bob Nightengale

This article was republished with permission from the original publisher, USA Today. Follow Bob Nightengale on Twitter and Facebook


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