No cap, but new deal remakes MLB
The notion of a salary cap in Major League Baseball has always been the holy grail for owners and a nonstarter for players.
In the tentative labour agreement reached Wednesday, there was again no salary cap. However, with a series of new and enhanced drags on spending, the owners have come closer than ever to one.
The threshold for the competitive-balance (or luxury) tax will rise in each year of the five-year agreement, going from US$189 million this past season to US$195 million next season, up to US$210 million in 2021. The players pressed for, and won, those increases, arguing rising revenues warranted them.
But those gains had a corresponding cost: The penalties for teams that exceed the threshold reportedly will rise sharply.
Under the old terms, teams that exceed the threshold would never pay a tax rate above 50 per cent. Under the new deal, the highest rate could reach 90 per cent.
Also, instead of an international draft, the owners reportedly got an annual cap of around US$5 million per team on spending on all foreignborn amateurs. What the owners wanted was an end to the massive contracts for primarily Latin players — think Yoan Moncada’s US$31.5-million deal with the Boston Red Sox in 2015. But that rule won’t affect foreign pros — for instance, Japanese players such as the New York Yankees’ Masahiro Tanaka and the Texas Rangers’ Yu Darvish.
What is less clear is how the changes to the free-agent compensation system will affect the marketplace.
Instead of losing a first-round pick for signing a free agent who received a qualifying offer, the signing team’s penalty will be tied to its payroll. A team above the competitive-balance tax threshold would lose two picks — reportedly a second-rounder and a fifth-rounder. Teams below the threshold would lose only a third-rounder.
In 2018, the MLB season will start four days earlier, with four additional off-days spread throughout the season. As well, the All-Star Game will no longer decide homefield advantage in the World Series. Home-field will go to the team with the better regular season record.