The current collective agreement between MLB and the Players’ Association expires in December, so the two sides have entered early negotiations on a new deal in hopes of avoiding a lockout next season.

The old collective agreement was reached in November 2016 for the 2017 season and beyond, and there has been no lockout for MLB since 1994-95, when there were four stoppages. of work in season over a period of 22 years.

Commissioner Rob Manfred recently played down the tension that has built up between MLB and MLBPA over the past few years – particularly in 2020 – and believes the two sides have a relatively positive relationship.

Economic issues will be one of the main concerns for both sides for the new CBA, as they always are, and the league has already submitted a proposal that would have a drastic change on the teams’ payroll in the future if it is. approved, by Evan Drellich and Ken Rosenthal of The Athletic:

At a face-to-face collective bargaining meeting in Denver on Monday, Major League Baseball made its first proposal covering fundamental economics to the Players Association. The plan included a new team spending tax, which would both lower the first luxury tax threshold in sports to $ 180 million and charge teams that exceed that first threshold a higher percentage than they did. pay today. A compromise, according to those briefed on the league’s proposal, would be a minimum wage of $ 100 million in the sport.

The idea of ​​a minimum salary is something that has gained momentum in recent years, as currently 12 clubs have a payroll of less than $ 100 million, which is hurting the MLB field product.

The proposed plan would also lower the tax threshold from $ 210 million to $ 180 million, and the tax penalty would increase as well. Currently, seven teams, including the Los Angeles Dodgers, have over $ 180 million in payrolls for the 2021 season.

The idea of ​​lowering the tax cap will likely be rejected by the Players’ Association as it would limit player salaries and give more money to the owners of each team despite a record total turnover in 2019, the final season. full league.

MLB is still the only professional sport without a strict salary cap.

Current MLB Tax System

Under the current system, teams only have to pay a penalty tax when they exceed a payroll of $ 210 million, and that number has increased every year since 2017, when the last collective agreement was reached.

A club that crosses the threshold the first time pays a 20% tax on every dollar over $ 210 million and switches to a 30% tax if terminated for two consecutive seasons.

If they go past three or more seasons, the tax becomes a 50% tax until the club drops below the threshold.

The Dodgers have regularly started paying a luxury tax, but have also been careful to avoid doing so for more than three consecutive seasons.

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