The New CBA is Announced: Draft, Free Agency, HGH Testing, Instant Replay Among the Notable Changes

Today Major League Baseball and the Players’ Association announced a new collective bargaining agreement, which will keep the labor peace through 2016. The new deal changes some important areas of the game in dramatic ways, and the changes – and their impact on the Chicago Cubs – will take some time to digest and process.

The notable and important aspects of the new deal (full press release here):

  • Amateur Draft: There are a number of significant changes to the draft. Although there will not be hard-slotting (i.e., Pick No. X gets no more than $Y, no matter what), the ability to spend freely is gone. The draft now works like this: your team gets a “pool” of money, available to spend on signing bonuses on players in the first 10 rounds. If you go over that “pool” amount by 0 to 5%, you’re taxed 75% on the overage. If you go over by 5% to 10%, you’re taxed 75% on the overage AND you lose a first round pick. If you go over by 10% to 15%, you’re taxed 100% on the overage AND lose a first and second round pick. If you go over by more than 15%, you’re taxed 100% on the overage, and you lose your next two first round picks. Picks after the 10th round are not subject to the “pool,” up to $100k per pick. If you go over $100k to sign one of those kids, that overage does count against your “pool.” Good Lord…
  • The greatest downfall of this new rule is a very reasonable fear that top young athletes, who need their wheels greased to choose professional baseball over another sport, will no longer have that grease. Kevin Goldstein throws out the example of Bubba Starling, who would be playing football at Nebraska if he hadn’t received a largely overslot offer from the Kansas City Royals. That hurts all of baseball – we want the best athletes playing baseball, not other sports.
  • The second greatest downfall is the reduced ability of teams to restock their farm system quickly via the draft, if they are willing to spend to do so. This is not a large/small market issue, mind you – some of the biggest spenders in recent years are small market clubs.
  • Also, the draft signing deadline will move forward from August 15 to somewhere between July 12 and July 18 (depending on the All-Star Game), and there will be no more Major League deals for draft picks.
  • Competitive Balance Lottery: The one draft change that will help smaller market clubs is a really bizarre one – after the first round, an additional six picks will be given out to six of the 10 smallest market teams, by way of a lottery. After the second round, the remaining four teams, and every other team, will be entered into a second lottery for another six picks. The lotteries will have weighted odds based on the previous season’s winning percentage (similar to the NBA draft). These additional picks will be tradable, subject to certain restrictions.
  • International Free Agency: Teams will be limited to a “pool” of money they can spend internationally each year (for 2012-2013, the amount will be the same for each team, and thereafter, the pool will be tiered based on winning percentage from the previous season (i.e., if your team sucked, you’ll have more money to spend internationally)). The international pool is subject to very similar “overage” penalties as the draft. Starting in 2013, teams will be permitted to trade a portion of their international signing pool. Players are considered amateur international players, subject to the pool, if they are 23 or younger (depending on how much professional experience they have in another country’s professional league).
  • Free Agent Compensation: Type A/Type B and all of that business will be scrapped, starting next year. In its place, a team can get compensation for a departing free agent only if it makes a one-year contract offer to that free agent, after the World Series, for an amount of money equal to the average salary of the top 125 player salaries from the previous year. If the player doesn’t take the offer, and leaves, the team will get a compensatory pick at the end of the first round. The signing team will forfeit its first round pick (unless it’s in the first 10 picks, then it will forfeit its next highest pick). Only players who’ve been with their teams for the entire year will be eligible for compensation.
  • Super Two Cut-Off: The cut-off for Super Two status – an extra year of arbitration for players with more than two years of service time but less than three years – will be increased from the top 17% in service time for those players between two and three years service time to the top 22%. The cut-off is typically somewhere around two years and 145 days (if you bring a kid up in mid-May, you’re risking Super Two), so that’ll will probably now be closer to two years and 130 days (that’s a very rough estimate). Starlin Castro was likely to be a Super Two after 2012 anyway, but this all but ensures it.
  • Additional Wild Cards: MLB has punted on the decision about the addition of two more Wild Cards in 2012, instead stating in the agreement that a decision will be reached on or before March 1, 2012. The additional Wild Cards will be in place for the 2013 postseason at the latest.
  • The Astros will move to the AL West in 2013, and interleague play will go on during the entire season starting that year.
  • There will be HGH testing as soon as next year, with suspensions similar to the current steroid suspensions.
  • The competitive balance taxt limit will go up from $178M to $189M in 2014.
  • The ML minimum salary rises from $414k in 2011 to $480k in 2012, with further increases from there.
  • The active roster will increase to 26 (from 25) for certain double-header days.
  • There are limitations on the use of smokeless tobacco.
  • Participation in the All-Star Game, if selected, is mandatory unless you’re hurt or get an excuse slip from the Commissioner’s Office.
  • Instant Replay will be expanded to include fair/foul and “trapped” ball plays, subject to the Office of the Commissioner’s discussions with the World Umpires Association.

Brett Taylor is the editor and lead writer at Bleacher Nation, and can also be found as Bleacher Nation on Twitter and on Facebook.

75 responses to “The New CBA is Announced: Draft, Free Agency, HGH Testing, Instant Replay Among the Notable Changes”

  1. TWC

    “… and there will be no more Major League deals for draft picks.”

    When was there before?

    “The active roster will increase to 26 (from 25) for certain double-header days.”

    Lame.  It’s called stratergery strategy.

    Anyway, some interesting changes.  Gonna take a few years to work out, I’d expect.

  2. JB88

    There is nothing in what you wrote that helps me understand why teams like the Cubs, Yankees, Red Sox, or any big market team would agree to that deal. That is about the worst possible deal that big market teams could have ever imagined.

  3. Cliffy

    Having read these bullet points and other sources it seems the best way for the Cubs to rebuild is thru free agency. Am I wrong?

    1. Luke

      I wouldn’t say its the best way, but it looks like draft loading is going to be a lot harder.

  4. Stinky Pete

    Hate the All Star game rule.  I recall enjoying the ASG when it meant nothing.  Now it seems to be a giant mountain of crap.

  5. Cliffy

    QT @Haudricourt: Changes in free agent compensation will make it easier for other clubs to sign free agents without forfeiting draft picks.

  6. Luke

    Bloody hell. It’s going to take awhile to think through all this.

    First reaction: I absolutely hate the changes to the draft and international free agents, except for the earlier signing date. That was smart. The rest of it… it hurts players and it hurts teams.

    But I want to work through this a bit more before I comment much further. I’m still not sure I’ve wrapped my head around it.

  7. CubsFanatic

    I actually like some of these changes. But the first bullet is just stupid. Whoever thought it up needs relieved of his duties…of life.

  8. Ari Gold

    Congratulations Bud F***head Selig. You just ruined baseball in all but the largest markets.

  9. Ron

    This is Dodd Frank part two.

  10. JasonB

    Guess we can watch next year’s Dillon Maples play QB or WR or whatever he was going to play for North Carolina during the 2012 football season.  Awesome…

    1. Luke

      Not so fast. It depends on the allowed draft budget pre penalties. We don’t have that number yet. If it is something in the $10-$12 million range, not a lot changes for most teams. If it is in the $5 million range, every front office except the White Sox will be extremely unhappy and the scenario you just described will absolutely come true.

      For the record, Maples was a kicker.

      1. JasonB

        Fair points and thanks for the clarification on Maples…

      2. hardtop

        wait, kids actually go to college to play kicker?  did we really have to offer him anything to get him to sign?  i would of just said “hey pepe luepe, here’s 10 grand, a blond rental,  and a baseball glove, get to work”

        1. Luke

          I do wonder if Maples determination to play football and baseball at UNC wasn’t more of a bargaining ploy.

          He would have been a walk-on for football, I think, and he is the only person I have ever heard of who really, really wanted to play football for North Carolina. Had it been Georgia, or Arkansas, or Virginia Tech or Texas or any other storied program I might believe it. But are there really little kids who (1) are aware that UNC has a football team and (2) seriously want to put themselves through that? I’m a little skeptical.

          Whatever, it worked. He got his bonus, so hats off to his agent. I’ll have to remember that in my next salary negotiation. “Well, sir, your offer is attractive but I’m really thinking about walking on to kick for the North Carolina football team. It’s sort of a dream of mine. Stop laughing. Maybe you could add an extra zero or two onto your offer? No, no… to the left of the decimal point. Other left.”

  11. Alex

    Reinsdorf is sitting somewhere and popping champagne corks over this. Why should it matter how a team decides their model for building a contending team?

    This hurts teams that depend on a model of drafting and developing players to compete. Just because the White Sox want to overpay for aging and ineffective veterans to compete, the teams use other models to compete shouldn’t be penalized. So if the Pirates want to spend $17 million on their draft class and Reisndorf wants to spend $17 million on Jake Peavy, that should be entirely up to each respective organization.

    John Heyman makes a great point when he said that an overrated draft pick can mean seven or eight million dollars burned, but an overrated free agent acquisition can waste upwards of $125 million. We’re dealing with one right now.

  12. mul21

    This is just awful unless the numbers for the total draft pool money are really high. And the international part of it is even more immensely stupid. I hate Bud Selig and his stupid meddling.

  13. Cliffy

    Matt Garza’s trade value went up with this agreement. But, can we afford to lose him now without the “other” ways to replace him.

    1. Luke

      Maybe. On the other hand, top prospects I think also got more valuable since no one team can count on spending limitlessly in the draft to restock a farm system.

  14. Cliffy

    QT @Ken_Rosenthal: For those players, signing club will not lose pick. Team that loses player will gain first rounder in slot right before signing team. #MLB.

    Prince Fielder might come into play with these changes for the Cubs.

  15. Luke

    MLBTradeRumors has the initial international free agent budget set at $2.9 million. That will change according to a number of factors on a per team basis in later seasons. Cespedes is too old to be subject to that cap, so he can still rake in the big bucks.

    But $2.9 may now be the asking price for a certain younger Cuban star, and possibly a certain Korean pitcher as well. I doubt any team will be able to squeeze both in under that budget and still have any room left for the summer signing season.

  16. Fishin Phil

    All I can say is ther must have been one helluva a drinking game going on when they came up with that whole agreement.  Maybe now that they are done with this convoluted pile of crap, we should have them work on simplifying the tax code.



  17. Jonathan

    It seems to me that you pay top dollar to your best draft picks, let the rest go unsigned and fill out the minor league teams with undrafted free agents, and those players who became free agents by not being offered a contract by the team that drafted them. You will have to be very selective in who you sign.

  18. Robbo

    Good foresight by Ricketts/Hendry to spend $$$ on the draft this past year before this mess of a CBA was put into place.

  19. kernzee

    I was fortunate enough to meet Tom Ricketts back in June , a few days before the draft , and I asked him about possible changes to the draft and he was of the opinion that there would be no major changes . Their aggressiveness was all about a philosophical change , not a closing window of opportunity.

  20. Kyle

    This was a cash grab by the owners, plain and simple. Cheap owners can now stay on a competitive footing for amateur talent and pocket the difference, while owners who don’t mind spending money will now just spend more on MLB talent.

    The Cubs’ combined draft and IFA budget last year was something like $20 million, and they were planning on spending at least that next year. The IFA cap alone should free up $4 to $5 million.

  21. Luke

    Link to the summary pdf.

    It’s still about as clear as mud. There are a lot of changes, and the repercussions keep adding up.

  22. Spencer

    “Excess of Pool Penalty (Tax on Overage/Draft Picks)
    • 0-5% 75% tax on overage”

    Maybe I’m being especially slow today, but this does not make sense to me. They are taxing on ZERO to 5% over? Doesn’t 0% mean that you didn’t go over your allotted pool? Do they mean .000001% or something like that?

    1. JulioZuleta

      Say the cap is $100 and you spend $104, you will be taxed 75% of the 4 dollars you want over for a total of $3. I think the zero just lets them encompass that half a percentage point over someone might go.

    2. Luke

      I’m sure the legal language is far more precise than 0-5%. They do mean amounts in excess of the limit, be that amount as small as a single dollar. If you stop at the limit, there are no penalties.

  23. die hard

    Was that the Commish searching for the compensation to award the Red Sox?

    1. nonesuch

      Ha, good one!

  24. Spencer

    Another question:

    “Draft pick Compensation: The Player’s former Club will receive a selection at the end of the first round beginning after the last regularly scheduled selection in the round.”


    “Competitive balance lottery: The ten Clubs with the lowest revenues, and the ten Clubs in the smallest markets, will be entered into a lottery for the six draft selections immediately following the completion of the first round of the draft.

    Which happens first, the compensation picks or the competitive balance picks?

    1. Luke

      I think the order goes:

      1st round
      Free agent compensation picks
      Competitive Balance Lottery Rd 1 (tradeable picks)
      2nd Round
      Competitive Balance Lottery Rd 2 (tradeable picks)

      But I am by no mean sure of that.

      Also, the draft picks taken from teams who overspend on the draft would be distributed to teams who underspend via a lottery. I think that the winners of the lottery would receive the actual pick not a bonus pick at the end of the first round. So if Yankees over spend and lose their 2012 first rounder, and the White Sox get it, the White Sox would pick in the Yankees slot in round 1. I think.

  25. CubSouth

    I think we will be seeing alot more two sport athletes going into the other direction but some of those will still come back to baseball because they know, like the rest of us that only the NFL and NBA (one day soon again) is there big money for the players. The NFL only has an avg lifespan of 3-5 yrs and the NBA is even shorter, with limited roster space, even with the NBDL. I don’t think it will hurt us as much as people may think it will, with the expectancy of players leaving for a more lucrative gig. Let’s face it, baseball has the best of both worlds, a longer, much longer career and also the money will be there if u have the talent to go with it.