Baseball owners unanimously approve five-year labor deal

NEW YORK (Ticker) - Baseball owners unanimously approved a five-year collective bargaining agreement with the Players Association, commissioner Bud Selig announced on Friday.

The labor deal was reached prior to Game Three of the World Series on October 24, pending approval from both sides.

The vote of the owners was conduced by conference call.

“Unanimous approval by the clubs is yet another indicator of the peace and prosperity that exists in the industry,” Selig said. “This agreement gives us a great opportunity to continue to grow the game in all ways and expand on the Golden Age of the sport.”

By the end of the agreement through December 2011, baseball will have gone 16 years without a work stoppage, its longest period of labor peace. There were eight work stoppages between 1972-1995.

The current contract reached in August 2002 was set to expire on December 19.

The highlights of the new agreement include a continued competitive balance tax structure that was implemented in 2002; continued revenue sharing and provisions requiring revenue sharing recipients to spend to improve on-field performance; an increase in the minimum salary; and modifications to the amateur draft.

The threshold for the luxury tax, which provides funds from big-market teams to small-market ones, rises from $136.5 million to $148 million next season with 5 percent annual increases.

The rates will continue at 22 1/2 percent for clubs over the threshold the first time, 30 percent for the second time and 40 percent for a third time.

The drug program put in place last November will continue throughout the term, home-field advantage in the World Series will continue to go to the league that wins the All-Star Game, and there will be no contraction during the course of the agreement.

The minimum salary will go from $327,000 to $380,000 in 2007 with $10,000 increases each season thereafter. Some compensatory picks for losing certain types of free agents will be eliminated.

Regarding the draft, clubs that fail to sign first- or second-round picks will receive the same selection in the subsequent draft as compensation. This will allow small-market teams the ability to go after the better players instead of settling for players who will accept the bonus money being offered.


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Updated Friday, Nov 3, 2006