Major League Baseball and the MLB Players Association reached a deal on Thursday addressing many questions facing baseball in the wake of the COVID-19 shutdown, including how a shortened (or perhaps a canceled) 2020 season.
As Mark Polishuk and Tim Dierkes (MLB Trade Rumors) write, “The specifics of this agreement still aren’t fully known, due in part to the ongoing fluidity of how baseball and the players’ union will have to adjust to future events, though we’ve already learned quite a few ways in which the sport’s structure will be altered for this wholly unique season.”
The deal does address salary and service-time issues, among others, as the baseball world continues to wait out the COVID-19 pandemic. Mark Feinsand (MLB.com) listed the key issues discussed:
Both MLB and the MLBPA are committed to playing as many regular-season games as possible, leaving open the possibility of the schedule going into October and the postseason being played into November.
No agreements were made regarding the schedule, but given the current uncertainty, the deal leaves enough flexibility for the two sides to work together toward that shared goal. Both MLB and the MLBPA have formed subcommittees to continue discussing any unresolved issues related to the 2020 season.
The Commissioner’s Office will put together a schedule at the appropriate time, then the union will have input before it is finalized. The postseason format could also be altered for 2020, including the prospect of some games being played at neutral sites.
Players will, however, collect prorated service time based on the number of days on the roster or injured list. A regular year of service time is 172 days, so regardless of how many games are played in 2020, a player who is on the roster or IL for the entirety of the season will accrue 172 days of service time.
In the absolute worst-case scenario of a canceled season, players will receive the same service time they did in 2019, which would allow players who are one year or less from free agency — a group that includes Mookie Betts, Trevor Bauer and J.T. Realmuto — to become free agents next fall no matter what.
All suspensions of 80-or-fewer games will be served in 2020 if games are played. Should the season be canceled, those suspensions would not carry over to 2021.
The union voted to accept the deal Thursday, while the owners voted unanimously Friday to ratify the deal.
All transactions are frozen as of Friday until a date to be determined by both MLB and the union. Roster expansion was not included in the agreement, but the issue will be discussed by the two sides between now and the start of the season.
As part of the agreement, MLB has the right to move the 2020 Draft past its currently scheduled date of June 10, but no later than July 20. The Draft can also be reduced to a minimum of five rounds, though MLB can choose to have anywhere from five to 40 rounds.
MLB will have the right to run a combine for amateur players in both 2020 and 2021 if the league determines it makes sense to do so.
Drafted players will receive no more than $100,000 of their signing bonuses upfront, receiving 50 percent of the remainder by July 1, 2021, and the other 50 percent by July 1, 2022. Undrafted players will be able to receive no more than $20,000 as a signing bonus.
Signing bonus values will remain at their 2019 level in both 2020 and 2021, according to terms of the new deal. MLB can also reduce the 2021 Draft to as few as 20 rounds.
As a result of the deal, the start of the international signing period may also be delayed from July 2, 2020, to as late as Jan. 15, 2021, while next year’s international signing period can also be pushed back. Teams will also not be allowed to trade Draft picks or international bonus slots in 2020 or 2021.
Other key points brought up by Polishuk and Dierkes follow.
Jeff Passan and Kiley McDaniel (ESPN) published a breakdown of the agreement, including an explanation of how a $170-million advance payment will be distributed to players if the season is canceled entirely.
Another key insight from Passan and McDaniel: “The arbitration system will be adjusted to consider lessened counting statistics because of the shorter season, and salaries secured during the 2021 offseason through arbitration won’t be used in the precedent-based system going forward.” No further detail is provided regarding the adjustment to the arbitration system, which in a sense is already set up to consider lessened counting statistics. For example, if Kris Bryant hits 20 home runs in the course of an 81-game 2020 season, will that be viewed as the equivalent of a 40 home run campaign? Passan and McDaniel’s other arbitration-related revelation – that the upcoming batch of arbitration salaries will be excluded as future precedents – implies that players may not have the luxury of getting a 40 home run type raise for a 20 home run half-season.
The ESPN duo also notes that 2020 luxury tax payrolls will be assessed “base[d] it on what full-season salaries were supposed to be, not prorated salary payment.” This is notable in that a team like the Yankees, who are way above the luxury tax threshold, will still be taxed even though they will actually pay out much less than $208MM in salaries. The actual tax paid will be prorated, according to Passan and McDaniel. The writers also explain, “And if there is no season, there will be no taxes owed, implying every team would reset to the lowest competitive balance tax threshold.” Before the coronavirus struck, teams such as the Red Sox and Cubs basically devoted their offseasons to getting under the threshold and resetting their tax rate for the future.
Speaking of veteran players on minor league contracts, several of those deals contained player opt-out dates set five days prior to the Opening Day that never occurred. MLB.com’s Jeffrey Flanagan (Twitter link) has heard speculation that the league could simply push those deadlines to five days prior to the season’s new start. With no official policy yet in place, we’ve seen different approaches from various teams to this issue, ranging from some clubs agreeing to delay opt-out decision dates independently, to some teams officially selecting a non-roster player’s contract in order to confirm their place on the Major League roster.
The MLB/MLBPA agreement also has a provision for players who aren’t on a 40-man roster but are on guaranteed contracts, the Athletic’s Zach Buchanan tweets. Such players as the Diamondbacks’ Yasmany Tomas “will receive more advance pay than a minor-leaguer,” though it isn’t clear if they would receive the full $5K daily salary through April and May. Tomas was set to make $17MM in 2020, which was the last season of his six-year, $68.5MM deal signed back in December 2014. Arizona outrighted Tomas off its 40-man roster in each of the last two seasons, and he has appeared in only four Major League games for the D’Backs in that time.
For a high-level explainer of this week’s agreement between MLB and the MLBPA, check out Jeff Todd’s video here.
— Craig Edwards (FanGraphs) wonders if MLB will turn to expansion after losing revenues due to COVID-19? Edwards notes that “We might see a franchise fee anywhere from $750 million to $1.5 billion should new teams be formed. The Kansas City Royals just sold for $1 billion, while the Marlins sold for $1.2 billion in 2017. Even adding just two franchises totaling $1.5 billion in franchise fees would net every owner $50 million, and those payments could begin several years before the new teams actually debut. Of course, new stadiums would obviously (and appropriately) be major hurdles to new teams, as is seeing some stabilization of the sport and the economy at large. A new franchise, and the construction of a new ballpark, is almost certainly not where most municipalities will elect to devote their logistical and financial resources right now. But the easiest way to make up for some of the losses in 2020 might be to add a couple of teams in the next few years.”