New Basic Five-Year Agreement Signed

Major League General Manager are pleased that baseball has a new collective bargaining agreement through 2011. To get an agreement without a work stoppage is important for both players and management. It shows that a lot of people on both sides understand what is best for the game.

The official release from Major League Baseball:

Commissioner Allan H. (Bud) Selig and Major League Baseball Players Association Executive Director Donald Fehr jointly announced that MLB and the MLBPA have agreed to a five-year labor contract that will allow play to continue uninterrupted through the 2011 season.

The termination date of the new Basic Agreement is December 11, 2011. The five-year contract is the longest labor contract in baseball history. By the end of the contract, baseball will have gone 16 years without a strike or lock-out, the longest period of labor peace since the inception of the collective bargaining relationship.

"This is an historic agreement for Major League Baseball and is emblematic of the spirit of cooperation and trust that now exists between the clubs and players," said Commissioner Selig. "We are in the midst of baseball's Golden Age. More than 76 million fans attended our games this season, setting an attendance record for the third consecutive year, and we produced $5.2 billion in revenue, which more than quadruples our revenue total of 14 years ago. The new Basic Agreement assures labor peace into the next decade and gives us the opportunity to expand the Golden Age and continue to grow the game in all ways unimpeded by internal labor conflicts."

Fehr said: "I share the Commissioner's view that over the last 10 years our game has experienced enormous growth. This new agreement will permit that growth to continue uninterrupted. We were able to conclude these new agreements before the expiration of the current contracts because the two parties brought to the table, along with serious concerns, a respect for the positions and needs of the other. As a result, the discussions were workmanlike and pragmatic, and, while difficult on some issues, the talks were conducted in a mutual attempt to get the job done.

"I want to thank all of the Players for their involvement and support during this process, especially those on the negotiating committee, without whom we would not be here today," Fehr continued. "Nearly 100 players participated in negotiating meetings, and many times that number in internal discussions. I would also like to acknowledge the MLBPA staff for its efforts. Finally, on behalf of the players, I would like to express our appreciation to the members of the Commissioner's negotiating team for all of their hard work."

Commissioner Selig added: "I appreciate the effort that representatives of both negotiating teams devoted to finalizing the agreement in such a timely manner. I would also like to thank the club representatives of Major League Baseball's negotiating team - Larry Dolan of the Cleveland Indians, Peter Angelos of the Baltimore Orioles and Andy MacPhail, formerly of the Chicago Cubs - for their hard work and for sacrificing so much time on behalf of the game."
Summary of MLBPA-Major League Baseball 
Labor Agreement
Term
1. Five-year labor contract.
2. Termination date - December 11, 2011.

Revenue Sharing
1. Net transfer of revenue sharing plan 
will be the same as the current plan 
($326 million in 2006). Net transfer 
amounts will continue to grow with 
revenue and changes in disparity.
2. Marginal tax rates for all recipients 
are reduced significantly through the 
use of a new central fund re-
distribution mechanism. Rates 
reduced to 31% from 40% 
(high revenue Clubs) and 48% (low revenue 
Clubs) under old agreement.
3. All Clubs face the same marginal 
rate for first time.
4. Commissioner's Discretionary Fund 
will continue at $10 million per year, 
with cap of $3 million per Club per 
year.
5. Provision requiring revenue sharing 
recipients to spend receipts to improve 
on-field performance retained with 
modifications.

Competitive Balance Tax
1. Competitive Balance Tax structure 
from 2002 agreement is continued.
2. Rates will continue at 22 ? % for 
Clubs over the threshold the first 
time, 30% for Clubs over the threshold 
the second time and 40% for Clubs over 
threshold the third time. 3. Clubs 
that paid 40% in 2006 will face 40% 
rate in 2007.
4. Thresholds reset to $148 million 
in 2007, $155 million in 2008, $162 
million in 2009, $170 million in 2010 
and $178 million in 2011.

The Debt Service Rule
1. The Debt Service Rule from 2002 
agreement retained with modifications.

Amateur Draft
1. Clubs that fail to sign first or 
second round draft pick will receive 
the same pick in the subsequent draft 
as compensation. Club that fails to 
sign a third round pick will receive 
a sandwich pick between rounds three 
and four in the subsequent draft as 
compensation.
2. Period of time before a Player must 
be protected from the Rule 5 Draft is 
changed from three or four years from 
first minor league season to four or 
five years from year of signing.
3. Signing deadline of August 15 for 
draft picks other than college seniors.

Draft Choice Compensation
1. Type C free agents eliminated in 
2006
2. Also in 2006, compensation for type 
B players becomes indirect (sandwich 
pick) as opposed to direct compensation 
from signing Club.
3. Effective 2007, Type A players limited 
to top 20 percent of each position (down 
from 30 percent) and Type B players become 
21 percent - 40 percent at each position 
(rather than 31 percent - 50 percent).
4. Salary arbitration offer and acceptance 
dates move to December 1 and December 7.

Benefit Plan
1. Players Benefit Plan continued with 
maximum allowable benefit under IRS 
rules.
2. $154.5 million average annual 
contribution.
3. Improved benefits for some retired 
players.

Minimum Salary
1. Major League: $380,000 in 2007, 
$390,000 in 2008 and $400,000 in 2009, 
COLA in 2011.
2. Minor League: $60,000 in 2007, 
$62,500 
in 2008, $65,000 in 2009.
3. New minimum for first time roster 
players of 50% of minor league minimum.
4. Maximum cut rule applicable to split 
contracts reduced to 60% from 80%.

Free Agency
1. Eliminate December 7, December 19, 
January 8 and May 1 deadlines for free 
agents.
2. Tender Date - December 12
3. Eliminate right to demand a trade 
for all new multi-year contracts.

Other
1. Home-field advantage in World Series 
to League that wins the All-Star Game.
2. Drug program continues.
3. Settlement of 40 plus grievances 
and disputes.
4. No contraction during term of agreement.

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