What the owners and players wanted in the labor negotiations and
how the issues got resolved:
Amateur Draft
Owners: Wanted to open the annual draft each June, currently
limited to players in the United States (including Puerto Rico) and
Canada, to players from around the world and cut it from 50 rounds
to 38 rounds. Wanted to allow teams to trade draft picks, with some
restrictions.
Players: Were open to concept of worldwide draft, but proposed
16 rounds. Worried that college juniors and seniors, junior college
players and high school seniors (the group currently eligible)
would be given preference over the newly eligible players, they
wanted owners to centralize academies in Latin America that
currently are run by individual teams, which would increase the
knowledge of those players among all teams. Agreed that teams
should be able to trade draft picks, and also would allow teams to
trade negotiating rights to a selected player after the draft, a
concept owners oppose.
Resolution: The sides shall establish a committee to establish
rules for a worldwide amateur draft, which it will try to have in
place for June 2003. Clubs have proposed 38 rounds, players 20. The
committee will make the determination. The committee will consider,
among other issue, whether teams should be allowed to trade draft
picks and the negotiating rights to selected players. Teams that
fail to sign picks in the first two rounds of the draft will
receive an extra pick in the following year.
Commissioner's Discretionary Fund
Owners: Proposed that the commissioner could take $85 million
from the central fund -- where money goes from national broadcasting
and licensing contracts -- and distribute it unequally to teams.
Because the money was to be taken equally from every team -- $2.83
million each -- at most $45 million could have been transferred to
the 14 teams with the least revenue.
Players: Proposed moving $40 million unequally from the central
fund to the low-revenue teams.
Resolution: A total of $10 million -- $333,333 from each team --
is taken from the central fund and may be redistributed by the
commissioner.
Competitive-Balance Draft
Owners: The teams with the eight highest winning percentages
during the previous three years would have been able to protect 25
players apiece in the draft. Only the teams with the eight lowest
winning percentages during the previous three years would have been
allowed to make selections, and they could have taken only one
player each. The draft would have taken place annually after the
World Series but before the end of the winter meetings each
December.
Players: Were open to the concept.
Resolution: Not included in agreement.
Contraction
Owners: They claimed they had the right to eliminate teams but
must bargain on the effects of eliminating teams, such as a
dispersal draft.
Players: They claimed franchises could not be folded without the
union's approval.
Resolution: Teams may not be eliminated through the 2006 season.
The clubs may elect to eliminate two teams for the 2007 season, but
must notify players by July 1, 2006. If the clubs elect to contract
for 2007, the union would not contest before the National Labor
Relations Board that contraction is a mandatory subject of
bargaining. If clubs elect to eliminate teams they do not have to
identify at that time.
Drug Testing
Owners: Wanted mandatory random drug testing for illegal
steroids, nutritional supplements like the testosterone-booster
androstenedione and for "recreational'' drugs like cocaine.
Players: Agreed to mandatory random testing for illegal
steroids, opposed mandatory random testing for nutritional
supplements and for "recreational'' drugs.
Resolution: All players will be randomly tested for illegal
steroids in 2003 as a survey. If 5 percent or more test positive in
any survey year, mandatory random testing for illegal steroids
shall take place during the following two years. If 2.5 percent or
fewer test positive in consecutive years, mandatory random testing
shall cease. In any year in which there is not mandatory random
testing, there shall be survey testing. The first time a player
tests positive during mandatory random testing, he is placed in a
treatment program. For subsequent positive tests, penalties range
from a 30-day suspension to a two-year suspension.
Luxury Tax
Owners: To slow salary growth, owners wanted a 50 percent luxury
tax on the portions of payrolls above $98 million (including 40-man
rosters and benefits). The previous labor contract called for a 35
percent tax in 1997 and 1998, and a 34 percent tax in 1999, levied
on the portions of payrolls above the midpoint of the fifth-highest
payroll and sixth-highest payroll. Because the payroll was not
fixed, most owners concluded it was ineffective, but the union
claims it kept the highest spenders closer to the other teams.
Teams paid $12.1 million in 1997, $6.6 million in 1998 and $12
million in 1999, a total of $30.6 million.
Players: Philosophically opposed a luxury tax.
Resolution: A luxury tax will be levied on high-payroll teams to
discourage spending. Portions of payrolls will be taxed, with the
threshold starting at $117 million next year and rising to $120.5
million in 2004, $128 million in 2005 and $136.5 million in 2006.
The rate will be 17.5-40 percent, depending on the season and the
number of times a team goes over the threshold. The tax expires on
the final day of the 2006 season, meaning that if the sides play
under the status quo in 2007, there would be no tax.
Minimum Payrolls
Owners: Proposed a $45 million minimum payroll (including 40-man
rosters and benefits), to address concerns that owners may keep
additional revenue-sharing money. Only Montreal and Tampa Bay were
below that this season.
Players: As opposed to payroll floors as they are to payroll
ceilings.
Resolution: Not included in agreement.
Revenue Sharing
Owners: In hopes to decrease revenue disparity, they proposed
increasing revenue sharing, which began in 1996. Under the current
system, called a split-pool plan, each team contributed 20 percent
of its net local revenue, after deductions for ballpark expenses,
to a pool. Seventy-five percent of the pool is redistributed
equally to all 30 teams, and 25 percent is redistributed only to
the teams with local revenue below the major league average. They
first proposed that each team contribute 50 percent of its net
local revenue, after deductions for ballpark expenses, to a pool
that would be redistributed equally to all 30 teams. Using 2001
figures, the amount of shared money would have increased from $167
million to $298 million.
Players: First proposed continuing the split-pool plan and
having each team contribute 22.5 percent of its net local revenue,
after deductions for ballpark expenses. Using 2001 figures, the
amount of shared money would have increased to $228 million.
Resolution: Each team contributes 34 percent of its net local
revenue, after deductions for ballpark expenses, to a pool that is
redistributed equally to all 30 teams. In addition, $72.2 million
annually will be taken from those teams that are net payers in base
plan and redistributed to teams that are net receivers in base
plan.
Salary Arbitration
Owners: Wanted to eliminate salary arbitration eligibility of
"Super Twos'' -- the top 17 percent by service time of those
players with two or more years but less than three years of major
league service. In the 1985 contract, the eligibility of players
with two or more but less than three years of major league service
was eliminated. Eligibility for the "Super Twos'' -- approximately
12 each year -- was restored in the 1990 contract and left unchanged
in the 1997 contract. Owners also wanted to be able to withdraw
contract offers to players after salary arbitration figures are
exchanged each Jan. 18.
Players: Opposed changes.
Resolution: No changes.
Suspensions
Owners: Wanted to be able to suspend players without pay for
on-field misconduct, which would have overturned a pair of
grievance decisions won by the union.
Players: Opposed changes.
Resolution: No changes.
