Baseball owners and players finalized an agreement on Friday establishing many of the financial rules that will govern a 2020 season that is shrouded in considerable uncertainty as the sports world adjusts to the shifting realities presented by the COVID-19 pandemic.
At its heart, the agreement was built on two elements should the season be canceled: First, in the event that there is no season, that players who are on the 40-man roster, the 60-day injured list, or on an outright assignment to the minor leagues with a major league contract will receive credit for as much big league service time in 2020 as they accumulated in 2019. In other words, players who were slated to become eligible for free agency next offseason will still reach the open market, and players who were in line to arrive at salary arbitration for the first time will do the same.
In exchange for that concession, players agreed that owners won’t have to pay their salaries if there are no games. Owners will, however, provide a $170 million advance to players spread across April and May that the players will not have to pay back should there be no games. If there is a season, salaries will be prorated based on the duration of a season (so a half-season would result in a player receiving half his salary).
"As we sat down and had our discussions with the league, the players understood the gravity of the pandemic and the hardship being experienced by everyone in our game and all those outside of our game,” said MLB Players Association executive director Tony Clark in a conference call. "The players also understood the extraordinary measures that we were taking and need to be taken in our country and in the baseball industry, including a near-term shutdown, in order to preserve public health and safety.”
The agreement doesn’t specify when or if games will be played given the unknown course of a public health crisis. But players and owners nonetheless reached agreement on a number of concepts for the coming year. Among them:
▪ The sides have a shared goal of playing as many games as possible. The agreement outlines potential atypical measures to discuss in pursuit of that goal, including the playing of games in empty stadiums, the extension of the regular season into October (and thus the possibility of extending the playoffs into November), both regular season and playoff games in neutral sites, scheduled day-night doubleheaders, and a reduction of off-days. Clark characterized players as "very open” to the possibility of playing in empty ballparks to accelerate the start of the season. "Players want to play,” he said. "That’s what we do. That’s what they do. Being able to get back on the field, being able to play, even if it means fans are watching back at home, being able to play even if that means their fans are watching at home, being able to play for their fans, is something they’ve all expressed a desire and interest in doing.”
▪ The resumption of the season will rely on the guidance of public health authorities, with local, state, and federal regulations as well as travel restrictions all having a significant impact on when that might be. The MLBPA secured a voice in the process with the agreement. Clark said that, to this point, a cutoff point (date or number of games) hasn’t been established after which the season would be canceled. "We are still remaining as optimistic as we can that we will be able to play as many games as possible,” said Clark. "As of right now, we remain committed to [a season].”
▪ Both sides are willing to discuss several innovations in the atypical season and use it as something of a laboratory, including: the possibility of expanding the playoffs beyond 10 teams, seven-inning doubleheaders, and more.
▪ Players will seek expanded rosters at the start of the year.
▪ It remains to be seen how teams would prepare to resume a city – whether that would be in their home cities or for another round of spring training in Florida and Arizona, and how long players would need to prepare for the season.
▪ While there was no change in the luxury tax threshold of $208 million for the coming season, and player salaries will be calculated based on their full rather than their potentially prorated amounts, if a season isn’t played, no teams will pay the luxury tax.
▪ Although the Red Sox overhauled their roster this winter to get under the luxury tax threshold, if the 2020 season is canceled, according to an MLBPA spokesperson, "There is no reset — everything will be frozen and restart as if 2021 was 2020 for CBT purposes.” In other words, the team’s luxury tax rates would not reset in 2021 to those of a first-time luxury tax payer if the team surpassed the $210 million threshold in 2021.
Instead, the team would be penalized for going over the luxury tax threshold in previous years — a potential penalty with implications for how the team looks to bolster its roster entering next year. Of course, that’s only in the event of a canceled 2020 season.
One caveat: If there is no 2020 season, no team would be considered a CBT violator for purposes of penalties such as draft-pick compensation attached to the signing or departure of a free agent who receives a qualifying offer.
▪ The MLB draft can be reduced from 40 rounds to as few as five rounds, and the 2021 draft can be reduced to as few as 20 rounds. That reduced draft was viewed by the players as a preferable alternative to another possibility, namely canceling the draft this year.
▪ The international amateur signing period can be moved back from July 2 to Jan. 15, something that would keep more cash in the hands of teams and delay the timing of its distribution to those players.