MLBPA opens CBA negotiations with plan to punish low-spending teams and raise luxury-tax threshold to $300M

Major League Baseball’s next labor fight officially has its opening proposal.

The MLB Players Association made its first formal offer to owners Wednesday as the sport begins working toward a new collective bargaining agreement, and the union’s initial wishlist is exactly what fans might expect: higher salaries, more player protections and a new mechanism aimed at forcing lower-spending teams to put more money into the on-field product (cough, Pirates, cough).

Among the biggest pieces of the proposal is a massive increase to the league minimum salary. The MLBPA is seeking a $1.5 million minimum beginning in 2027, according to a proposal document posted by USA Today’s Bob Nightengale. That would nearly double the current $780,000 minimum.

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The union also proposed expanding the pre-arbitration bonus pool, broadening salary arbitration eligibility, increasing protections against service-time manipulation, eliminating the qualifying offer and removing penalties for clubs that sign free agents.

But the most interesting piece might be the proposed “Competitive Integrity Tax.”

According to the proposal, the tax would apply to clubs that fail to meet minimum payroll benchmarks, reportedly teams spending less than $150 million. In other words, the players are not just targeting the top-spending teams (cough, Dodgers, cough). They’re also taking aim at franchises that collect league revenue while refusing to spend enough on major league talent.

That is where the next labor fight could get especially interesting.

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MLB already has a competitive balance tax, more commonly known as the luxury tax, that punishes teams for spending above certain payroll thresholds. The MLBPA’s proposal would increase the base luxury-tax threshold from $244 million to $300 million and remove nonmonetary penalties, such as draft-pick consequences, according to ESPN’s Jeff Passan.

So the union’s message is clear: stop punishing aggressive spenders so harshly, and start putting pressure on teams that won’t spend.

The proposal also includes changes to revenue sharing. Sports Business Journal reported that the MLBPA’s plan would guarantee every small-market team at least $240 million in annual revenue, but with conditions requiring those funds to be used to improve on-field performance. The proposal would also create penalties for clubs that do not spend revenue-sharing payments on team payroll.

It’s a plan that fans of low-spending teams are likely to get behind (cough, Reds, cough).

Baseball’s economic argument is usually framed around the Dodgers, Mets, Yankees and other big spenders. Owners who want a salary cap often point to competitive balance and the financial gap between major-market and smaller-market teams. But the players’ proposal smartly attacks the issue from the other direction.

Instead of capping what the richest teams can spend, the MLBPA wants to raise the floor for teams that spend very little.

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The union also proposed allowing players with at least five years of service time who have reached age 30 (by Nov. 1) to qualify for free agency. Under the current system, players generally need six years of major league service to reach free agency.

The proposal is only the first step in what is expected to be a difficult labor process. The current CBA expires on Dec. 1, and owners are likely to again pursue some version of a salary cap and floor system. The MLBPA has long opposed a salary cap, and Interim Executive Director Bruce Meyer has argued economic reform can be achieved without one.

That issue is the crux of the dispute.

Players want more money pushed toward salaries without limiting what teams at the top can spend. Owners want more cost certainty and will almost certainly frame a cap-and-floor system as a competitive-balance fix.

The two sides have been here before.

The 2021-22 lockout did not cost the sport any regular-season games, but it did delay the deal until March and compromise spring training. That was MLB’s first work stoppage since the 1994-95 players’ strike.

Now baseball is heading toward another high-stakes labor negotiation with the sport enjoying strong momentum on the field, but with the same basic financial fight bubbling under the surface.

The players have now made their opening move.

And if Wednesday’s proposal is any indication, they are not just preparing to fight the league’s richest owners.

They’re going after the cheap ones, too.