Agreements in MLB, against wage stagnation

The Big leagues They are preparing to start the 2022 season with significant improvements to the salaries of the bulk of the players thanks to the new collective bargaining agreement (CBA) that, to reach an agreement, had to overcome 99 days of unemployment. These improvements allow the MLB leave the fund of the lowest minimum wages to be placed with 700,000 dollars in this 2022, above the 660,000 offered by the NFL in 2021, but still below the NHL and NBA.

During the negotiations, the players sought to incentivize spending on payroll by increasing the start of the Tax on Competitive Balance (CBT). the big leagues and the players agreed to raise it to $230 million in 2022 and hit $244 million in 2026. The minimum salary was also raised to $700,000 for this season, taking it up to $780,000 for 2026, and a new $50 million pre-arbitration bonus fund was approved. to be distributed among the top 100 young players based on prize money and statistical criteria.

“The most important thing is that an accolade was achieved for that player who was forgotten, who was behind the scenes in the shadow of the great free agent contracts, but who makes a very important weight on the payroll and who at the Sometimes they are the ones who contribute a lot to the game,” Félix Luzón Melo, baseball analyst and author of the book ‘How to play baseball off the field,’ told El Economista.

In the 2021 season the average salary in the MLB was 4.17 million dollars, an increase of 21% from 2012; By comparison, in leagues like the NBA and the NFL, this almost doubled in the same period of time. Axios indicated that since 2012, the CBT threshold has increased by only 18%, while revenue from MLB have increased by 40 percent.

The average salary had stagnated despite the fact that the income in the organizations of Big leagues they had skyrocketed even before the pandemic, reaching a record $10.7 billion in 2019 as records continue to be broken with lavish hires every year.

Between 2020 and 2021, the most lucrative deals were signed by annual value in the history of the Big leagues: Max Scherzer (Mets, $43.3 million from 2022 to 2024), Gerrit Cole (Yankees, $36 million from 2020 to 2028), Stephen Strasburg (Nationals) and Anthony Rendon (Angels) for $35 million from 2020 to 2026 and that of Trevor Bauer (Dodgers, 34 million from 2021 to 2023). In addition, four of the highest in total amount occurred from 2019 to 2022.

“It is a struggle that has been going on for a long time. The issue of average salaries, although in each collective agreement they manage to improve, until 2016, when the previous collective agreement began, they were below most leagues. That caused discomfort for the players and the new dynamics have led to a large percentage of the payroll being handled in the areas with the lowest income, that is, where the players are in the arbitration and pre-arbitration areas and that has generated that the average salary of the baseball has also decreased, ”explained Luzón Melo.

according to medium Axiosfrom 2015 to date, although the number of players who earn more than 26 million dollars per year multiplied up to six times, during that time, the average salary plummeted 30%, since the bulk of the players are located for the minimum.

The minimum wage in 2021 was $570,500, below that of the NFL with 660,000; the NHL with 750,000; and the NBA with 925,258. Unlike those other leagues, most of the players in the MLB (63% in 2021) earn the minimum due to the number of years that pass before free agency.

“The true volume of salary is found in an area that is not exactly the most graceful or benefited from collective agreements, such as the players who are within the years of control, which are from year zero to year six, but from year zero to year three there is a group of players that, as Max Scherzer said at the time, is a type of player that had to be supported, that a benefit had to be found for him.

This 2022, the minimum wage was increased to 700,000 dollars during the first year, increasing by 20,000 dollars each subsequent year until 78,000 in 2026.

The players sought in the last collective agreement to increase the threshold of the Competitive Balance Tax (CBT), whose objective was to discourage the big market giants from spending much more than their smaller rivals, however, it is seen by the players as a salary cap that prevents spending. In the new contract, the luxury tax increased its first threshold of $210 million to $230 in 2022, $232 in 2023, $236 in 2024, $240 in 2025 and $242 in 2026.

Free agency was unchanged, nor was salary arbitration.

“The refusal to seek arbitration agreements before what the current rules establish is that you increase the cost of the payroll of the teams, which are already used to having a kind of fixed cost during the first three years of each player before reaching an arbitration”, commented the specialist.

Main economic agreements between MLB and the players union:

• Increases to the minimum wage to 700,000 in 2022 and an annual increase of 20 million until 2026.
• Increase of 20 million from 2021 to 2022 in the Competitive Balance Tax Threshold. It will start at 230 million in 2022 and reach 244 million in 2026.
• 50 million in a fund for pre-arbitration bonuses to be distributed among the top 100 players based on prize money and statistical criteria.

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