Details of baseball's new labor deal

Updated: November 23, 2011, 2:53 AM ET
Associated Press

NEW YORK -- Details of the new labor agreement announced Tuesday between baseball players and owners:

Length

The agreement starts Dec. 12 and runs through Dec. 1, 2016.

Human growth hormone

Players will be subject to blood testing for HGH during offseason and spring training starting in February 2012. There is no agreement yet on random testing in-season. There can be testing at any time for cause. The penalty for a positive test is the same as for a positive test for a performance-enhancing drug in urine testing: 1st infraction-50 games, 2nd infraction-100 games, 3rd infraction-lifetime ban.

Urine drug testing

Offseason random tests for performance-enhancing substances will increase from the current 125 tests to up to 200 in the 2012-13 offseason, 225 in 2013-14 and 250 each offseason starting in 2014-15.

Alcohol

Players suspected of an alcohol problem, including those arrested for DWI or other alcohol-related crimes, must undergo mandatory evaluation.

All-Star Game

Players will be required to participate in the All-Star game, unless injured or excused.

Realignment

The Houston Astros will move from the NL Central to the AL West for the 2013 season, leaving each league with 15 teams.

Postseason

Expands to 10 teams in 2012 or 2013, with the non-division-winning teams with the two best records in each league qualifying as wild cards, along with the three division winners. The wild cards in each league will meet in a one-game series, with the winners advancing to the division series. A decision on whether the expanded playoff will start in 2012 will be made by March 1, although owners hope for a decision by their January meeting.

Video review

Expands to fair/foul calls and trap calls, subject to an agreement with umpires.

Smokeless tobacco

Players, managers, and coaches will be prohibited from using smokeless tobacco during televised interviews and team appearances. Once stadium gates open, players, managers and coaches must conceal tobacco products and may not carry tobacco products in their uniforms or on their bodies.

Helmets

By 2013, all players must wear a new Rawlings batting helmet designed to protect against pitches at up to 100 mph.

Bats

No new players entering major leagues may use low density maple bats.

Amateur Draft

The signing deadline is moved from Aug. 15 until a date between July 12-18, depending on the date of the All-Star game. Drafted players may not sign major league contracts.

The top 200 prospects will be subject to pre-draft drug testing.

Teams whose total spending on the first 10 rounds of the amateur draft exceeds a threshold are penalized with a tax.

Tax:

0-5 percent over: 75 percent tax on the amount over.

5-10 percent over: 100 percent tax on the amount over and lose next 1st-round draft pick

10-15 percent over: 100 percent tax on the amount over and lose next 1st- and 2nd-round draft picks

In excess of 15 percent over: 100 percent tax on the amount over and lose next two 1st-round draft picks

Thresholds:

2012: Each team has different thresholds, with the figures for the top 10 rounds aggregated, based on 2011 total spending.

2013-16: Thresholds rise, based on industry revenue growth. The thresholds cannot decrease.

For players selected in the 11th round and beyond, portions of signing bonuses above $100,000 will count against the signing bonus pool.

Tax proceeds will be paid to clubs who receive under revenue sharing, excluding those that are market disqualified and who did not go over their own signing pool threshold.

Competitive Balance Lottery

The 10 teams with the lowest revenue and the 10 teams in the smallest markets will be entered into a weighted lottery for six amateur draft picks following the first round starting in 2012. The four clubs not receiving picks and the clubs that receive under revenue sharing will be entered into a weighted lottery for six picks following the second round. The competitive balance lottery draft picks may be traded.

International Amateur Signings

Teams whose total spending on the amateur draft exceeds a signing bonus pool threshold are penalized with a tax.

Tax:

0-5 percent over: 75 percent tax on the amount over.

5-10 percent over: 75 percent tax on the amount over and limit to one player in next signing period with bonus over $500,000

10-15 percent over: 100 percent tax on the amount over and prohibition in next signing period to sign players with bonus over $500,000

In excess of 15 percent over: 100 percent tax on the amount over and prohibition in next signing period to sign players with bonus over $250,000

Thresholds:

July 2012-June 13: $2.9 million, not including six exceptions of up to $50,000 each and any bonus of $7,500 or less.

July 2013-14: Threshold based on reverse order of won-lost record the previous major league season.

A study committee will meet and may recommend changes to the system to begin for the 2014-15 signing period. Penalties for exceeding threshold will increase beginning with 2014-15 if a draft is not agreed to by July 2014.

Beginning in 2013-14, teams may trade a portion of their signing bonus pool, subject to restrictions.

Luxury Tax

Teams whose payrolls exceed set thresholds will be taxed on the portions above them:

2012-$178 million

2013-$178 million

2014-$189 million

2015-$189 million

2016-$189 million

For 2012 only, there are transition rates:

1st time over threshold: 20 percent

2nd time over threshold: 30 percent

Third or subsequent time over threshold: 42.5 percent

The following tax rates apply: starting in 2013:

1st time over threshold: 17.5 percent

2nd time over threshold: 30 percent

3rd time over threshold: 40 percent

4th or subsequent times over threshold: 50 percent

A team that does not pay tax in a year that goes over the threshold in a subsequent year pays at 17.5 percent.

Payrolls are for 40-man rosters and include averages of multiyear contracts; health and pension benefits; clubs medical costs; insurance; workman's compensation, payroll, unemployment and Social Security taxes; spring training allowances; meal and tip money; All-Star game expenses; travel and moving expenses; postseason pay; and college scholarships.

Free Agency

Major league free agents who sign minor league contracts who are not added to the opening day roster or unconditionally released five days before opening day receive additional $100,000 retention bonus and the right to opt out by June 1.

Free Agent Draft Pick Compensation

This offseason-Type A free agents are reduced from 21 to eight.

Starting with following the 2012 World Series, Type A and B free agents are eliminated. In order to be eligible for compensation for losing a free agent, a player must have been with the team for the entire season and a team must by the fifth day after the World Series make a qualifying offer to its players of the average of the 125 highest contracts by average annual value. The average would have been in excess of $12.4 million this year, and it cannot go down. A player has until the 12th day after the World Series to accept or reject the offer. If a player receives a qualifying offer and rejects it and then signs with another club, his former club would receive a draft pick as compensation at the end of the first round. The club signing that player loses its first-round pick in the following amateur draft, unless that pick is among the top 10, in which case the club signing that player loses its next-highest pick.

Salary Arbitration

The top 22 percent of players by service time with at least 2 years of major league service and less than 3 years of service are eligible for salary arbitration starting with following the 2012 season, up from 17 percent.

Revenue Sharing

A market disqualification test is added, in which teams in the 15 largest markets (both teams from New York, Los Angeles and Chicago along with Atlanta, Boston, Houston, Oakland, Philadelphia, San Francisco, Texas, Toronto and Washington) will gradually become ineligible to be net revenue-sharing receivers. The largest 15 markets lose 25 percent of revenue-sharing proceeds in 2013, 50 percent each in 2014, 75 percent in 2015 and 100 percent in 2016. The money the teams would have been eligible to receive but don't goes back to the payer clubs pro rata, but only if the payer clubs are under the $189 million luxury tax threshold starting in 2014. A provision says Oakland will remain eligible as long as its ballpark situation remains unresolved.

Minimum Salary

First figure is for major leagues, second is minor league rate for players with split contracts appearing on a 40-man roster for two or more years:

2012-$480,000/$78,250

2013-$480,000/$79,900

2014-$500,000/$81,500

2015-$500,000 plus cost-of-living adjustment/$81,500 plus cost-of-living adjustment

2016-2015 minimum plus cost-of-living adjustment/2015 minimum plus cost-of-living adjustment.

Tender Deadline

The deadline for teams to offer contracts for the following season to unsigned players on their 40-man rosters is moved to Dec. 2 from Dec. 12.

Commissioner's Discretionary Fund

The amount the commissioner may redistribute from the central fund to clubs at his discretion increases from $10 million to $15 million.

Split Doubleheaders

Split doubleheaders may be scheduled during the regular season. For a split doubleheader, a team may have one additional active player, raising total to 26.

Benefits Plan

The clubs' contribution will average $184.8 million annually, with benefits at the IRS maximum, is from an average of $154.5 million annually, with benefits at the IRS maximum.

Allowances

Spring training and in-season allowances will be increased at the rate of the Consumer Price Index.

Waivers

Weekend waivers will start in 2012.

Debt Service Rule

The earnings before interest, taxes, depreciation, and amortization (EBITDA) multiplier is lowered from 10 to eight (from 15 to 12 for teams with stadium debt in the first 10 years after a new ballpark is opened or existing ballpark renovated. Debt of related parties to a team's owner will be covered if team funds or assets are used to service the debt.


Copyright 2011 by The Associated Press