Issues in Baseball's Labor Dispute
Amateur Draft
The sides essentially have agreed to have a committee study the issue of a world-wide amateur draft.
Commissioner's Discretionary Fund
Owners: Have proposed that the commissioner can 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 is to be taken equally from every team -- $2.83 million each -- at most $45 million could be transferred to the 14 teams with the least revenue.
Players: Have proposed that for teams who give up money in revenue sharing, $70 million of central fund money they otherwise would have received be distributed in a formula to the same teams that receive revenue sharing money. This would be phased in, with the plan at one-third level in 2004, two-thirds in 2005 and full value in 2006.
Competitive-Balance Draft
Owners: The teams with the eight highest winning percentages during the previous three years would be able to protect 25 players apiece in the draft. Only the teams with the eight lowest winning percentages during the previous three years would be allowed to make selections, and they could take only one player each. The draft would take place annually after the World Series but before the end of the winter meetings each December.
Players: Open to the concept.
Contraction
Owners: They claim they have the right to eliminate teams but must bargain on the effects of eliminating teams, such as a dispersal draft.
Players: They claim franchises cannot be folded without the union's approval. The union filed a grievance claiming the Nov. 6 vote, which is pending.
Drug Testing
Have agreed to mandatory random drug testing for illegal steroids, and also that there will not be mandatory random testing for nutritional supplements like the testosterone-booster androstenedione and for "recreational" drugs like cocaine. Must still agree to many details of the program.
Luxury Tax
Owners: To slow salary growth, owners would like a luxury tax on high-payroll teams. The tax would start in 2003 on the portions of payrolls above $107 million (using average annual values of players on 40-man rosters and including $9 million in benefits), and the threshold would be raised to $111 million in 2006. A team would be taxed at 35 percent the first time it exceeded the threshold, 40 percent the second time, 45 percent the third time and 50 percent the fourth time.
Players: Proposed a tax threshold of $125 million in 2003, $135 million in 2004 and $145 million in 2005, with no tax in 2006. A team would be taxed at 15 percent if it exceeded the threshold in 2003. It would be taxed at 20 percent if it exceeded the threshold for the first time in 2004 and at 25 percent if it exceeded it for the second time that year. It would be taxed at 20 percent if it exceeded the threshold for the first time in 2005 and at 30 percent if it exceeded it for the second time that year and at 40 percent if it exceeded it for the third time that year.
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.
Revenue Sharing
Owners: Hoping to decrease revenue disparity, they have proposed increasing revenue sharing, which began in 1996. Under the current system, called a split-pool plan, each team contributes 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 have proposed that each team contribute 36 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 increase from $167 million to $263 million.
Players: Have proposed a 33.3 percent straight-pool plan but would phase it in, and it would transfer about $172.3 million in 2003, $195.6 million to $196 million in 2004, $219 million in 2005 and $242.3 million in 2006. Also proposed that teams account for how they spend revenue sharing money they receive.
Salary Arbitration
Owners: Would 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
Players: Oppose changes.