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Highlights of baseball's labor agreement
Aug. 30, 2002
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Major League Baseball and the players association agreed in principle Friday to a new collective bargaining agreement, largely designed to help franchises in smaller markets. In addition, it authorizes random testing for steroid use. And owners agreed to not revisit the issue of contraction during the life of the agreement, set to expire on October 31, 2006.


  • Revenue Sharing: $258 million each year phased in over four years. A $175 billion base to be distriuted to each club on a straight-pool basis with the remainder split by the Commissioner out of the central fund and discretionary fund. It phases in at $230 million in 2003, $243 million in 2004, $258 in 2005 and $301 in 2006.

  • Competitive Balance Tax: Thresholds of $117 million in 2003, $120 million in 2004, $128 million in 2005 and $136.5 million in 2006. The percentage for all teams being penalized for the first time is 17.5 percent throughout the agreement with second-timers being penalized as high as 40 percent.

  • Contraction: Tabled for length of four-year agrreement. Owners can unilaterally contract at the start of the next agreement. Grievance case filed by players last November is now moot.

  • Worldwide Draft: Provision to discuss during new agreement. June amateur draft remains the same until changed.

  • Salary Arbitration: Language remains the same as in the 1996 collective bargaining agreement. Any player with three years of service and less than six years of service at the Major League level can file. An arbitrator picks the dollar figure submited by the player or the one submitted by the club. The decision is binding.

  • Drug testing: Testing for "Schedule III" anabolic androgenic steroids only throughout the agreement. No testing for recreational drugs.

  • Termination Date of Contract:Changes from Oct. 31 (or two days after the World Series ends in 1996 agreement) to Dec. 17 in the new agreement.

  • Minimum Salary: Increase from $200,000 to $300,000 next season for all Major League players. Those on split contracts go from $40, 500 to $50,000 for the minor league portion next season.
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