Red Sox slugger Manny Ramirez boards a bus outside Fenway Park after learning his union and the owners have agreed to a new collective bargaining agreement. (Globe Staff Photo / George Rizer)

Baseball players and owners reach agreement

By Ronald Blum, Associated Press, 08/30/02

DETAILS OF THE DEAL Highlights of the tentative agreement reached Friday between baseball players and owners, as obtained by The Associated Press from player and management sources: LENGTH The agreement starts with the 2002 season and runs through Dec. 19, 2006. LUXURY TAX Teams whose payrolls exceed set thresholds will be taxed on the portions above the thresholds, with the money to be used for player benefits, including player benefit plan, or the industry growth fund, or developing baseball players in countries lacking organized high school baseball. The thresholds are as follows: 2002--No tax 2003--$117 million 2004--$120.5 million 2005--$128 million 2006--$136.5 million The following tax rates apply: -- 1st time over threshold: 17.5 percent in 2003, 22.5 percent in 2004 and 2005, no tax in 2006 -- 2nd time over threshold: 30 percent -- 3rd and 4th times over threshold: 40 percent Luxury taxes expire on the final day of the 2006 season, meaning that if the sides play under the status quo in 2007, there would be no tax 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. REVENUE SHARING Base plan-- Each team contributes 34 percent of its net local revenue, after deductions for ballpark expenses, to a pool that is redistributed equally to all 30 teams. Central fund component-- $72.2 million annually, taken from those teams that are net payers in base plan and redistributed to teams that are net receivers in base plan. The central fund component phases in at 60 percent in 2003, 80 percent in 2004, and 100 percent in 2005 and 2006. It is collected by taking a figure in which the numerator is $72.2 million and the denominator is total net local revenue after ballpark expenses of all payer clubs, and multiplying the figure by a payer club's total net local revenue after ballpark expenses. It is redistributed on a split-pool basis based on distance from the average. Commissioner's Discretionary Fund A total of $10 million -- $333,333 from each team -- is taken from the central fund and may be redistributed by the commissioner. DRUG TESTING All players will be randomly tested for illegal steroids in 2003 as a survey. If 5 percent or more test positive in any survey year, mandatory random testing for illegal steroids shall take place during the following two years. If 2.5 percent or fewer test positive in consecutive years, mandatory random testing shall cease. In any year in which there is not mandatory random testing, there shall be survey testing. The first time a player tests positive during mandatory random testing, he is placed in a treatment program. For subsequent positive tests, penalties range from a 30-day suspension to a two-year suspension. AMATEUR DRAFT The sides shall establish a committee to establish rules for a worldwide amateur draft, which it will try to have in place for June 2003. Clubs have proposed 38 rounds, players 20. The committee will make the determination. The committee will consider, among other issue, whether teams should be allowed to trade draft picks and the negotiating rights to selected players. If a team fails to sign a first-round draft pick, it will receive a corresponding pick in the first round of the following year's amateur draft (example: if a team fails to sign the No. 2 overall pick, it would be awarded an extra pick immediately following the No. 2 pick in the following draft). If a team fails to sign a second-round draft selection, it will receive a pick in the sandwich round between the second and third rounds of the following year's amateur draft. Order of selection for the sandwich round shall be determined by inverse standings. CONTRACTION Teams may not be eliminated through the 2006 season. The clubs may elect to eliminate two teams for the 2007 season, but must notify players by July 1, 2006. If the clubs elect to contract for 2007, the union wound not contest before the National Labor Relations Board that contraction is a mandatory subject of bargaining. If clubs elect to eliminate teams they do not have to identify at that time. 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: 2002--$200,000/$40,500 2003-$300,000/$50,000 2004--$300,000/$50,000 2005--$300,000/$50,000 plus two-year cost-of-living adjustment 2006--2005 minimums, plus one-year cost-of-living adjustment  NECN REAL VIDEO | NECN.com | Help with video Owners, players reach settlement Selig 'gratified' by agreement Fehr proud strike was avoided

NEW YORK -- They saved a season and ended a streak by choosing to play rather than picket.

With just hours to spare, baseball averted a strike Friday when negotiators pulled off a surprise by agreeing to a tentative labor contract.

Commissioner Bud Selig called the deal "historic," the first time since 1970 that players and owners accepted a new collective bargaining agreement without a work stoppage.

"All streaks come to an end, and this was one that was overdue to come to an end," union head Donald Fehr said.

The deal that pulled baseball back from the brink penalizes big spending on player salaries and gives poorer teams a bigger share of the wealth.

In return, the union received a guarantee that baseball won't eliminate teams through the 2006 season. And for the first time, players agreed to mandatory, random testing for steroids.

"It came down to us playing baseball or having our reputations and life ripped by the fans," said Steve Kline, the St. Louis Cardinals' player representative.

"Baseball would have never been the same if we had walked out."

Perhaps that was why owners gained their most significant concessions since 1985 -- maybe even since the start of free agency 26 years ago -- with an agreement that runs until December 2006.

"It's not important today to talk about winning and losing," Selig said.

The commissioner and Fehr attended a morning bargaining session that wrapped up the deal, which averted the sport's ninth work stoppage since 1972. The previous eight negotiations resulted in five strikes and three lockouts.

"I think a lot of people thought they'd never live long enough to see these two parties come together with a very meaningful deal and do it without one game of work stoppage," Selig said.

Still, the pact has not been signed and parts weren't even in writing. It was unclear when it would be ratified.

The agreement was reached about 3.5 hours before the first game Friday, the deadline players set two weeks ago for a strike. But for most of the morning they weren't sure whether they'd be packing bags or playing ball.

"It was close. I was about to make my flight arrangements to go home," Chicago Cubs outfielder Roosevelt Brown said as he arrived at Wrigley Field for that first game, against the Cardinals.

A walkout threatened the final 31 days and 438 games of the regular season, and fans were angry at players and owners for their repeated quarrels over a business that generates $3.5 billion annually.

Fan Tony Pencek was sitting in a bar across the street from Wrigley when he heard the news. He immediately ran over to the ballpark and bought a ticket for the game.

"America needs this. Especially with September 11th coming up," he said. "You need to get people's minds off of it. And for something good to happen is great."

As the hours dwindled, lawyers had shuttled between the commissioner's office and union headquarters, crunching numbers and exchanging revised proposals.

Two lawyers from each side bargained until 2 a.m. before the sides broke for caucuses. Players gave owners a proposal during a 20-minute meeting that began at 4 a.m., and owners responded with a counteroffer about 6:30 a.m. The union returned with a response at 9:15 a.m.

The final meeting, which completed talks that began in January, lasted almost three hours. As soon as it ended, teams started heading to ballparks.

With the deal, owners gained concessions from one of the most powerful unions in the nation. The players' association has lifted the average salary of its members from $51,501 in 1976 -- the last year before free agency -- to $2.38 million this season.

As part of the agreement, all teams will have to share 34 percent of their locally generated money, up from 20 percent. That money is divided evenly among the 30 franchises and is intended to help middle-market teams. Owners can spend the money on their teams or pocket it, without restriction.

Also, a luxury tax will be levied on high-payroll teams to try to curb the increase in player salaries.

Teams will pay a tax ranging from 17.5 percent to 40 percent of total player salaries above $117 million in 2003, $120.5 million in 2004, $128 million in 2005 and $136.5 million in 2006. The money raised by the luxury tax will be used for player benefits and various player development programs.

The pact also saves the Minnesota Twins and Montreal Expos until at least 2006. Owners attempted to fold the teams after last season.

The deal, however, could mean the Expos will move to Washington. Selig said in January that relocations would be discussed after an agreement.

The minimum salary will rise next year from $200,000 to $300,000.

Since the last strike in 1994-95, a 232-day stoppage that forced cancellation of the World Series for the first time since 1904, the New York Yankees have won four world championships. For that very reason, Selig and many team owners said they needed changes to restore competitive balance.

The mid-market teams figure to be the biggest winners in the deal, receiving much more of their competitors' money.

The biggest losers are the Yankees, whose $242 million revenue last year was $40 million higher than any other club. The Yankees, who paid $28 million in revenue sharing last year, expect the new deal will cost them $50 million to $55 million next year. The Mets, Boston, Seattle and San Francisco also will have to pay a lot more, and they may have to raise ticket prices to cover the increases.

"It's going to affect a lot of teams with high payrolls, there's no question about that," Yankees pitcher Steve Karsay said.