Guide To The New CBA: Draft Lottery, Expanded Playoffs And More

Image credit: Rob Manfred (Photo by Alex Trautwig/MLB Photos via Getty Images)

Major League Baseball officially announced the terms of the new Collective Bargaining Agreement that ended the lockout on Friday afternoon. The new agreement lasts for five seasons and expires Dec. 1, 2026.

Here are the most notable changes made in the new CBA, including alterations to the postseason, playing rules, player compensation and the draft.

EXPANDED PLAYOFFS

The postseason will expand to 12 teams beginning with the 2022 season. Each league will have three division champions and three wild cards.

The teams with the two best records in each league will receive a first-round bye. The other four clubs will play a best-of-three Wild Card Round.

SCHEDULING

Each club will play all 29 other teams at least one series per year beginning with the 2023 season.

RULE CHANGES

The universal DH will take effect beginning with the 2022 season.

A reconstituted competition committee, which includes one active pitcher, one active position player, an umpire and an unspecified number of representatives designated by the commissioner, will be responsible for implementing rules changes beginning with the 2023 season. 

PLAYER COMPENSATION

The minimum salary will increase to $700,000 in 2022, with annual increases of $20,000 each of the following four seasons.

The minor league minimum salary for players on a second major league contract or with previous major league service time will increase to $114,000 in 2022, $117,400 in 2023, $120,600 in 2024, $123,900 in 2025 and $127,100 in 2026.

A $50 million bonus pool will be implemented for pre-arbitration eligible players who reach certain award or statistical benchmarks. Those who finish in the top 5 in MVP or Cy Young voting, top 2 in Rookie of the Year voting or place on the First or Second All-MLB team will receive set amounts from the bonus pool.

The remaining bonus pool amount after award winners receive their distribution will be allocated to the top 100 pre-arbitration-eligible players as determined by a statistical formula. The formula will be modeled after Wins Above Replacement and developed by a joint committee of league and player representatives.

SERVICE TIME

New Prospect Promotion Incentive (PPI) draft selections will be made available to clubs that place top prospects on Opening Day rosters. If an eligible prospect is promoted to the major league roster, receives a full year of service time and receives “sufficient” awards consideration in any season before he qualifies for arbitration, the team will receive a PPI selection in one or both of the draft and the international draft, if implemented.

COMPETITIVE BALANCE TAX

The competitive balance tax threshold will be raised to $230 million in 2022, $233 million in 2023, $237 million in 2024, $241 million in 2025 and $244 million in 2026.

Clubs that exceed the CBT will pay a 20% tax the first time they go over, a 30% tax the second time and a 50% tax the third time (or more).

The first additional surcharge threshold is set at $20 million above the CBT and second surcharge threshold is set at $40 million above the CBT. A third surcharge threshold has been added at $60 million above the CBT.

Teams that surpass the first surcharge threshold will pay tax rates of 32%, 42% and 62% for first-, second- and third-time payers, respectively. Teams that surpass the second surcharge threshold will pay tax rates of 62.5%, 75% and 95%. Teams that surpass the third surcharge threshold will pay tax rates of 80%, 90% and 110%.

Teams that spend more than $40 million above the CBT and surpass the second surcharge threshold will have their highest draft selection moved back 10 spots. However, top six overall selections will be protected. Clubs with a top-six overall pick that cross the second threshold will have their second-highest selection moved back 10 spots.

INTERNATIONAL SIGNINGS

The current system for signing international amateurs will remain in place for the 2022 and 2023 signing periods.

The league and player’s union have until July 25, 2022 to agree to implement an international draft beginning with the 2024 season.

If an agreement is reached to implement an international draft, teams will no longer forfeit a draft pick for signing qualified free agents beginning with the 2022-23 offseason.

If no agreement on an international draft is reached, the current system will remain in place and draft pick compensation will remain in effect.

DRAFT PICK COMPENSATION

Even if an international draft is implemented, teams that lose free agents are still eligible to receive a compensatory draft pick. Compensatory draft picks will be awarded as follows:

Clubs that receive revenue sharing will receive a third-round pick if the player signs for more than $35 million total or $18 million in average annual value, a compensation round B pick if the player signs for more than $55 million or $23 million in average annual value, a compensation round A pick if the player signs for more than $100 million or $30 million in average annual value, or a third-round pick and compensation round A pick if the player signs for more than $150 million or $40 million in average annual value.

Clubs that do not receive revenue sharing but don’t go over the CBT will receive a third-round pick if the player signs for more than $55 million or $23 million in average annual value, a compensation round B pick if the player signs for more than $100 million or $30 million in average annual value, or a compensation round A pick if the player signs for more than $150 million or $40 million in average annual value.

Clubs that go over the CBT will receive a third-round pick if the player signs for more than $100 million or $30 million in average annual value or a compensation round B pick if the player signs for more than $150 million or $40 million in average annual value.

 

DRAFT ORDER

The first six picks in each year’s draft will be awarded via lottery beginning in 2023. The 18 teams that do not qualify for the postseason will be eligible for the lottery, with odds assigned in reverse order of winning percentage.

The odds for receiving the No. 1 selection are as follows:

Worst record: 16.5%

Second-worst record: 16.5%

Third-worst record: 16.5%

Fourth: 13.25%

Fifth: 10%

Sixth: 7.5%

Seventh: 5.5%

Eighth: 3.9%

Ninth: 2.7%

10th: 1.8%

11th: 1.4%

12th: 1.1%

13th: 0.90%

14th: 0.76%

15th: 0.62%

16th: 0.48%

17th: 0.36%

18th: 0.23%

Revenue sharing recipients may not receive a lottery (i.e. top six) pick more than two years in a row. Teams that pay revenue sharing may not receive a lottery pick (i.e. top six) more than one year in a row.

Non-playoff teams who do not receive a lottery selection will pick in reverse order of winning percentage the previous season.

Playoff teams will select in order of postseason finish (i.e. Wild Card Round losers will pick before Division Series losers, etc.).

DRAFT SCHEDULE AND ELIGIBILITY

The draft will be 20 rounds and take place each year sometime between June 1 and July 20.

There will be an annual pre-draft combine that includes on-field assessments, medical evaluations and drug testing.

Players who submit to a pre-draft physical at the combine and are drafted are guaranteed to receive 75% of slot value, or the player will become a free agent if the drafting team fails to sign him.

Players drafted after the 10th round who do not sign by the signing deadline may go to junior college as a “draft-and-follow” and be eligible to sign with their drafting club before the following draft.

INTERNATIONAL PLAY AND SPECIAL EVENTS

Teams will stage games or tours in Mexico, Asia, Puerto Rico, the Dominican Republic, London and Paris over the next five years.

The number of domestic special events, such as the Little League Classic and Field of Dreams Game, will be increased.

DRUG TESTING

The number of in-season urine tests will be increased and the schedule of those tests adjusted to make them less predictable.

The league will now conduct utilized dried blood spot testing instead of venous blood draws to test for hGH.

The joint treatment program for alcohol-related and off-field violent conduct will be updated to include marijuana-related conduct.