MLB proposal includes 5-year max deals for free agents changing teams

Field Level Media

If Major League Baseball owners get their way, megadeals like those signed by Juan Soto with the New York Mets and Shohei Ohtani with the Los Angeles Dodgers will be a thing of the past, as part of their latest labor proposal to the MLB Players Association on Thursday.

The owners want to implement a maximum contract length of five years for all free agents who switch teams, along with six years for free agents who re-sign with their existing teams. They also want to remove contract deferrals like Ohtani’s 10-year, $700 million contract he signed in late 2023 that deferred $680 million of the deal.

Among the other items on the owners’ agenda Thursday included a $202 million limit on deals for free agents signing with other teams. There are more than 20 players in excess of that number, including four who more than double that proposed limit. Currently, the maximum contract value for a free agent staying put is six years at $265 million.

Regarding free agency and the minimum salary, the league proposed increasing that salary to $1 million from $780,000 next year for players who have reached two years of service time. Players below that line would earn $1 million if they have reached one full year of service time, including a $900,000 minimum salary plus an automatic $100,000 bonus from the Pre-Arbitration Bonus Pool. Per league data, that increase in the minimum salary is the latest year-over-year increase in the history of the league.

Also, players who have posted five years of service time by 30 would be eligible for free agency, one year less of service time than is currently on the docket. Since free agency began in 1976, it has taken six years of service time to earn free agency.

The league did not ask for changes to arbitration, but did propose eliminating qualifying offers and deferred contracts.

Regarding the maximum contract length, a player with less than a year of service can re-sign with his own team for up to 12 years, including six before free agency and six after. If the contract begins next year, the player could sign a 12-year, $500 million deal.

“Today, in addition to proposing the largest-ever increase in the minimum salary, earned by over half of MLB players, we accepted two landmark changes to free agency that have been in place for 50 years,” said MLB spokesperson Glen Caplin. “We agreed to both the MLBPA’s proposal to provide earlier access to free agency and their proposal to eliminate the qualifying offer system, a provision players view as a drag on free agency.”

The latest proposal hinges on the union accepting management’s recent salary cap plan, which the union has been strongly against. Thursday’s bargaining saw the union quickly reject the owners’ latest bid.

“The overall drag on player compensation here dramatically outweighs the benefits suggested here,” MLBPA interim executive director Bruce Meyer said soon thereafter. “Some of the suggested benefits are of no benefit or value at all in a cap system. … In a cap system, it’s a zero-sum game, and it’s just moving money around.” 

As for the risk of losing games next season due to an impasse in negotiations, the current labor agreement between the owners and the union does not expire until Dec. 1, so the sides still have time to work out a deal. Both sides are offering their takes on the future of the game without engaging in negotiated bartering.

“What’s being proposed now is really illusory given it’s all in the context of a cap,” Meyer said.