MLB luxury tax increases to $195M in new deal

Detroit — Major League Baseball and the players union Wednesday night reached a tentative agreement on a new collective bargaining agreement that will run through the 2021 season and ensure labor peace in the sport for the next five years.

The agreement was reached just before 9 p.m. Wednesday, three hours before the old CBA was set to expire. It is still subject to ratification and there are myriad details still to be worked out.

But the big issues, the potential sticking points, were worked out over a marathon bargaining session that spanned nearly 24 hours between Tuesday and Wednesday.

“CBA is done…baseball you may proceed with your regularly scheduled events,” Tigers ace Justin Verlander tweeted.

Specifics have yet to be released, but according to several national reports, here are some of the bullet points of the new agreement:

■ Luxury tax. Believed to be the final hurdle in the negotiations, the luxury tax threshold will increase from $189 million to $195 million this year. It will increase incrementally to $197 million in 2018, $206 million in 2019, $209 million in 2020 and $210 million in 2021.

The Tigers, currently with a total payroll of $216 million, clearly have some work to do before the end of the 2017 season.

The penalties for going over the threshold remain the same — 20 percent for the first offense, 30 percent after the second and 50 percent after the third — except there are severe penalties on offenders who exceed the threshold by more than $20 million. Those offenders would pay an additional surcharge of 12 percent.

Now you understand why the Tigers are trying to scale back their spending.

■ Free agent restrictions. Teams no longer lose a first round draft pick for signing an elite free agent (one who received and rejected a qualifying offer from their current team). Teams will still lose at least one pick for signing an elite free agent, believed to be a second round pick. If the signing team is over the tax threshold, it must also forfeit a fifth-round pick.

■ International draft. The owners wanted to institute an international draft. The players were dead set against that. The compromise: The sides agreed to a hard cap of $5 million on the amount clubs can spend annually to sign international players. There are no exceptions. Teams cannot exceed the limit.

■ Schedule modification. This is a victory for the players and for the game itself. The sides agreed to lengthen the season from 183 days to 187 beginning in 2018. That will add four more off days to the schedule. Also, it appears more day games will be scheduled on get-away days, especially when a team faces a long flight and a game the next day.

■ All-Star Game. As first reported by the Associated Press, the Midsummer Classic no longer will determine which league has home field advantage in the World Series. Instead, the pennant winner with the best record will get the extra home game in the Series.

■ Chew ban. Smokeless tobacco will be banned for all new players entering the majors. Those presently in the league will be exempt.

■ Drug policy. From several reports, the league will increase testing and players on suspension will not accrue big-league service time. Also, the league might begin testing for HGH (human growth hormone) beginning next year.

■ Minimum salary: A slight raise in minimum salary was negotiated: From $507,500 to $535,000 this year, then to $545,500 in 2018, to $555,000 in 2019. There would cost-of-living increases in the last two years of the CBA. Minor league players who have been on a club’s 40-man roster for two years also get a boost: From $82,700 to $86,500 this year, up to $88,000 in 2018 and $89,500 in 2019.

■ Baseball without borders. The league is pushing to play games in Mexico and London as early as 2018, according MLB.com. It is uncertain whether that was agreed to by the union and will be part of this CBA.

Twitter @cmccosky