1
Exhibit 10.1
1997-2000 (2001) BASIC AGREEMENT
TABLE OF CONTENTS
Page
----
ARTICLE I-Intent and Purpose........................................... 1
ARTICLE II-Recognition................................................. 1
ARTICLE III-Uniform Player's Contract.................................. 1
ARTICLE IV-Negotiation and Approval of Contracts ...................... 2
ARTICLE V-Scheduling................................................... 3
A. Length of Season............................................... 3
B. Championship Schedules ........................................ 3
C. Additional Scheduling Agreements .............................. 4
ARTICLE VI-Salaries.................................................... 7
A. Definition of Salary........................................... 7
B. Minimum Salary ................................................ 9
C. Standard Length of Season ..................................... 12
D. Maximum Salary Reduction ...................................... 12
E. Salary Continuation-Military Encampment ....................... 12
F. Salary Arbitration ............................................ 13
(1) Eligibility................................................ 13
(2) Trade Demand-Club Consent to Arbitration .................. 13
(3) Notice of Submission ...................................... 13
(a) Player Submission................................... 13
(b) Club Submission..................................... 14
(c) Special Exceptions to Maximum Salary
Reduction Rules.................................... 14
(4) Withdrawal from Arbitration................................ 14
(5) Timetable and Decision .................................... 14
(6) Form of Submission ........................................ 15
(7) Selection of Arbitrators .................................. 15
(8) Location of Hearings ...................................... 16
(9) Conduct of Hearings ....................................... 16
-i-
2
Page
----
(10) Continuances, Adjournments or Postponements .............. 16
(11) Hearing Costs ............................................ 16
(12) Criteria ................................................. 16
(13) Confidential Major League Salary Data .................... 17
(14) Prohibition Regarding Luxury Tax ......................... 17
ARTICLE VII-Expenses And Expense Allowances ........................... 18
A. Transportation and Travel Expenses............................. 18
B. In-Season Meal and Tip Allowance .............................. 19
C. Spring Training Allowances .................................... 20
D. Single Rooms on the Road ...................................... 22
E. All-Star Game ................................................. 22
F. In-Season Supplemental Allowances ............................. 22
ARTICLE VIII-Moving Allowances......................................... 23
ARTICLE IX-Termination Pay............................................. 24
A. Off-Season..................................................... 24
B. Spring Training ............................................... 24
C. In-Season ..................................................... 25
D. Split Contracts ............................................... 25
E. Injury ........................................................ 26
F. Non-Duplication ............................................... 26
ARTICLE X-World Series, League Championship Series
and Division Series Players' Pool............................ 26
A. Creation of Pool............................................... 26
B. Distribution of Pool .......................................... 27
C. Division of Players' Pool ..................................... 27
D. Guarantee of Pool ............................................. 27
ARTICLE XI-Grievance Procedure......................................... 28
A. Definitions.................................................... 28
B. Procedure ..................................................... 32
-ii-
3
Page
----
C. Special Procedure with Regard to Certain
Disciplinary Action....................................... 33
D. Grievances Initiated or Appealed by a Club .................... 34
E. Grievances Initiated or Appealed
by the Association........................................ 35
F. Miscellaneous ................................................. 35
G. Survival Following Termination of
Basic Agreement........................................... 36
ARTICLE XII-Discipline................................................. 36
A. Just Cause..................................................... 36
B. Notice ........................................................ 37
C. Discovery ..................................................... 37
D. Compliance .................................................... 37
E. Investigations ................................................ 37
F. Major League Rules 15 and 16 .................................. 38
ARTICLE XIII-Safety and Health......................................... 38
A. Safety and Health Advisory Committee .......................... 38
(1) Safety and Health Advisory Committee ...................... 38
(2) Committee Meetings ........................................ 38
(3) Power and Authority of Committee .......................... 39
(4) Other Rights and Remedies ................................. 39
B. Safety Complaints-Responsibility of
League President.......................................... 39
C. Disabled List ................................................. 39
D. Second Medical Opinion ........................................ 40
E. Trainers ...................................................... 40
F. Locker Room Equipment ......................................... 41
G. Medical Records ............................................... 41
ARTICLE XIV-Spring Training Conditions................................. 41
A. Reporting...................................................... 41
B. Living Away from Club Headquarters ............................ 41
C. Meetings with Players ......................................... 41
-iii-
4
Page
----
ARTICLE XV-Miscellaneous............................................... 42
A. No Discrimination.............................................. 42
B. Parking Facilities ............................................ 42
C. Winter League Play ............................................ 42
D. College Scholarship Plan ...................................... 42
E. Active Player Limit ........................................... 42
F. Spanish Translations and ESL Courses .......................... 43
G. Future Expansion .............................................. 43
H. Default Notice ................................................ 44
I. International Play ............................................ 44
J. Interest Rate ................................................. 46
K. Players Association Tickets ................................... 46
L. Family and Medical Leave Act .................................. 47
ARTICLE XVI-Deferred Compensation...................................... 47
ARTICLE XVII-Existing Agreements....................................... 47
ARTICLE XVIII-Rule Changes............................................. 48
ARTICLE XIX-Assignment of Player Contracts ............................ 48
A. Consent to Assignment.......................................... 48
B. Assignment to National Association Club ....................... 50
C. Disabled List-Assignment to
National Association Club................................. 50
D. Foreign Assignments ........................................... 51
E. Optional Assignments .......................................... 51
F. Waivers ....................................................... 51
G. Designated Player ............................................. 52
H. Unconditional Release ......................................... 52
ARTICLE XX-Reserve System.............................................. 53
A. Reservation Rights Of Clubs.................................... 53
B. Free Agency ................................................... 54
(1) Eligibility................................................ 54
-iv-
5
Page
----
(2) Procedure ................................................. 54
(3) Rights of Former Club to Sign Free Agent .................. 55
(4) Compensation .............................................. 56
(5) Quota ..................................................... 58
(6) Miscellaneous ............................................. 58
C. Right to Require Assignment of Contract ....................... 58
(1) Eligibility................................................ 58
(2) Procedure ................................................. 59
(a) Notice ............................................. 59
(b) Player Veto Rights.................................. 59
(c) Free Agency if Assignment Not Made ................. 59
(3) Retraction by Player....................................... 59
(4) Waiver by Player .......................................... 60
(5) Repeater Rights ........................................... 60
D. Outright Assignment to National Association Club .............. 61
(1) Election of Free Agency-3-Year Player ..................... 61
(2) Election of Free Agency-Second
Outright Assignment.................................... 61
(3) Effect of Free Agency Election ............................ 61
(4) Procedure ................................................. 62
E. Individual Nature of Rights.................................... 62
ARTICLE XXI-Credited Major League Service ............................. 64
A. Definition..................................................... 64
B. Optional Assignments .......................................... 65
ARTICLE XXII-Management Rights......................................... 65
ARTICLE XXIII-Luxury Tax............................................... 65
A. General Definitions............................................ 65
B. Determination of Luxury Tax ................................... 66
(1) Calculation of Tax ........................................ 66
(2) Initial Thresholds ........................................ 67
(3) Threshold Adjustment Mechanism ............................ 67
-v-
6
Page
----
(4) Additional 1997 Threshold Adjustment ...................... 67
(5) Tax Rate .................................................. 68
(6) Collection of Luxury Tax Proceeds ......................... 68
C. Determination of Actual Club Payroll .......................... 68
(1) Definition of Actual Club Payroll.......................... 68
(2) Rules for Allocation of Salary ............................ 69
(a) General Rule........................................ 69
(b) Assignment of Contract.............................. 69
(c) Salary Increase Upon Assignment..................... 69
(d) Contract Signed After Opening Day................... 69
(e) Termination of Contract............................. 70
(f) Split Contracts..................................... 70
(g) Outright Assignment to
National Association ............................... 70
D. Benefits or Player Benefit Costs............................... 71
(1) Definition................................................. 71
(2) Limitation on Annual Increase ............................. 72
E. Determination of Salary........................................ 72
(1) General Rule............................................... 72
(2) Average Annual Value of
Guaranteed Multi-Year Contracts ....................... 72
(3) Signing Bonuses ........................................... 73
(4) Performance, Award and Other Bonuses ...................... 73
(5) Option Contracts .......................................... 73
(6) Deferred Compensation ..................................... 77
(7) Loans to Players .......................................... 78
F. Association's Rights .......................................... 79
(1) Actual Club Payroll Information............................ 79
(2) Association's Rights to Challenge ......................... 80
G. Other Undertakings............................................. 82
H. Uses Of Luxury Tax Proceeds ................................... 83
ARTICLE XXIV-Payroll Tax............................................... 84
A. Purpose........................................................ 84
-vi-
7
Page
----
B. Total Payment ................................................. 84
C. Modifications to Definition of Final Actual Club
Payroll for Contract Years 1996 and 1997 ................. 84
D. Calculation of Total Payment .................................. 85
E. Date of Payment and Uses ...................................... 86
ARTICLE XXV-The Revenue Sharing Plan................................... 86
A. Definitions.................................................... 86
B. General Principles ............................................ 88
(1) Intent of the Plan......................................... 88
(2) Other Sharing ............................................. 89
(3) Accounting Rules .......................................... 89
(4) Interests of the Association .............................. 90
(5) Other Undertakings ........................................ 90
C. Operation...................................................... 91
(1) 1996 ...................................................... 91
(2) 1997 ...................................................... 92
(3) 1998 ...................................................... 92
(4) 1999 ...................................................... 94
(5) 2000 ...................................................... 95
(6) 2001 (If Association Option Exercised) .................... 95
D. Administration................................................. 95
(1) Responsibility............................................. 95
(2) Duties of Administrator ................................... 95
(3) Specific Prohibition ...................................... 97
E. Participation of the Association............................... 98
(1) Consultation............................................... 98
(2) Right to Information ...................................... 99
(3) Right to Audit ............................................ 100
(4) Confidentiality ........................................... 101
ARTICLE XXVI-The Industry Growth Fund.................................. 102
A. Objective and Purposes......................................... 102
B. Joint Activities .............................................. 102
-vii-
8
Page
----
C. Administration ................................................ 102
(1) Board of Directors......................................... 102
(2) Co-Operating Officers ..................................... 103
D. Dispute Resolution............................................. 103
(1) Disputes Concerning Joint Activities ...................... 103
(2) Disputes Subject to Resolution by the
Independent Member..................................... 104
(3) Other Disputes ............................................ 104
E. Funding........................................................ 104
(1) Initial Funding............................................ 104
(2) Luxury Tax Proceeds ....................................... 105
(3) Payroll Tax Proceeds ...................................... 105
(4) Additional Voluntary Contributions ........................ 105
F. Option Exercise................................................ 105
G. Continuation of IGF After the
Termination of the Basic Agreement ....................... 105
ARTICLE XXVII-Term..................................................... 106
A. Duration of the Contract....................................... 106
B. Association Option to Extend Through the
2001 Season............................................... 106
C. Events Affected by the Option to Extend ....................... 106
(1) Division Series Pool....................................... 106
(2) Creation of the Fictional Option Pool Account ............. 106
(3) Events That Occur if the Association Exercises
its Option............................................. 107
(4) Events That Occur if the Association Does Not
Exercise its Option.................... ............... 107
ARTICLE XXVIII-Antitrust............................................... 107
ARTICLE XXIX-Comprehensive Agreement................................... 107
ARTICLE XXX-Execution of this Agreement................................ 108
ATTACHMENT 1-Delivery and Availability of
Player Contracts..................................................... 110
-viii-
9
Page
----
ATTACHMENT 2-Interleague Play.......................................... 110
ATTACHMENT 3-Division Series Play...................................... 112
ATTACHMENT 4-Article VII(B)(5)(b)-Disabled Players
Who Do Not Travel with Club.......................................... 118
ATTACHMENT 5-Commissioner's Letter on
Grievance Procedure.................................................. 118
ATTACHMENT 6-Interest Awards........................................... 119
ATTACHMENT 7-Safe and Healthful Working Conditions .................... 119
ATTACHMENT 8-Standard Form of Diagnosis................................ 120
ATTACHMENT 9-Translated Notices........................................ 121
ATTACHMENT 10-Major League Expansion Rules
and Procedures....................................................... 121
ATTACHMENT 11-Disabled Player Not on Disabled
List-Assignment to National Association.............................. 126
ATTACHMENT 12-Article XX(A)-Exercise of Free
Agency Rights by Player on Restricted, Suspended,
Disqualified, Ineligible, Voluntarily Retired or
Military Lists....................................................... 126
ATTACHMENT 13-Article XX(A)-Clubs' Obligations to
Tender and Renew Contracts of Players on Restricted,
Suspended, Disqualified, Ineligible, Voluntarily
Retired or Military Lists............................................ 127
ATTACHMENT 14-Article XX(A)-National Association
Player with No Existing Major League Contract ....................... 128
ATTACHMENT 15-Information Bank......................................... 128
ATTACHMENT 16-Supplemental Pool-Growth Increases ...................... 129
ATTACHMENT 17-Confidentiality Agreement................................ 130
ATTACHMENT 18-Sale of Club............................................. 132
ATTACHMENT 19-Scheduling of Games...................................... 132
-ix-
10
Page
----
ATTACHMENT 20-Family Security.......................................... 133
ATTACHMENT 21-Player Development Issues................................ 134
ATTACHMENT 22-Strike Settlement........................................ 135
EXHIBIT 1-1994 Major League Service............................... 143
EXHIBIT 2-1994 Major League Service .............................. 146
EXHIBIT 3-1994 Major League Service .............................. 147
EXHIBIT 4-Service Issues.......................................... 148
EXHIBIT 5-Benefit Plan Documents.................................. 150
EXHIBIT 6-Contributions to Benefit Plans ......................... 155
SCHEDULE A-Uniform Player's Contract................................... 159
-Regulations................................................. 169
APPENDIX A-Rules of Procedure-Grievance
Arbitration Hearings ....................................... 172
-x-
11
1997-2000 (2001) BASIC AGREEMENT
This Agreement, dated as of the 7th of December 1996, is between the Clubs
comprising The National League of Professional Baseball Clubs and the Clubs
comprising The American League of Professional Baseball Clubs (hereinafter
referred to as the "Clubs"), and the Major League Baseball Players Association
(hereinafter referred to as the "Players Association" or the "Association").
The provisions of this Agreement shall be effective January 1, 1997, unless a
provision herein provides otherwise.
In making this Agreement the Association represents that it contracts for and on
behalf of the Major League Baseball Players and individuals who may become Major
League Baseball Players during the term of this Agreement, and the Clubs
represent that they contract for and on behalf of themselves, any additional
Clubs which may become members of the Major Leagues and the successors thereof.
ARTICLE I-INTENT AND PURPOSE
The intent and purpose of the Clubs and the Association (hereinafter "the
Parties") in entering into this Agreement is to set forth their agreement on
certain terms and conditions of employment of all Major League Baseball Players
for the duration of this Agreement. Each of the Parties acknowledges the rights
and responsibilities of the other Party and agrees to discharge its
responsibilities under this Agreement.
ARTICLE II-RECOGNITION
The Clubs recognize the Association as the sole and exclusive collective
bargaining agent for all Major League Players, and individuals who may become
Major League Players during the term of this Agreement, with regard to all terms
and conditions of employment, provided that an individual Player shall be
entitled to negotiate in accordance with the provisions set forth in this
Agreement (1) an individual salary over and above the minimum requirements
established by this Agreement and (2) Special Covenants to be included in an
individual Uniform Player's Contract, which actually or potentially provide
additional benefits to the Player.
ARTICLE III-UNIFORM PLAYER'S CONTRACT
The form of the Uniform Player's Contract between a Club and a Player is
attached hereto as Schedule A which is incorporated herein by reference and made
a part hereof.
-1-
12
During the term of this Agreement, no other form of Uniform Player's Contract
will be utilized. Should the provisions of any Contract between any individual
Player and any of the Clubs be inconsistent with the terms of this Agreement,
the provisions of this Agreement shall govern. Subject to the limitations set
forth in Article IV below, nothing herein contained shall limit the right of
any Club and Player to enter into Special Covenants in the space provided in a
manner not inconsistent with the provisions of this Agreement. The termination
of this Agreement shall not impair, limit or terminate the rights and duties of
any Club or Player under any Contract between any individual Player and any of
the Clubs.
ARTICLE IV-NEGOTIATION AND APPROVAL OF CONTRACTS
A Player, if he so desires, may designate an agent to conduct on his behalf, or
to assist him in, the negotiation of an individual salary and or Special
Covenants to be included in his Uniform Player's Contract with any Club,
provided such agent has been certified to the Clubs by the Association as
authorized to act as a Player Agent for such purposes.
A Club may require a Player's physical presence only once during contract
negotiations. This limitation shall not apply to telephone conference calls, at
reasonable times, with a Player and his certified Player Agent. A Player
required to be physically present during negotiations shall be entitled to be
paid by the Club for round-trip first-class transportation and first-class hotel
costs.
Upon execution of a Uniform Player's Contract by the Club and Player, the Club
promptly shall submit the Contract, in duplicate, to the Commissioner (or his
designee) who, after review, shall forward it to the appropriate League
President for approval. Within 20 days of receipt by the Commissioner, the
League President shall approve or disapprove the Contract (with notice to the
Association), or provide the Association with a written explanation of why the
Contract has not been approved. This period is extended to 30 days if a Contract
is received by the Commissioner between February 15 and April 15. Within ten
days after the League President is to provide an explanation of why a Contract
has not been approved, the League President shall approve or disapprove the
Contract. (See Attachment 1.) Any Grievance challenging the Commissioner's or
the League President's conduct under this Article shall be handled by the
Parties on an expedited basis with documents being exchanged within 10 days of
the filing of the Grievance, a hearing commencing within 15 days of the filing
of the Grievance and the Panel issuing an Award (with an opinion to follow, if
necessary) no later than 15 days following the commencement of the hearing.
-2-
13
ARTICLE V-SCHEDULING
A. LENGTH OF SEASON
During the term of this Agreement, each Club shall be scheduled to play 162
games during each championship season. (See Attachment 2 (Interleague Play).) A
championship season will not be scheduled over a period of less than 178 days or
more than 183 days. (See also Article VI(C), below.) Following completion of
each championship season, eight Clubs shall engage in best of five (seven if the
Division Series is expanded) Division Series. (See Attachment 3.) The winners of
the Division Series in each League shall then engage in a best of seven League
Championship Series, and the winners of the two League Championship Series shall
engage in a best of seven World Series. If during the term of this Agreement the
format of the Division Series, the League Championship Series or the World
Series is proposed to be changed, the Clubs shall give the Association notice
thereof and shall negotiate the proposed change with the Association; provided,
however, that if during the term of this Agreement the Division Series is
proposed to be changed to the best of seven games, the Clubs shall give the
Association notice thereof and shall negotiate with the Association but the
Clubs shall not be required to negotiate with the Association over contributions
to the Players' pool beyond those specified in Article X. Any failure to play
the Division Series, the League Championship Series or the World Series, in
whole or in part, by reason of causes beyond the control of the Clubs, shall not
constitute a change in the format of such Series or a breach of this Agreement.
During any negotiations between the Parties on the subject of a renewal of or
successor to this Agreement, the Clubs agree that any proposal made by the
Association to reduce the number of championship season games shall not be
resisted on the ground of commitments made by the Clubs in local television and
radio contracts. However, nothing herein shall interfere with or limit the right
of the Clubs to resist such proposal on any other ground or the right of either
Party to take any other position in future negotiations on this or any other
proper subject for collective bargaining.
B. CHAMPIONSHIP SCHEDULES
On or before July 1st of each year, copies of the tentative championship
schedules of the Major Leagues for the next ensuing season shall be submitted to
the Association for review. The Association shall complete its review not later
than October 15th.
-3-
14
C. ADDITIONAL SCHEDULING AGREEMENTS
(1) Split doubleheaders shall not be scheduled in the original schedule.
Provided that neither of the Clubs involved in the proposed rescheduled game
already has played or has been rescheduled to play a total of two split
doubleheaders in that championship season:
(a) each Club shall have the right to reschedule any postponed game as
a split doubleheader when ticket sales for the game at the time of
postponement exceed, in any respect, the number of comparable tickets
available to be exchanged by the Club for the balance of the championship
season, and both the postponed and rescheduled game occur in the last
regularly scheduled series between the two Clubs at the Club's park; and
(b) when there is no practical alternative to doing so, the Boston Red
Sox and Chicago Cubs shall have the right to reschedule a postponed game as
a split doubleheader to be played in, respectively, Fenway Park and Wrigley
Field, even if the criteria set out in subparagraph (a) above are not met.
Scheduling a postponed game as part of a conventional doubleheader will not
be considered a practical alternative.
The Association shall have the exclusive right to approve the additional
rescheduling of postponed games as split doubleheaders in circumstances
that are not automatically permitted by subparagraph (a) or (b) above.
(2) One-day stands will not be scheduled except as "openers" or
doubleheaders to be followed by an open day. A game will not be rescheduled
as a one-game stand except as required to complete the championship schedule.
(3) Not more than one exhibition game shall be played by any Club during
the championship season, unless the Club is permitted one additional
exhibition game by its League President from a quota of four additional
exhibition games each League President may distribute in his League,
excluding the All-Star Game and the Hall of Fame Game. No Club may play more
than two exhibition games during a championship season. The scheduling and
rescheduling of exhibition games shall be in accordance with the scheduling
and rescheduling rules set forth in this Article V with respect to
championship season games, except that paragraph (2) above prohibiting
one-day stands shall not apply. For purposes of this paragraph (3), an
exhibition game that is scheduled to commence at least three hours before the
scheduled start of the first championship season game shall not be considered
played "dur-
-4-
15
ing the championship season." No exhibition game shall be scheduled to
commence within three (3) hours before the scheduled start of the first
championship season game of any year.
(4) The following shall apply to the scheduling or rescheduling of games
prior to day doubleheaders:
(a) a game will not be scheduled to start after 5 P.M. if either Club
is scheduled to play a day doubleheader the next day;
(b) a game will not be rescheduled to start after 5 P.M. if either Club
is scheduled to play a day doubleheader the next day unless such
rescheduling is necessary to complete the championship schedule.
(5) Day games shall not be scheduled or (unless necessary to complete the
championship schedule) rescheduled to start before 1 P.M., except as provided
in paragraph (6) below, and except that such games may be scheduled or
rescheduled to start between Noon and 1 P.M., if each Club meets one of the
following two conditions:
(a) if an off-day occurred the previous day; or
(b) if a game were played in the same city within the previous 24
hours.
Day games may be scheduled or rescheduled to start between Noon and 1 P.M. on
holidays if each Club meets one of the above conditions or if an afternoon
game starting not later than 5 P.M. or a doubleheader starting not later than
1:30 P.M. was played in another city the previous day and the travel time
required in-flight is 1 1/2 hours or less.
(6) With the approval of the League President, not more than 4 games per
League per year may be scheduled or rescheduled to start between 10:30 A.M.
and Noon, if, with respect to both Clubs, the conditions stated in paragraph
(5) above with respect to scheduling and rescheduling of day games between
Noon and 1 P.M. are met.
(7) Games shall not be scheduled or rescheduled to start later than 5 P.M.
on a getaway day if either Club is required to travel for a day game,
scheduled the next day, between cities in which the in-flight time is more
than 1 1/2 hours. Each championship season the Clubs may utilize six
exceptions to the foregoing rule provided that the exceptions must be
utilized by a Club traveling to Chicago to play the Cubs and the in-flight
time cannot exceed 2 1/2 hours.
-5-
16
(8) To the extent reasonably practicable, open days shall be non-travel
days, except as permitted in paragraph (9) below.
(9) An open day shall be scheduled for or following travel from cities in
the Pacific time zone to cities in the Eastern time zone except that, each
League may schedule not more than seven (7) games per championship season
with a starting time after 7 P.M. in the Eastern time zone which include a
Club that the day before played a game scheduled to start prior to 5 P.M. in
the Pacific time zone. In any championship season, however, no Club may be
scheduled to play more than one (1) game in the Eastern time zone the day
after it has played a game in the Pacific time zone.
(10) No Club shall be scheduled, or rescheduled if practicable, to play
more than 20 consecutive dates without an open day, or 21 consecutive dates
if necessary to accommodate the Hall of Fame Game. A rained-out game may be
rescheduled to an open date in the same series, or to an open date at the end
of the same series, if (a) the open date is a road off-day for the visiting
Club, and (b) the rescheduling does not result in the home team playing more
than 20 consecutive dates without an open day, or 21 consecutive dates if
necessary to accommodate the Hall of Fame Game.
(11) Commencing with its second scheduled championship season game, a Club
shall not be scheduled for more than two open days in any seven-day period.
For each violation of this provision, the number of exhibition games which
have been or may be scheduled at any time for the Club under paragraph (3)
above, shall be reduced by one. Any other appropriate remedy may be imposed
for a violation of this provision if a Club has already played the maximum
permitted number of exhibition games.
(12) Home games which are scheduled or rescheduled away from the park of
the home Club shall be considered road games for the purposes of Players'
meal and tip allowances, hotel accommodations and transportation.
(13) Doubleheaders shall not be scheduled on consecutive dates in the
original schedule.
(14) Twi-night doubleheaders will be limited in the original schedule to
three per home Club per season. A twi-night doubleheader will not be
scheduled on a getaway day.
(15) Only postponed, suspended and tied games shall be rescheduled, except
as may be required to accommodate network
-6-
17
television commitments or to comply with stadium leases, in any of which
events the rescheduling rules set forth in this Article V shall apply;
provided, however, that any game may be rescheduled for any reason if as
rescheduled it conforms to the rules governing the original schedule.
(16) Club championship or exhibition games shall not be played during the
All-Star break. Further, any workout scheduled by a Club for the day
following the All-Star Game shall be voluntary.
(17) With respect to the rescheduling of any game, except for games
rescheduled as split doubleheaders as set forth in Section C(1), any
scheduling or rescheduling rule set forth in this Article V may be waived by
the secret ballot vote of a majority of the Players on the Club(s) that would
be in violation of the rule. Separate votes shall be required with regard to
each game for which a waiver is sought. A waiver granted pursuant to this
provision, as well as a waiver granted by the Association pursuant to Section
C(1), shall not constitute a precedent with regard to future waiver requests.
With respect to the rescheduling of any such game, and all games rescheduled
pursuant to Section C(1), the Club(s) shall consult with the Association
concerning the actual date and time of such rescheduled game. The Club(s)
shall use best efforts to notify the Association in advance of notifying the
Players on the Club(s) affected.
ARTICLE VI-SALARIES
Individual Player salaries shall be those as agreed upon between a Player and a
Club, as evidenced by the execution of a Uniform Player's Contract, subject to
the following:
A. DEFINITION OF SALARY
The term "salary" for the purposes of interpretation and application of the
maximum salary cut, contract tender, signing and renewal rules shall be
determined by applying the following principles:
(1) Multi-year contract providing for current salary only (no up-front
payment or deferred compensation).
(a) If the annual salary payment schedule satisfies the maximum salary
cut rule, the salary specified for the last year of the contract shall be the
base for applying the maximum salary cut rule to the year following the
expiration of the contract.
-7-
18
(b) If the annual salary payment schedule does not satisfy the maximum
salary cut rule, that rule shall not be applicable during the term of the
contract and the aggregate salary payment provided by the contract shall be
averaged and the average annual salary shall be the base for applying the
maximum salary cut rule to the year following the contract's expiration.
(2) Multi-year contract including up-front payments and/or deferred
compensation which are specifically allocated to one or more years of the
contract.
Treat as in (1) above with the allocated up-front or deferred
amounts included as specified as part of the salary for each year.
(3) Multi-year contract including up-front payments and/or deferred
compensation which are not specifically allocated to certain years of the
contract.
Average the aggregate of such payments, include the annual average
as part of the salary for each year, and then treat as in (1) above.
(4) Deferred Compensation.
If any deferred compensation is included in the base determined as
described above, it may be payable as deferred on the same terms, or
the Club and Player may elect to substitute the discounted present
value of such deferred amount.
(5) Performance Bonuses.
Regardless of whether or not any portion of a performance bonus is
earned, the Club has the option of either: (a) including the entire
bonus (both earned and unearned portions) in the salary base or (b)
excluding it from the base but repeating the performance bonus on the
same terms.
(6) Other Forms of Additional Compensation.
All other forms of compensation, including but not limited to the
following, are not addressed herein and are to be determined according
to the facts in each situation:
(a) payments for performing services for a Club in addition to
skilled services as a baseball player;
(b) cash, lump sum, payments made in accordance with agreed upon
special covenants to compensate for trading a Player, releasing a
Player, etc.;
-8-
19
(c) the value of individual property rights granted to a Player by a Club;
(d) any compensation for post-active Major League Baseball playing career
employment;
(e) other payments not specifically made for performance as a Major League
Baseball Player;
provided that any amounts payable upon the occurrence of a specific event or
events shall not be included in the definition of "salary" if such event or
events fail to occur within the specified period.
(7) Disputes.
In the event of a dispute regarding a contract tender, signing or renewal
with respect to any form of additional compensation referred to in paragraph
(6) above, either the Player or Club may file a Grievance in order to obtain
a determination with respect thereto as the exclusive means of resolving such
dispute, and both parties shall be bound by the resulting decision. The
contract tender, signing or renewal shall be altered as necessary to conform
to the decision, and such tender, signing or renewal shall remain valid.
B. MINIMUM SALARY
(1) The minimum rate of payment to a Player for each day of service on a
Major League Club shall be as follows:
1996-at the rate per season of $109,000 from the beginning of the
championship season up to and including July 30, 1996, and at the rate per
season of $150,000 beginning on July 31, 1996 up to and including the end of
the 1996 championship season;
1997-at the rate per season of $150,000;
1998-at the rate per season of $170,000;
1999-at the rate per season of $200,000;
2000-at the rate per season of $200,000, if the Association exercises its
option to extend this Agreement under Article XXVII. If the Association does
not exercise its option, the minimum salary shall be at the rate per season
of $200,000 plus a cost of living adjustment, rounded to the nearest $500,
provided that the cost of living adjustment shall not reduce the minimum
salary below $200,000. Any adjusted minimum salary
-9-
20
shall apply for the entire championship season and retroactive payments, if
required, shall be made no later than 15 days from the date the Association
does not exercise its option;
2001-at the rate per season of $200,000, if the Association exercises its
option to extend this Agreement under Article XXVII. If the Association does
not exercise its option, the minimum salary shall be at the rate per season
equal to the adjusted rate for the 2000 season plus a cost of living
adjustment, rounded to the nearest $500, provided that the cost of living
adjustment shall not reduce the minimum salary below the adjusted 2000 rate.
(2) For all Players (a) signing a second Major League contract (not covering
the same season as any such Player's initial Major League contract) or a
subsequent Major League contract, or (b) having at least one day of Major League
service, the minimum salary shall be as follows:
(i) for Major League service-at a rate not less than the Major League
minimum salary;
(ii) for National Association service-at a rate not less than the
following:
1996-$28,900 per season;
1997-at the rate per season of $37,000;
1998-at the rate per season of $37,000;
1999-at the rate per season equal to $37,000 plus a cost of living
adjustment, rounded to the nearest $100, provided that the cost of living
adjustment shall not reduce the minimum salary below $37,000;
2000-at the 1999 rate per season, if the Association exercises its
option to extend this Agreement under Article XXVII. If the Association
does not exercise its option, the minimum salary shall be at the rate per
season equal to the rate for the 1999 season plus a cost of living
adjustment, rounded to the nearest $100, provided that the cost of living
adjustment shall not reduce the minimum salary below the 1999 rate. Any
adjusted minimum salary shall apply for the entire championship season and
retroactive payments, if necessary, shall be made no later than 15 days
from the date the Association does not exercise its option;
2001-if the Association exercises its option to extend this Agreement
under Article XXVII, at the rate per season equal
-10-
21
to the rate for the 1999 season plus a cost of living adjustment, rounded
to the nearest $100, provided that the cost of living adjustment shall not
reduce the minimum salary below the 1999 rate. If the Association does not
exercise its option, the minimum salary shall be at the rate per season
equal to the adjusted rate for the 2000 season plus a cost of living
adjustment, rounded to the nearest $100, provided that the cost of living
adjustment shall not reduce the minimum salary below the adjusted 2000
rate.
(3) (a) Cost of living adjustments for the Major League minimum salary
described above in paragraph (1) shall be computed as follows, if required:
to determine the 2000 salary rate, $200,000 shall be multiplied by a
fraction, the numerator of which is the Consumer Price Index for Urban Wage
Earners and Clerical Workers published by the Bureau of Labor Statistics
(CPIW) for November 1999 and the denominator of which is the CPIW for
November 1998;
to determine the 2001 salary rate, the adjusted 2000 rate shall be
multiplied by a fraction, the numerator of which is the CPIW for November
2000 and the denominator of which is the CPIW for November 1999.
(b) Cost of living adjustments for the split minimum salary for National
Association service described above in paragraph (2) shall be computed as
follows:
to determine the 1999 salary rate, $37,000 shall be multiplied by a
fraction, the numerator of which is the CPIW for November 1998 and the
denominator of which is the CPIW for November 1996;
to determine the 2000 salary rate, if required, the 1999 salary rate
shall be multiplied by a fraction, the numerator of which is the CPIW for
November 1999 and the denominator of which is the CPIW for November 1998;
to determine the 2001 salary rate, if the Association exercises its
option to extend this Agreement under Article XXVII, the salary rate for
the 2000 season shall be multiplied by a fraction, the numerator of which
is the CPIW for Novem-ber 2000 and the denominator of which is the CPIW for
November 1998;
to determine the 2001 salary rate, if the Association does not exercise
its option, the adjusted salary rate for 2000 shall
-11-
22
be multiplied by a fraction, the numerator of which is the CPIW for
November 2000 and the denominator of which is the CPIW for November 1999.
C. STANDARD LENGTH OF SEASON
For the purpose of calculating a Player's daily rate of pay, a champion-ship
season shall be deemed to commence on the date of the first regularly scheduled
championship season game and to conclude on the date of the last regularly
scheduled championship season game. This rule shall apply uniformly to all
Players and all Clubs notwithstanding differences in a particular Club's
schedule.
D. MAXIMUM SALARY REDUCTION
(1) No Player's contract shall be renewed pursuant to paragraph 10(a) of
the Uniform Player's Contract in any year for a salary which constitutes a
reduction in excess of 20% of his previous year's salary or in excess of 30%
of his salary two years previous. For the purposes of this section, the
"salary" of a Player with a salary stipulated in paragraph 2 of his Major
League contract of less than the then applicable Major League minimum salary
shall be deemed to be the greater of either (a) the total amount of his
actual baseball salary earnings from Major League Clubs (and from National
Association clubs if any) in that season or (b) the amount stipulated in
paragraph 2 of his Major League contract for that season.
(2) The term "salary" shall include any salary amounts which were not paid
to a Player for the season by reason of any fine or suspension which may have
been imposed on the Player, or by reason of any other deduction from salary.
(3) In tendering a contract to a Player pursuant to paragraph 10(a) of the
Uniform Player's Contract, no Major League Club shall offer a salary which
constitutes a reduction in excess of 20% of the Player's previous year's
salary or in excess of 30% of his salary two years previous.
E. SALARY CONTINUATION-MILITARY ENCAMPMENT
Payment of Player salaries shall be continued throughout any period in which a
Player is required to attend a regularly scheduled military encampment of the
Reserve of the Armed Forces or of the National Guard during the Club's playing
season.
-12-
23
F. SALARY ARBITRATION
The following salary arbitration procedure shall be applicable:
(1) Eligibility. The issue of a Player's salary may be submitted to final
and binding arbitration by any Player or his Club, provided the other party
to the arbitration consents thereto. Any Club, or any Player with a total of
three or more years of Major League service, however accumulated, but with
less than six years of Major League service, may submit the issue of the
Player's salary to final and binding arbitration without the consent of the
other party, subject to the provisions of paragraph (4) below.
In addition, a Player with at least two but less than three years of Major
League service shall be eligible for salary arbitration if: (a) he has
accumulated at least 86 days of service during the immediately preceding
season; and (b) he ranks in the top seventeen percent (17%) (rounded to the
nearest whole number) in total service in the class of Players who have at
least two but less than three years of Major League service, however
accumulated, but with at least 86 days of service accumulated during the
immediately preceding season. If two or more Players are tied in ranking,
ties shall be broken consecutively based on the number of days of service
accumulated in each of the immediately preceding seasons. If the Players
remain tied, the final tie breaker will be by lot.
(2) Trade Demand-Club Consent to Arbitration. Any Player whose Club has
offered to proceed to salary arbitration pursuant to Article XX(C)(5) may
elect salary arbitration in the same manner and at the same time as other
Players.
(3) Notice of Submission.
(a) PLAYER SUBMISSION. Election of submission shall be communicated by
telephone or any other method of communication by the Player to the
Association. Written notice of submission shall then be given, within the
specified time limits, by the Association on behalf of the Player to the
designated representative of the Major League Baseball Player Relations
Committee, Inc. ("PRC").
Within three days after the notice of submission has been given, the
Association and the PRC shall exchange salary figures. It shall be the
responsibility of the Association during this three-day period to obtain
the salary figure from the Player, and the PRC shall have a similar
responsibility to obtain the Club's figure.
-13-
24
(b) CLUB SUBMISSION. Written notice of submission by the Club shall be
communicated to the Player by registered letter mailed between January 2
and January 12 (both inclusive) to the last address the Player has supplied
to the Club, with copies to the Association and the PRC. The submission
shall be deemed to be made on the third day following the date of mailing
by the Club. Salary figures shall be exchanged by the Association and the
PRC as soon as practicable thereafter.
(c) SPECIAL EXCEPTIONS TO MAXIMUM SALARY REDUCTION RULES.
(i) A Club may submit a salary figure for salary arbitration that
is at least 80% of the Player's previous year's salary and earned
performance bonuses (and at least 70% of his salary and earned
performance bonuses two years previous), the provisions of Section A(5)
above notwithstanding. This exception shall not be used by any party,
or considered by any salary arbitrator, in support of, or in opposition
to, any argument regarding the evaluation of Player contracts.
(ii) A Club may submit a salary arbitration figure without regard
to the provisions of Section D above if the figure submitted is with
respect to a Player who, in the immediately preceding year, won a
salary arbitration which increased the Player's prior year's salary by
in excess of 50%.
The above exceptions to the maximum salary reduction rules do not alter the
obligations of the Clubs to comply with Articles VI(D) and XX(A) of this
Agreement and paragraph 10(a) of the Uniform Player's Contract for the
purposes of contract tender and renewal.
(4) Withdrawal from Arbitration. In the event the Club submits the matter
to arbitration, the Player may within 7 days after receipt of the Club's
salary arbitration figure notify the Club that he does not wish to arbitrate
and the matter shall be deemed withdrawn from arbitration. In such event, or
in the event that neither the Club nor the Player submits to arbitration, the
rights and obligations of the Club and Player shall be as they would have
been had the salary arbitration procedure never been invoked. In the event
the Club and Player reach agreement on salary before the arbitrator or
arbitration panel reaches a decision, the matter shall be deemed withdrawn
from arbitration.
(5) Timetable and Decision. Submission may be made at any time between
January 5 and January 15. In the event the offer of the Club is reduced on or
subsequent to January 15, the Player's right to submit to arbitration shall
be reinstated for a period of 7
-14-
25
days. Arbitration hearings shall be held as soon as possible after submission
and, to the extent practicable, shall be scheduled to be held from February 1
to February 20. The arbitrator or arbitration panel may render the decision
on the day of the hearing, and shall make every effort to do so not later
than 24 hours following the close of the hearing. The arbitrator or
arbitration panel shall be limited to awarding only one or the other of the
two figures submitted. There shall be no opinion. There shall be no release
of the arbitration award by the arbitrator or arbitration panel except to the
Club, the Player, the Association and the PRC. In each case involving an
arbitration panel, the panel chair shall initially inform the Association and
the PRC of the award only and not how the panel members voted. The panel
chair shall disclose to the Association and the PRC the individual votes of
the panel members on the June 15 following the February 1998 hearings and
each March 15 following the February 1999, 2000 and 2001 (if the Association
exercises its option to extend this Agreement under Article XXVII) hearings.
The arbitrator or arbitration panel chair shall insert the figure awarded in
paragraph 2 of the duplicate Uniform Player's Contracts delivered at the
hearing and shall forward both copies to the League office of the Player and
Club concerned.
(6) Form of Submission. The Player and the Club shall exchange with each
other in advance of the hearing single salary figures for the coming season
(which need not be figures offered during the prior negotiations) and then
shall submit such figures to the arbitrator or arbitration panel. At the
hearing, the Player and Club shall deliver to the arbitrator or arbitration
panel a Uniform Player's Contract executed in duplicate, complete except for
the salary figure to be inserted in paragraph 2. Upon submission of the
salary issue to arbitration by either Player or Club, the Player shall be
regarded as a signed Player (unless the Player withdraws from arbitration as
provided in paragraph (4) above).
(7) Selection of Arbitrators. The Association and the PRC shall annually
select the arbitrators. In the event they are unable to agree by January 1 in
any year, they jointly shall request that the American Arbitration
Association furnish them lists of prominent, professional arbitrators. Upon
receipt of such lists, the arbitrators shall be selected by alternately
striking names from the lists. In 1997, all cases shall be assigned to single
arbitrators, unless the Player and the Club jointly request assignment to a
three-arbitrator panel. In 1998, 50% of the cases shall be assigned to
three-arbitrator panels and 50% of the cases shall be assigned to single
arbitrators. In 1999, 75% of the cases shall be assigned to
-15-
26
three-arbitrator panels and 25% of the cases shall be assigned to single
arbitrators. In 2000 and 2001 (if the Association exercises its option to
extend this Agreement under Article XXVII), all cases shall be assigned to
three-arbitrator panels. In 1998 and 1999, the Association and the PRC shall
use an agreed-upon method of random selection to determine which cases are to
be assigned to three-arbitrator panels and which cases are to be assigned to
single arbitrators. Further, in each case involving a three-arbitrator panel,
the Association and the PRC shall designate one arbitrator to serve as the
panel chair.
(8) Location of Hearings. The single hearing site for each year will be
agreed upon by the parties with preference being given to either Los Angeles,
Tampa/Orlando, or Phoenix.
(9) Conduct of Hearings. The hearings shall be conducted on a private and
confidential basis. Each of the parties to a case shall be limited to one
hour for initial presentation and one-half hour for rebuttal and summation.
The aforesaid time limitations may be extended by the arbitrator or
arbitration panel in the event of lengthy cross-examination of witnesses, or
for other good cause.
(10) Continuances, Adjournments or Postponements. There shall be no
continuances or adjournments of a hearing, but the commencement of a hearing
may be postponed by the arbitrator or arbitration panel upon the application
of either the Player or Club based upon a showing of substantial cause. Any
request for the postponement of a scheduled hearing shall be made to the
arbitrator or arbitration panel chair in writing, with copies to the
Association and the PRC. Disclosure of individual votes by panel members
shall be in accordance with paragraph (5) above.
(11) Hearing Costs. The Player and Club shall divide equally the costs of
the hearing, and each shall be responsible for his own expenses and those of
his counsel or other representatives.
(12) Criteria.
(a) The criteria will be the quality of the Player's contribution to
his Club during the past season (including but not limited to his overall
performance, special qualities of leadership and public appeal), the length
and consistency of his career contribution, the record of the Player's past
compensation, comparative baseball salaries (see paragraph (13) below for
confidential salary data), the existence of any physical or mental defects
on the part of the Player, and the recent performance record of the Club
including but not limited to its League standing and attendance
-16-
27
as an indication of public acceptance (subject to the exclusion stated in
subparagraph (b)(i) below). Any evidence may be submitted which is relevant
to the above criteria, and the arbitrator or arbitration panel shall assign
such weight to the evidence as shall appear appropriate under the
circumstances. The arbitrator or arbitration panel shall, except for a
Player with five or more years of Major League service, give particular
attention, for comparative salary purposes, to the contracts of Players
with Major League service not exceeding one annual service group above the
Player's annual service group. This shall not limit the ability of a Player
or his representative, because of special accomplishment, to argue the
equal relevance of salaries of Players without regard to service, and the
arbitrator or arbitration panel shall give whatever weight to such argument
as is deemed appropriate.
(b) Evidence of the following shall not be admissible:
(i) The financial position of the Player and the Club;
(ii) Press comments, testimonials or similar material bearing on
the performance of either the Player or the Club, except that
recognized annual Player awards for playing excellence shall not be
excluded;
(iii) Offers made by either Player or Club prior to arbitration;
(iv) The cost to the parties of their representatives, attorneys,
etc.;
(v) Salaries in other sports or occupations.
(13) Confidential Major League Salary Data. For his or its confidential
use, as background information, the arbitrator or arbitration panel will be
given a tabulation showing the minimum salary in the Major Leagues and
salaries for the preceding season of all players on Major League rosters as
of August 31, broken down by years of Major League service. The names and
Clubs of the Players concerned will appear on the tabulation. In utilizing
the salary tabulation, the arbitrator or arbitration panel shall consider the
salaries of all comparable Players and not merely the salary of a single
Player or group of Players.
(14) Prohibition Regarding Luxury Tax. No participant in a salary
arbitration shall refer in any fashion, either orally or in writing, to any
of the provisions in Article XXIII (Luxury Tax). No salary arbitrator or
arbitration panel shall consider in any fashion any of the provisions in
Article XXIII (Luxury Tax).
-17-
28
ARTICLE VII-EXPENSES AND EXPENSE ALLOWANCES
A. TRANSPORTATION AND TRAVEL EXPENSES
Each Club shall pay the following expenses of Players:
(1) All proper and necessary traveling expenses of Players while "abroad,"
or traveling with the Club in other cities, including board, and first-class
jet air and hotel accommodations, if practicable.
Each Club shall give written notice to the team's Player Representative and
the Association, prior to February 1 of each year, of the in-season hotels
the Club intends to utilize during the next succeeding season.
On regularly scheduled commercial flights, when first-class accommodations
cannot practicably be provided and Players travel in the coach section, the
Club shall provide three seats for each two Players and first-class meals.
(2) First-class jet air fare and meals en route, of Players to their homes
at the end of the season, regardless of where the Club finished its season.
If the Club finishes its season "abroad" and appropriate transportation is
not provided back to the Club's home city, any Player who elects to return
home via the Club's home city shall be paid an amount equal to the
first-class jet air fare and meals en route back to the Club's home city plus
the first-class jet air fare and meals en route from the Club's home city to
the Player's home. A Player who has more than one home shall receive payment
based on the home to which he actually travels.
(3) All necessary traveling expenses, including first-class jet air fare
and meals en route, of Players from their homes to the spring training place
of the Club, whether they are ordered to go there directly or by way of the
home city of the Club. A Player who has more than one home shall receive
payment based on the home from which he actually travels.
(4) In the case of assignment of a Player's contract during the
championship season or during spring training, all traveling expenses,
including first-class jet air fare and meals en route, of the Player as may
be necessary to enable him to report to the assignee Club. The Club shall
also reimburse the Player for all travel expenses, including first-class jet
air fare and meals en route, for the Player's wife for one assignment during
the championship season. Such expenses may not be claimed by the Player as
part of his moving expenses under Article VIII(C), unless not paid under this
-18-
29
provision. A Club may offset such expenses against any moving allowance
provided pursuant to Article VIII(A).
(5) In the case of termination by the Club of a Player's contract during
the championship season or during spring training, reasonable traveling
expenses, including first-class jet air fare and meals en route, to the
Player's home city.
(6) In the event a Player is required to attend a regularly scheduled
military encampment of the Reserve of the Armed Forces or of the National
Guard during the championship season or during spring training, the Player's
air fare to and from the encampment.
B. IN-SEASON MEAL AND TIP ALLOWANCE
(1) During the championship season, each Player shall receive a daily meal
and tip allowance for each date a Club is on the road and for each traveling
day. No deductions will be made for meals served on an airplane.
(2) If, when a Club departs from the home city, departure is scheduled
prior to 12:00 Noon, Players will receive the full daily allowance for that
date; if departure is after 12:00 Noon, Players will receive one-half of the
daily allowance for that date. Returning to the home city, if arrival is
later than 6:00 P.M., Players will receive the full daily allowance; if
arrival is prior to 6:00 P.M., Players will receive one-half of the daily
allowance. The Club may require the Player to sign checks for meals at a
hotel in lieu of the cash meal allowance.
(3) During the 1996 championship season, the daily allowance was $60.50.
During the 1997 championship season, the daily allowance shall be $67.00.
During the 1998, 1999 and 2000 championship seasons, and the 2001
championship season, if the Association exercises its option to extend this
Agreement under Article XXVII, the daily allowance shall be a base of $67.00
plus a cost of living adjustment to the nearest $.50, provided, however, that
the cost of living adjustment shall not reduce the daily allowance below
$67.00.
(4) Cost of living adjustments shall be computed as follows.
(a) To determine the allowance figure effective for the 1998 season,
the 1997 base allowance figure provided by this Agreement shall be
multiplied by a fraction, the numerator of which is the Consumer Price
Index for Urban Wage Earners and Clerical Workers (CPIW) published by the
Bureau of Labor
-19-
30
Statistics for November, 1997 and the denominator of which is the CPIW for
the month of November, 1996.
(b) To determine the allowance figure effective for the 1999 season,
the allowance figure for the 1998 season, as adjusted, shall be multiplied
by a fraction, the numerator of which is the CPIW for November, 1998 and
the denominator of which is the CPIW for the month of November, 1997.
(c) To determine the allowance figure effective for the 2000 season,
the allowance figure for the 1999 season, as adjusted, shall be multiplied
by a fraction, the numerator of which is the CPIW for November, 1999 and
the denominator of which is the CPIW for the month of November, 1998.
(d) In the event that the Association exercises its option to extend
this Agreement under Article XXVII, the allowance figure effective for the
2001 season shall be the allowance figure for the 2000 season, as adjusted,
multiplied by a fraction, the numerator of which is the CPIW for November,
2000 and the denominator of which is the CPIW for the month of November,
1999.
(5) A disabled Player who is not traveling with his Club on the road shall
receive:
(a) the full allowance if he is residing at a hotel or motel in either
the metropolitan area of the Club, or one to which the Player has gone at
the request of the Club;
(b) no allowance if he is residing at his in-season residence or
permanent residence in the metropolitan area of the Club, which residence
is not a hotel or motel; and
(c) no allowance if he is in a hospital or is residing at his permanent
residence located outside the metropolitan area of the Club.
(See Attachment 4.)
(6) To the maximum extent possible, each Club shall provide the daily
allowance pursuant to an accountable plan whereby to the maximum extent
possible the daily allowance will be excluded from a Player's gross income.
C. SPRING TRAINING ALLOWANCES
(1) During the 1996 spring training season, each Player received a weekly
allowance of $188.50, payable in advance, to cover training camp expenses. In
addition, each Player living away from
-20-
31
the Club's spring training headquarters received a supplemental weekly
allowance of $34.00. During the 1997 spring training season, the weekly
allowance shall be $211.00 and the supplemental weekly allowance shall be
$38.00. In 1998, 1999 and 2000 and, if the Association exercises its option
to extend this Agreement -under Article XXVII, 2001, there shall be added to
both allowances a cost of living adjustment to the nearest $.50, provided,
however, that the cost of living adjustment shall not reduce the weekly
allowances below $211.00 and $38.00, respectively.
(2) A Player living away from the Club's spring training headquarters shall
receive the following daily meal and tip allowance (except that Players who
make an overnight trip shall receive for the day following the night on the
road the daily championship season meal and tip allowance in lieu of the
daily allowance provided in this paragraph). No deduction shall be made for
lunch or sandwiches served at the ballpark. In 1996, the daily allowance was
$53.50. In 1997, the daily allowance shall be $60.00. In 1998, 1999 and 2000
and, if the Association exercises its option to extend this Agreement under
Article XXVII, 2001, there shall be added to the daily allowance a cost of
living adjustment to the nearest $.50, provided, however, that the cost of
living adjustment shall not reduce the daily allowance below $60.00.
Players living at the Club's spring training headquarters also shall
receive the daily meal and tip allowance if the Club does not otherwise
provide meals. Except where the Club owns facilities (such as Los Angeles),
no Player shall be required to sign meal checks or take his meals in lieu of
receiving the daily meal and tip allowance.
A Player whose Major League Uniform Player's Contract has been optionally
assigned but who is in uniform for a Major League spring training game shall
receive the daily allowance for each such game.
(3) A Player living away from the Club's spring training headquarters shall
receive a room allowance of $25.00 per day. Where the Club owns facilities
which are considered the equivalent of first-class hotel accommodations (such
as Los Angeles), the Club shall pay a daily room allowance of $15.00.
(4) Cost of living adjustments shall be computed as set forth in Section
B(4) above.
(5) To the maximum extent possible, each Club shall provide spring training
allowances pursuant to an accountable plan whereby to the maximum extent
possible such allowances will be excluded from a Player's gross income.
-21-
32
D. SINGLE ROOMS ON THE ROAD
Each Player on a Club's Active List (including disabled Players who travel with
the Club) shall have single rooms in the Club's hotels on all road trips during
the Club's championship season and post-season. Nothing herein shall prohibit
the Clubs from making or continuing agreements with individual Players which
provide more favorable arrangements for such Players.
E. ALL-STAR GAME
A Player who is a member of his League's All-Star team shall, in addition to
being reimbursed in accordance with past practice, be reimbursed by the League
for the first-class jet air fare to and from the site of the All-Star Game for
one guest from the guest's place of residence, and for hotel accommodations for
a maximum of three days for such guest.
F. IN-SEASON SUPPLEMENTAL ALLOWANCES
(1) A Player shall be entitled to receive the "in-season supplemental
allowance" provided by this Section F if:
(a) his contract is assigned by a National Association club to a Major
League Club,
(b) he had no Major League service (or his entire Major League service
is only after the preceding August 31) and is on a Major League Club's
opening day roster, or
(c) his contract is assigned by a Major League Club to another Major
League Club during the championship season or after the sixteenth day prior
to the start of the championship season.
(2) A Player entitled to receive the in-season supplemental allowance
shall be treated by the assignee Club as if he were on the road for each of
the first seven days of the assignment in the assignee Club's home city, to
include the assignee Club providing the Player with first-class hotel
accommodations and the full daily meal and tip allowance described in
paragraphs (3) and (4) of Section B for this period. If this entitlement
arises under paragraph (1)(a) or (b) above, first-class hotel accommodations
shall be provided at the Club's expense or an allowance for housing expenses,
not to exceed the first-class hotel accommodations rate, shall be provided to
the Player in advance on a daily basis, as long as the Player incurs actual
housing expenses.
-22-
33
(3) This in-season supplemental allowance shall be provided
automatically to such a Player in advance (a) at the time of the
assignment for assignments between Major League Clubs, and (b) on a daily
basis if the entitlement arises under paragraph 1(a) or (b) above.
(4) This Section F shall apply to each such assignment made during a
championship season. For a covered assignment from a National Association
club to a Major League Club made during the off-season, the Player shall be
entitled to the benefits provided by this Section F only for the days he
serves on a Major League Club's active roster before his contract is
reassigned to a National Association club.
ARTICLE VIII-MOVING ALLOWANCES
A. If a Player's contract is assigned by a Major League Club to another Major
League Club during the championship season, the assignee Club shall pay the
Player, for all moving and other expenses resulting from such assignment, the
sum of $850 if the distance between the home ballparks of the assignor and
assignee Clubs is 1,000 air miles or less; the sum of $1,150 if the distance
between the home ballparks of the assignor and assignee Clubs is greater than
1,000 but less than 2,000 air miles; and the sum of $1,450 if the distance
between the home ballparks of the assignor and assignee Clubs is equal to, or
greater than 2,000 air miles.
This allowance will be paid to the Player automatically at the time of the
assignment.
This advance payment will be credited against the reimbursement for reasonable
and actual moving expenses should the Player elect to claim such expenses in
accordance with the provisions of Section C below.
B. If a Player is assigned to another Major League Club located within 50 miles
of the assignor Club's home city, the Player shall not receive any moving
allowance under Section A above, subject to the following exception. If a Player
is assigned to another Major League Club and moves from a residence located
further than 25 miles from the assignee Club's home ballpark to a residence
located closer to, and within 50 miles of, such ballpark, the Player shall
receive the moving allowance in accordance with Section A above.
C. A Player may elect, within two years after the date of the assignment of his
contract, regardless of when his contract is assigned or whether the assignment
is between Major League Clubs or a Major League Club and a National Association
club, to be reimbursed for
-23-
34
(1) the reasonable and actual moving expenses of the Player and his immediate
family resulting therefrom, including first-class jet air transportation for the
Player and his immediate family, provided that, if the Player relocates more
than one year from the date of the assignment, the Player must relocate in the
assignee Club's home city and the Player must still be playing for the assignee
Club at the time he incurs such expenses and (2) all rental payments for living
quarters in the city from which he is transferred (and/or spring training
location, if applicable), for which he is legally obligated after the date of
assignment and for which he is not otherwise reimbursed. Such rental payments
shall not include any period beyond the end of a season or prior to the start of
spring training. The Club paying reimbursement for rent shall have use and/or
the right to rent such living quarters for the period covered by the rental
reimbursement.
In the event a Player is required to report to a Major League Club from a
National Association club in any year on or after September 1, the foregoing
paragraph shall not apply.
Reimbursement shall be made by the assignee Club, except, should a Player's
Contract be assigned from a Major League Club to a National Association club,
reimbursement shall be made by the assignor Major League Club.
ARTICLE IX-TERMINATION PAY
A. OFF-SEASON
A Player who is tendered a Major League contract which is subsequently
terminated by a Club during the period between the end of the championship
season and prior to the beginning of the next succeeding spring training under
paragraph 7(b)(2) of the Uniform Player's Contract for failure to exhibit
sufficient skill or competitive ability, shall be entitled to receive
termination pay from the Club in an amount equal to thirty (30) days' payment at
the rate stipulated in paragraph 2 of (1) his Contract for the next succeeding
championship season, or (2) if he has no Contract for the next succeeding
championship season, in an amount equal to thirty (30) days' payment at the rate
stipulated in paragraph 2 of the Contract tendered to him by his Club for the
next succeeding championship season.
B. SPRING TRAINING
A Player whose Contract is terminated by a Club under paragraph 7(b)(2) of the
Uniform Player's Contract for failure to exhibit sufficient skill or competitive
ability, shall be entitled to receive termina-
-24-
35
tion pay from the Club in an amount equal to thirty (30) days' payment at the
rate stipulated in paragraph 2 of his Contract, if the termination occurs during
spring training but on or before the 16th day prior to the start of the
championship season. If the termination occurs during spring training, but
subsequent to the 16th day prior to the start of the championship season, the
Player's termination pay shall be in an amount equal to forty-five (45) days'
payment at the rate stipulated in paragraph 2 of his Contract.
C. IN-SEASON
A Player whose Contract is terminated by a Club during the championship season
under paragraph 7(b)(2) of the Uniform Player's Contract for failure to exhibit
sufficient skill or competitive ability, shall be entitled to receive
termination pay from the Club in an amount equal to the unpaid balance of the
full salary stipulated in paragraph 2 of his Contract for that season.
D. SPLIT CONTRACTS
In the case of a Player who signs a Major League Contract which sets forth a
separate rate of pay for National Association service, the rate of pay to be
utilized in calculating termination pay under the preceding Sections A, B and C
shall be:
(1) The National Association rate, if the termination occurs in the
off-season;
(2) The National Association rate, if the termination occurs during spring
training, but on or before the 16th day prior to the start of the
championship season;
(3) The Major League rate, if the termination occurs during spring
training, but subsequent to the 16th day prior to the start of the
championship season;
(4) The National Association rate, if the termination occurs during the
season and the Player is, at the time of termination, in the National
Association; and the Major League rate, if the termination occurs during the
season and the Player is, at the time of termination, in the Major Leagues.
In the application of this paragraph (4), a Player's Contract may not be
assigned to the National Association for the purpose of reducing the Player's
termination pay.
Notwithstanding the above, a Player whose Contract is not assignable to the
National Association without his consent, or a Player selected by a Major League
Club in the immediately preceding Rule 5
-25-
36
draft, shall be entitled to receive termination pay at the Major League rate
unless terminated during the championship season at a time when his Contract is
under assignment to the National Association.
E. INJURY
If a Player's Contract is terminated by a Club by reason of the Player's failure
to render his services due to a disability resulting directly from injury
sustained in the course and within the scope of his employment under the
Contract, and notice is received by the Club in accordance with Regulation 2 of
the Uniform Player's Contract, the Player shall be entitled to receive from the
Club the unpaid balance of the full salary for the year in which the injury was
sustained, less all workmen's compensation payments received by the Player as
compensation for loss of income for the specific period for which the Club is
compensating him in full.
F. NON-DUPLICATION
The foregoing provisions of this Article IX shall be applied regardless of the
number of times a Player may be released during a year, subject to the following
limitations:
(1) The maximum amount of termination pay which a Player shall be entitled
to receive for any year shall not exceed the amount by which:
(a) the salary stipulated in the Player's original Contract for such
year exceeds
(b) the aggregate amount which the Player earns during that year from
any Club or Clubs, including any amounts deferred to later years,
calculated at present value, and bonuses.
(2) In the event a released Player refuses to accept a reasonable Major
League Contract offered by a Club other than the Club which released him,
such Player shall forfeit that portion of the termination pay which would not
have been payable if such Contract had been accepted.
ARTICLE X-WORLD SERIES, LEAGUE CHAMPIONSHIP SERIES AND DIVISION SERIES PLAYERS'
POOL
A. CREATION OF POOL
One Players' pool shall be created from the World Series, the two League
Championship Series and the four Division Series. Contributions shall be made
into the pool as follows:
-26-
37
(1) 60% of the total gate receipts from the first 4 World Series games;
(2) 60% of the total gate receipts from the first 4 games of each League
Championship Series; and
(3) 60% of the total gate receipts from the first 3 games (4 if the
Division Series is expanded to the best of 7 games) of each Division Series.
B. DISTRIBUTION OF POOL
The Players' pool shall be distributed to the Players, by Club, as follows:
World Series Winner............................................ 36%
World Series Loser............................................. 24%
League Championship Series Losers (2) ......................... 24%
Division Series Losers (4)..................................... 12%
Non-Wild Card Second Place Teams (4) .......................... 4%
Distribution of the Players' pool shall be made to the Players within 30 days
after the completion of the World Series, unless for good cause the Parties
agree to extend the period.
C. DIVISION OF PLAYERS' POOL
The division of the Players' pool shall be made by a vote of the Players, in a
meeting chaired by the Player Representative, at which attendance shall be
limited to Players, except that the field manager, prior to being excused from
such meeting, shall be given first the opportunity to express his views as to
the division of the pool. At the invitation of the Player Representative, the
field manager may be present during the remainder of the meeting, or any part
thereof. The vote of the Players shall not be subject to alteration, except as
may be required to conform to the Major League Rules.
Non-uniformed personnel of a Club shall not be eligible to receive a percentage
share of the Players' pool, but shall be eligible to receive cash awards of
defined dollar value, provided that no cash award may exceed the value of a full
share.
D. GUARANTEE OF POOL
(1) To the extent, if any, that the Players' pool provides a total of less
than $2,416,450 for the World Series winner, the amount
-27-
38
to be distributed to such winner shall be increased to $2,416,450. To the
extent, if any, that the Players' pool provides a total of less than
$1,611,000 for the World Series loser, the amount to be distributed to such
loser shall be increased to $1,611,000.
(2) To the extent, if any, that the Players' pool provides a total of less
than $1,611,000 for both League Championship Series losers ($850,500 each),
the amount to be distributed to such losers shall be increased to $1,611,000
($850,500 each).
(3) To the extent, if any, that the Players' pool provides a total of less
than $644,400 for the Division Series losers, the total amount to be
distributed to such Division Series losers shall be increased to $644,400.
(4) To the extent, if any, that the Players' pool provides a total of less
than $161,100 for the non-Wild Card second place teams in each division, the
total amount to be distributed to such non-Wild Card second place teams shall
be increased to $161,100.
(5) If, during the term of this Agreement, the Clubs raise World Series
ticket prices, the guarantees set forth in the above paragraphs (1), (2), (3)
and (4) shall be increased a pro rata amount, such amount established by
averaging the percentage increase of a box seat ticket and the percentage
increase of a reserved seat ticket and increasing each guarantee by such
percentage.
ARTICLE XI-GRIEVANCE PROCEDURE
For the purpose of providing an orderly and expeditious procedure for the
handling and resolving of certain grievances and complaints, as hereinafter
provided, the following shall apply as the exclusive remedy of the Parties.
A. DEFINITIONS
As used herein, the following terms shall have the meanings indicated:
(1) (a) "Grievance" shall mean a complaint which involves the existence or
interpretation of, or compliance with, any agreement, or any provision of any
agreement, between the Association and the Clubs or any of them, or between a
Player and a Club, except that disputes relating to the following agreements
between the Association and the Clubs shall not be subject to the Grievance
Procedure set forth herein:
-28-
39
(i) The Major League Baseball Players Benefit Plan;
(ii) The Agreement Re Major League Baseball Players Benefit Plan;
(iii) The Agreement regarding dues check-off.
Any procedures or remedies available to the Parties for the resolution of
disputes arising under said agreements which were available as of their
respective execution dates, shall continue to be available and not be altered or
abridged in any way as a result of this Basic Agreement between the Association
and the Clubs.
(b) Notwithstanding the definition of "Grievance" set forth in subparagraph
(a) above, "Grievance" shall not mean a complaint which involves action taken
with respect to a Player or Players by the Commissioner involving the
preservation of the integrity of, or the maintenance of public confidence in,
the game of baseball. Within 30 days of the date of the action taken, such
complaint shall be presented to the Commissioner who promptly shall conduct a
hearing in accordance with the Rules of Procedure attached hereto as Appendix
A. The Commissioner shall render a written decision as soon as practicable
following the conclusion of such hearing. The Commissioner's decision shall
constitute full, final and complete disposition of such complaint, and shall
have the same effect as a Grievance decision of the Arbitration Panel. In the
event a matter filed as a Grievance in accordance with the procedure
hereinafter provided in Section B gives rise to issues involving the
integrity of, or public confidence in, the game of baseball, the Commissioner
may, at any stage of its processing, order that the matter be withdrawn from
such procedure and thereafter be processed in accordance with the procedure
provided above in this subparagraph (b). The order of the Commissioner
withdrawing such matter shall constitute a final determination of the
procedure to be followed for the exclusive and complete disposition of such
matter, and such order shall have the same effect as a Grievance decision of
the Arbitration Panel. (See also Attachment 5.)
The Association may reopen this Agreement, with reference solely to Section
A(1)(b) and Section C of this Article, upon the giving of 10 days' written
notice at any time, based upon experience under the aforesaid Sections which,
in its opinion, is unsatisfactory.
Any reopening notice served by the Association, in accordance with the
foregoing, will be based only on actual experience with
-29-
40
the operation of such Sections in the processing of grievances or complaints
and such reopening cannot occur unless there is actual experience under such
Sections.
Also, in the event either of the incumbent League Presidents leaves that
Office, the Association may reopen this Agreement, with reference solely to
Section C of this Article as it affects the role of the League Presidents,
upon the giving of 10 days' written notice.
(c) Notwithstanding the definition of "Grievance" set forth in subparagraph
(a) above, "Grievance" shall not mean a complaint or dispute which involves
the interpretation or application of, or compliance with the provisions of
the first sentence of paragraph 3(c) of the Uniform Player's Contract.
However, nothing herein shall alter or abridge the rights of the Parties, or
any of them, to resort to a court of law for the resolution of such complaint
or dispute.
Anything in the Grievance Procedure provided for in the Basic Agreement to
the contrary notwithstanding, complaints or disputes as to any rights of the
Players or the Clubs with respect to the sale or proceeds of sale of radio or
television broadcasting rights in any baseball games by any kind or method of
transmission, dissemination or reception shall not be subject to said
Grievance Procedure. However, nothing herein or in the Grievance Procedure
shall alter or abridge the rights of the Parties, or any of them, to resort
to a court of law for the resolution of such complaint or dispute.
The reference herein to the above types of complaints or disputes shall not
be deemed to define exclusively the types of complaints or disputes which are
not subject to said Grievance Procedure.
(2) "League" shall mean The American League of Professional Baseball Clubs or
The National League of Professional Baseball Clubs.
(3) "Commissioner" shall mean the person holding the office of Commissioner
of Baseball as defined in the Major League Agreement.
(4) "Player" or "Players" shall mean a Player or Players on the active roster
of a Major League Club or on a disabled, restricted, disqualified, ineligible,
suspended or military list of a Major League Club. The term "Player" shall also
include a former
-30-
41
Player or Players who have a grievance or complaint arising by reason of their
former status as a Player as defined in the preceding sentence.
(5) "Club" or "Clubs" shall mean a Club or Clubs with membership in a League.
(6) "Association" shall mean the Major League Baseball Players Association.
(7) "Player Relations Committee" or "PRC" shall mean the Major League
Baseball Player Relations Committee established by the Clubs or any department
of the Commissioner's Office which assumes on behalf of the Commissioner the
responsibilities formerly held by the Major League Baseball Player Relations
Committee.
(8) "Grievant" shall mean a party who initiates or appeals a Grievance.
(9) "Arbitration Panel" shall mean the impartial arbitrator or, where either
Party so elects, a tripartite panel so empowered and composed of the impartial
arbitrator and two party arbitrators, one appointed by the Association, the
other appointed by the PRC. The impartial arbitrator, who shall in all instances
be designated as the Panel Chairman, shall be appointed by agreement of the
Association and the PRC. In the event the Association and the PRC are unable to
agree upon the appointment of the impartial arbitrator, they jointly shall
request that the American Arbitration Association furnish them a list of
prominent, professional arbitrators. Upon receipt of said list, they shall
alternate in striking names from the list until only one remains. The arbitrator
whose name remains shall be deemed appointed as the impartial arbitrator.
At any time during the term of this Agreement either the Association or the PRC
may terminate the appointment of the impartial arbitrator by serving written
notice upon him and the other Party; provided that no such termination shall in
any way impair the authority of the impartial arbitrator to render awards with
respect to matters fully submitted to him. Within 30 days of any such
termination, the Association and PRC shall either agree upon a successor
impartial arbitrator or select a successor from an American Arbitration
Association list, as set forth above.
Decisions of the Arbitration Panel shall be made by the impartial arbitrator or,
where the panel is tripartite, by majority vote.
-31-
42
B. PROCEDURE
STEP 1. Any Player who believes that he has a justifiable Grievance shall first
discuss the matter with a representative of his Club designated to handle such
matters, in an attempt to settle it. If the matter is not resolved as a result
of such discussions, a written notice of the Grievance shall be presented to the
Club's designated representative, provided, however, that for a Grievance to be
considered beyond Step 1, such written notice shall be presented within (a) 45
days from the date of the occurrence upon which the Grievance is based, or (b)
45 days from the date on which the facts of the matter became known or
reasonably should have become known to the Player, whichever is later. Within 10
days following receipt of such written notice (within 2 days if disciplinary
suspension or a grievance involving Player safety and health), the Club's
designated representative shall advise the Player in writing of his decision and
shall furnish a copy to the Association. If the decision of the Club is not
appealed further within 15 days of its receipt, the Grievance shall be
considered settled on the basis of that decision and shall not be eligible for
further appeal.
STEP 2. A Grievance, to be considered in Step 2, shall be appealed in writing by
the Grievant or by the Association to a designated representative of the PRC
within 15 days following receipt of the Club's written decision. The Grievance
shall be discussed within 10 days thereafter (within 2 days if disciplinary
suspension or a grievance involving Player safety and health) between
representatives of the PRC and representatives of the Association in an attempt
to settle it. Within 10 days following such discussion (within 2 days if
disciplinary suspension or a grievance involving Player safety and health), the
designated representative of the PRC shall advise the Grievant in writing of
his decision and shall furnish a copy to the Association. If the decision of the
PRC representative is not appealed further within 15 days of its receipt, the
Grievance shall be considered settled on the basis of that decision and shall
not be eligible for further appeal. Grievances which involve (a) more than one
Club, or (b) a Player who is not under contract to a Club which is party to the
Grievance, may be filed initially in Step 2, provided that written notice of the
Grievance shall be presented to the designated representative of the PRC within
(a) 30 days from the date of the occurrence upon which the Grievance is based,
or (b) 30 days from the date on which the facts of the matter became known or
reasonably should have become known to the Player, whichever is later
ARBITRATION. Within 15 days following receipt of the Step 2 decision, the
Grievant or the Association may appeal the Grievance in
-32-
43
writing to the Panel Chairman for impartial arbitration. Upon receipt of the
notice of appeal, the Chairman of the Arbitration Panel shall set a time, date
and place for hearing the appeal, which hearing shall be commenced as soon as
practicable but no later than 20 days following receipt of the notice of appeal
(5 days if disciplinary suspension or a grievance involving Player safety and
health). Such hearing shall be conducted in accordance with the Rules of
Procedure attached hereto as Appendix A. The Arbitration Panel shall render a
written decision as soon as practicable following the conclusion of such hearing
(within 5 days if disciplinary suspension or a grievance involving Player safety
and health), and may affirm, modify or reverse the decision from which the
appeal is taken. The decision of the Arbitration Panel shall constitute full,
final and complete disposition of the Grievance appealed to it.
With regard to the arbitration of Grievances, the Arbitration Panel shall have
jurisdiction and authority only to determine the existence of or compliance
with, or to interpret or apply agreements or provisions of agreements between
the Association and the Clubs or any of them, or between individual Players and
Clubs. The Arbitration Panel shall not have jurisdiction or authority to add to,
detract from, or alter in any way the provisions of such agreements.
All costs of arbitration, including the fees and expenses of the impartial
arbitrator, shall be borne equally by the parties, provided that each of the
parties shall bear the cost of its own party arbitrator, witnesses, counsel and
the like.
C. SPECIAL PROCEDURE WITH REGARD TO CERTAIN DISCIPLINARY ACTION
Complaints involving a fine or suspension imposed upon a Player by a League or
by the Commissioner for conduct on the playing field or in the ballpark shall be
subject exclusively to this Section C, as follows:
(1) Any Player who believes that he has a justifiable complaint regarding
such discipline may, within 7 days of his receipt of written notification of
the discipline, appeal in writing to the League President if the discipline
was imposed by him, or to the Commissioner, if the discipline was imposed by
him, for a hearing. Upon receipt of the notice of appeal, the League
President or Commissioner, as the case may be, shall designate a time and
place for hearing the appeal, which hearing shall be commenced within 10 days
from the date of receipt of the appeal. Such hearing shall be conducted in
accordance with the Rules of Procedure attached hereto as Appendix A. The
League President or Com-
-33-
44
missioner, as the case may be, shall render a written decision as soon as
practicable following the conclusion of such hearing, and may affirm, modify,
or revoke the disciplinary action originally imposed. The decision of the
League President or Commissioner, as the case may be, shall constitute full,
final and complete disposition of the complaint and shall have the same
effect as a Grievance decision of the Arbitration Panel.
(2) Notwithstanding the provisions of paragraph (1) above, if any such
discipline imposed upon a Player by a League involves a fine in an amount
which exceeds $500 or a suspension exceeding 10 days, any complaint relating
thereto shall be appealable from the decision of the League President to the
Commissioner for determination in the same manner and with the same effect as
provided in paragraph 1(b) of Section A hereof.
D. GRIEVANCES INITIATED OR APPEALED BY A CLUB
STEP 1. Any Club which believes it has a justifiable Grievance shall present a
written notice of the Grievance to the Player with a copy to the Association,
provided, however, that for a Grievance to be considered beyond Step 1, such
written notice shall be presented within (a) 45 days from the date of the
occurrence upon which the Grievance is based, or (b) 45 days from the date on
which the facts of the matter became known or reasonably should have become
known to the Club, whichever is later. Within 10 days following receipt of such
written notice, the Player shall advise the Club in writing of his decision and
shall furnish a copy to the PRC. If the decision of the Player is not appealed
further within 15 days of its receipt, the Grievance shall be considered settled
on the basis of that decision and shall not be eligible for further appeal.
STEP 2. A Grievance, to be considered in Step 2, shall be appealed in writing
by the Club or the PRC to the Association within 15 days following receipt of
the Player's written decision. The Grievance shall be discussed within 10 days
thereafter between representatives of the PRC and representatives of the
Association in an attempt to settle it. Within 10 days following such
discussion, the Association shall advise the PRC in writing of its decision. If
the decision of the Association is not appealed further within 15 days of its
receipt, the Grievance shall be considered settled on the basis of that decision
and shall not be eligible for further appeal.
Grievances which involve (a) more than one Club, (b) more than one Player, or
(c) a Player who is not under contract to a Club which is party to the
Grievance, may be filed initially in Step 2, provided that
-34-
45
written notice of the Grievance shall be presented to the Association within (a)
30 days from the date of the occurrence upon which the Grievance is based, or
(b) 30 days from the date on which the facts of the matter became known or
reasonably should have become known to the Club, whichever is later.
ARBITRATION. Within 15 days following receipt of the Step 2 decision of the
Association, the PRC may appeal the Grievance in writing to the Panel Chairman
for impartial arbitration. The procedures to be followed in arbitration and the
jurisdiction of the Arbitration Panel shall be as set forth in Section B above.
Nothing contained in this Section D shall be deemed to limit or impair the right
of any Club to impose discipline upon a Player or Players or to take any other
action not inconsistent with the Uniform Player's Contract or any agreement with
the Association to which the Club is a Party. Any complaint or dispute which may
be a subject for discipline shall not constitute a proper basis for a Club
Grievance under this Section D.
E. GRIEVANCES INITIATED OR APPEALED BY THE ASSOCIATION
(1) The Association may on its own motion appeal Grievances or complaints
on behalf of a Player or Players as provided in this Grievance Procedure,
except that the Association will not appeal a Grievance or complaint
involving player discipline without the approval of the Player or Players
concerned.
(2) The Association may on its own motion initiate Grievances or complaints
on behalf of a Player or Players on all matters not involving player
discipline. Nothing herein shall interfere with the right of a Player who
initiates a disciplinary Grievance or complaint to be represented by the
Association at any Step of the Grievance Procedure.
F. MISCELLANEOUS
(1) Each of the time limits set forth herein may be extended by mutual
agreement of the parties involved.
(2) If any Grievance is not processed in accordance with the prescribed
time limits in any Step, unless an extension of time has been mutually agreed
upon, either party, after notifying the other party of its intent in writing,
may appeal to the next Step.
(3) Any decision which is appealable under this Grievance Procedure but
which is not appealed within the time allowed or
-35-
46
within any time mutually agreed upon by the parties shall constitute a full,
final and complete disposition of the Grievance involved.
(4) In any discussion or hearing provided for in the Grievance Procedure, a
Player may be accompanied by a representative of the Association who may
participate in such discussion or hearing and represent the Player. In any
such discussion or hearing, any other party may be accompanied by a
representative who may participate in such discussion or hearing and
represent such party.
G. SURVIVAL FOLLOWING TERMINATION OF BASIC AGREEMENT
Unless eliminated or modified following an impasse in bargaining, Article XI
shall remain in full force and effect after termination of this Agreement;
provided, however, that disputes arising after the termination of this Agreement
related to the legality or validity of unilateral changes of terms and
conditions of employment following an impasse in bargaining and any other
self-help conduct of the Parties, including but not limited to, unilateral
changes in nonmandatory subjects of bargaining, shall not be subject to Article
XI.
ARTICLE XII-DISCIPLINE
A. JUST CAUSE
The Parties recognize that a Player may be subjected to disciplinary action for
just cause by his Club, League or the Commissioner. Therefore, in Grievances
regarding discipline, the issue to be resolved shall be whether there has been
just cause for the penalty imposed.
If discipline imposed upon a Player is determined to be improper by reason of a
final decision under this Grievance Procedure, the Player shall promptly be made
whole.
The term "make whole" means:
(1) if a fine is found to have been imposed improperly, the fine will be
promptly repaid;
(2) any salary loss as a result of an improper suspension will be promptly
paid; and
(3) in the application of items (1) and (2) above, interest will also be
paid at the rate per annum set forth in Article XV(J) below.
-36-
47
B. NOTICE
Written notice of discipline of a Player (a fine, or suspension, or both)
imposed by the Commissioner of Baseball, a League President or a Club (except
for actions arising from participation in the Winter Leagues) and the reason
therefore shall in every case be given to the Player and the Association.
With respect to discipline imposed upon a Player by a League or the
Commissioner, the League or the Commissioner shall immediately give to the
Association notice by mail of fines, and facsimile notice of suspension and of
an appeal for a hearing.
C. DISCOVERY
A Player who is disciplined shall have the right to discover, in timely fashion,
all documents and evidence adduced during any investigation of the charges
involved.
D. COMPLIANCE
(1) Nothing contained in this Grievance Procedure shall excuse a Player
from prompt compliance with any discipline imposed upon him.
(2) Payment of Fines
(a) CLUB FINES. A fine imposed by a Club pursuant to Regulation 5 of
the Uniform Player's Contract in excess of $250 may not be deducted from
the Player's salary until such fine is finally upheld in the Grievance
Procedure or the time in which to file a Grievance has expired.
(b) FINES IMPOSED BY LEAGUE OR COMMISSIONER. A fine imposed by either
League or the Commissioner in an amount of $500 or less shall continue to
be payable when imposed. Fines in an amount greater than $500 shall be
payable only when such fine becomes final. When a fine imposed by either
League or by the Commissioner becomes final, the Player's employing Club is
authorized, at the request of the League involved, or the Commissioner in
the case of a fine imposed by the Commissioner, to deduct the amount of the
fine from the Player's salary and transmit such sum to the League involved,
or to the Commissioner, as the case may be.
E. INVESTIGATIONS
Except where circumstances require expeditious handling, the Player and the
Association shall receive reasonable advance notice of any
-37-
48
investigatory interview with a Player. Where circumstances requiring expeditious
handling are present, the Player and the Association shall receive as much
advance notice as is possible, but in no event shall the Association receive
less notice than the Player. All parties recognize the right of the Player to be
represented at such interview by the Association and counsel of his choice.
F. MAJOR LEAGUE RULES 15 AND 16
The following time limit provisions set forth in Major League Rules 15 and 16
shall be inapplicable in disciplinary matters:
(1) the prohibition in Rule 16(a) against reinstatement of a Player on the
Restricted, Disqualified and Ineligible Lists in the period August 1 to
October 31, inclusive;
(2) the prohibition in Rules 15(c)(1) and 16(c) against application for
reinstatement from the Ineligible List until after the lapse of one year from
the date of placement on such list; and
(3) the requirement of Rule 16(a) that the Player's Club shall be entitled
to 30 days' written notice prior to his reinstatement from the Disqualified
or Ineligible Lists, if application for such reinstatement is filed after
February 1 of any year.
ARTICLE XIII-SAFETY AND HEALTH
A. SAFETY AND HEALTH ADVISORY COMMITTEE
(1) Safety and Health Advisory Committee
The Parties shall establish and maintain a bipartisan Safety and Health
Advisory Committee which shall be comprised of an equal number of members
representing the Association and representing the Clubs. The purpose of the
Committee shall be
(a) to deal with emergency safety and health problems as they
arise, and attempt to find solutions, and
(b) to engage in review of, planning for and maintenance of safe
and healthful working conditions for Players.
(2) Committee Meetings
A meeting of the Safety and Health Advisory Committee may be called by any
member thereof who believes that an emergency
-38-
49
safety and health problem exists and requires immediate attention, and a
meeting shall be held as soon as practicable thereafter. In addition, the
Committee shall hold at least one regular meeting annually for purposes of
review and planning.
(3) Power and Authority of Committee
The Safety and Health Advisory Committee shall make recommendations to the
Parties as to the solution of problems and the establishment of policies. The
Committee shall use its best efforts to persuade the Parties to adopt the
Committee's recommendations. The Committee, however, shall only have advisory
authority and it shall not have the power to impose its views or
recommendations upon the Parties.
(4) Other Rights and Remedies
Nothing herein shall diminish or interfere with any other rights and
remedies the Players or the Association may pursue under the Grievance
Procedure of this Agreement or under the procedures established pursuant to
the Occupational Safety and Health Act. It is not a necessary prerequisite to
utilization of the Grievance Procedure that the Safety and Health Advisory
Committee procedures be instituted or exhausted. (See Attachment 7.)
B. SAFETY COMPLAINTS-RESPONSIBILITY OF LEAGUE PRESIDENT
Notwithstanding the provisions of Section A, when a safety complaint is made by
the Association to the Office of the League President, the League President
shall promptly designate a representative to investigate and to attempt to
resolve the problem. The League President shall promptly notify the Association
of the results of the investigation and of all attempts to resolve the problem.
C. DISABLED LIST
Application by a Club to the League President to place a Player on the Disabled
List shall be accompanied by a Standard Form of Diagnosis. (See Attachment 8.)
This Standard Form of Diagnosis shall be completed by the Club physician and
shall include, as a separate item, an estimated time period for recovery. A copy
of the completed Standard Form will be given to the Player. The Club physician
will also complete and submit the Standard Form of Diagnosis for recertification
of a Player on the Disabled List at the date when he first becomes eligible for
reinstatement to active status and then every fifteen days following the date
upon which the Player first became
-39-
50
eligible for reinstatement (except for Players placed upon the Emergency
Disabled List).
D. SECOND MEDICAL OPINION
Within 20 days following the execution of this Agreement, the Clubs will provide
an updated, accepted listing of medical specialists, by specialty and by
geographic regions, to whom Players may upon their request go for diagnosis and
a second medical evaluation of an employment related illness or injury being
treated by the Club physician. At least two physicians will be designated for
each specialty in each region. Further, the Association and the Clubs shall
promptly agree on appropriate procedures by which this listing of medical
specialists will be updated annually. A Player may seek a "second evaluation"
from a medical specialist on the accepted listing who is located outside of the
geographic region within which the Player's Club is located, provided that the
Player is not absent from the Club for an unreasonable period of time.
If a Player uses the services of a medical specialist who is on the accepted
listing and is located within the geographic region within which the Player's
Club is located, then the Club shall pay the cost of the "second evaluation,"
including transportation and hotel costs.
If a Player uses the services of a medical specialist who is on the accepted
listing but is not located within the geographic region within which the
Player's Club is located, then the Club shall pay the cost of the "second
evaluation." Payment of the Player's transportation and hotel costs shall be the
responsibility of the Player.
Expenses for "second evaluations" by medical specialists who are not on the
accepted listing will be authorized and paid only by prior mutual agreement
between the Player and the Club.
E. TRAINERS
Each Club shall employ two trainers on a full-time basis. Both trainers will
travel with the Club on the road; provided, that one trainer may remain in the
Club's home city if necessary for the Club to fulfill its obligations, as
expressed in Attachment 4, to disabled players who do not travel with the Club.
Individuals newly appointed as trainers shall be certified by the National
Athletic Trainers Association (NATA) or the Canadian Athletic Therapists
Association (CATA), or shall be physical therapists licensed by an appropriate
state authority.
-40-
51
F. LOCKER ROOM EQUIPMENT
Each visiting locker room shall be equipped with the following equipment, all in
good working order, and of a size and capacity adequate for the treatment of
professional baseball players: whirlpool, hydroculator, ultrasound machine and
examining table.
G. MEDICAL RECORDS
If a Player on a visiting Club receives medical treatment from the home Club's
doctor, a copy of any written medical evaluation prepared by the home Club's
doctor shall, when authorized by the Player, be provided to the Player and his
Club doctor.
ARTICLE XIV-SPRING TRAINING CONDITIONS
A. REPORTING
No Player shall be required to report for spring training workouts more than
thirty-three (33) days prior to the start of the championship season, provided
that:
(1) injured Players, pitchers and catchers may be invited to attend spring
training workouts no earlier than forty-five (45) days prior to the start of
the championship season; and
(2) all other Players may be invited to attend spring training workouts no
earlier than forty (40) days prior to the start of the championship season.
B. LIVING AWAY FROM CLUB HEADQUARTERS
Any Major League Player may live away from the Club's spring training
headquarters, unless the Club can demonstrate good cause for not permitting him
to do so.
C. MEETINGS WITH PLAYERS
The Association shall have the right to hold one team meeting during the
Players' normal working hours, with the Players on each Club in the Club's
spring training clubhouse, provided the Association gives the Club involved as
much advance notice as possible, but in no event less than 10 days; such meeting
to be approximately 60 minutes but not more than 90 minutes in duration starting
with the normal reporting time of Players on each Club but not earlier than 9:30
A.M. No "B" games shall be scheduled to conflict with such meetings.
-41-
52
ARTICLE XV-MISCELLANEOUS
A. NO DISCRIMINATION
The Clubs will not interfere with, restrain or coerce Players because of
membership in or lawful activity on behalf of the Association, nor will they
discriminate because of Association activity in regard to hire, tenure or
employment or any term or condition of employment.
The provisions of this Agreement shall be applied to all Players covered by this
Agreement without regard to race, color, religion or national origin.
B. PARKING FACILITIES
Each Club shall provide or arrange for appropriate automobile parking spaces for
Players and, to the extent practicable, van and small truck parking spaces for
Players, at its home ballpark on game or practice days, without cost to the
Players.
C. WINTER LEAGUE PLAY
No Major League Player shall be required to play in the Winter Leagues, provided
that this provision shall not bar a Club from recommending the advisability of
such activity to any Player.
D. COLLEGE SCHOLARSHIP PLAN
A Major League Player for whom there is in effect on or after January 1, 1973 a
valid and unexpired scholarship under the College Scholarship Plan may commence
or resume his studies under the Plan at any time within two years after his last
day of Major League service. If his college studies have not commenced under the
Plan within two years after his last day of Major League service, his
scholarship shall terminate.
Otherwise, his scholarship shall continue unless he shall fail to attend college
for more than two consecutive years after his last day of Major League service,
without proper reason as set forth in Major League Rule 3(c) (4)(D).
Participation by a Player in Winter League or ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ play shall
constitute proper reason for tolling the time limitation in the preceding
sentence.
E. ACTIVE PLAYER LIMIT
(1) The active Player limit set forth in Major League Rule 2(c) for the
period beginning with opening day of the championship
-42-
53
season and ending at midnight, August 31, shall be 25, provided that the
minimum number of active Players maintained by each Club throughout the
championship season shall be 24. However, if a reduction below 24 occurs as a
result of unforeseen circumstances, the Club shall, within 48 hours (plus
time necessary for the Player to report), bring its active roster back to a
minimum of 24 Players. The utilization or non-utilization of rights under
this paragraph (1) is an individual matter to be determined solely by each
Club for its own benefit. Clubs shall not act in concert with other Clubs.
(2) The active Player limit set forth in Major League Rule 2(c) for the
period beginning with September 1 and ending with the close of the
championship season shall be 40 for the duration of this Agreement.
F. SPANISH TRANSLATIONS AND ESL COURSES
This Agreement and the notices listed in Attachment 9 shall be translated and
printed in Spanish and shall be made available to all Spanish-speaking Players.
The costs for the translation and printing shall be borne equally by the
Association and the Clubs. In the event of any dispute involving the
interpretation of, or compliance with, the provisions of this Agreement or these
notices, the English version shall govern. Further, during each championship
season covered by this Agreement, each Club will make available an
English-as-a-second-language course, at its expense, provided that at least one
Player on that Club requests such a course.
G. FUTURE EXPANSION
During the term of this Agreement, the Clubs have the right to expand the number
of Major League Clubs beyond 28 by adding up to four (4) new Expansion Clubs.
Two of these Expansion Clubs will commence play in 1998, one of which will be
located in Arizona and the other in Tampa Bay/St. Petersburg. In addition, the
Clubs shall have the right to expand by another two (2) Clubs as long as they
notify the Association of their intention to so expand by December 31, 1999, and
schedule the new expansion Clubs to commence play no later than the 2002
championship season. Notice of a decision to expand beyond the two Clubs
scheduled to commence play in 1998 shall promptly be given to the Association
and the Association may reopen this Agreement with reference solely to the
effect upon the Players of such expansion, upon the giving of 10 days' written
notice. (See Attachment 10.)
-43-
54
H. DEFAULT NOTICE
During the term of this Agreement, the right of a Player to terminate his
Uniform Player's Contract pursuant to the provisions of the first sentence of
paragraph 7(a) of such Contract shall be limited to defaults or failures to
perform which are material in nature; and any notice of alleged default filed by
a Player under paragraph 7(a) of the Uniform Player's Contract must be filed
with the Club (with a copy to the PRC) by the Association, in writing, plainly
labeled as a default notice. Should such a material breach on the part of a Club
be alleged, the Club, the Player involved, the PRC and the Association will
cooperate in scheduling the handling of any Grievance brought with respect to
such alleged breach so that such Grievance may be submitted to arbitration on an
expedited basis.
I. INTERNATIONAL PLAY
(1) Definition
International play is defined as any game or series of games played by a
Club or Clubs (or a group or groups of Players, such as All-Star squads)
(a) outside the United States and Canada; or
(b) within or without the United States or Canada against a foreign
club or clubs.
Championship season, All-Star, Division Series, League Championship Series
and World Series games played in the United States and/or Canada shall not be
considered international play.
(2) Possible Expansion
Notwithstanding the foregoing definition of international play, if a Major
League franchise is awarded to a city outside the United States and Canada,
then championship season, All-Star, Division Series, League Championship
Series and World Series games played in that city by such franchise shall not
be considered international play.
(3) Prior Agreement Required
The Clubs agree that there will be no international play conducted anywhere
in the world at any time without the prior consent of the Association, except
for exhibition games during spring training and the championship season
against any non-Major League club if such games are played in the United
States, Canada or Puerto Rico and are not part of a national or international
tour by a foreign club.
-44-
55
(4) All International Activities Subject to Joint Cooperation
The Association and the Clubs shall cooperate with each other regarding all
international activities, including but not limited to, international play,
international events for which Player participation is sought by or on behalf
of a Club or Clubs (such as clinics or skill competitions), international
competition among nations, such as the Olympic Games, and the exploitation of
international rights, such as media and sponsorship contracts. In this
regard, the Association and the Clubs shall keep each other informed of
contemplated or planned international activities. Further, the Association
and the Clubs agree to honor reasonable requests of each other to be present
when international activities are discussed with third parties. Moreover, the
Association and the Clubs agree that in discussions with third parties
regarding international play or international events for which Player
participation is sought by or on behalf of a Club or Clubs, third parties
will be advised that the Clubs cannot enter into agreements that bind the
Players or the Association, and that the Association cannot enter into
agreements that bind the Clubs.
(5) International Play Committee
In furtherance of joint efforts to develop the sport internationally, the
Association and the PRC, on behalf of the Clubs, will designate
representatives to constitute an International Play Committee within 30 days
from the date of execution of this Agreement. The Executive Director of the
Association and the Chief Labor Negotiator of the PRC shall serve as
Co-Chairs of the Committee.
The Committee shall be kept informed by the Parties regarding all
contemplated or planned international activities. The Committee shall meet at
least once every calendar quarter (and more frequently, if circumstances
warrant) to discuss efforts in furtherance of the international development
of the sport. At each such meeting, the Association and the Clubs shall
report to each other about their respective efforts regarding international
activities. Further, no later than September 1 of each calendar year, the
Committee shall discuss and decide upon a plan of international activities,
if any, that will be jointly executed by Players and Clubs during the
following year. In this regard, each of the Co-Chairs of the Committee shall
designate a Co-Operating Officer who shall be responsible for carrying out
the decisions of the Committee.
(6) International Play and Events
The terms and conditions of the participation of Players in any game or
games considered to be international play pursuant to
-45-
56
paragraphs (1) and (3) above, or in any other international event (such as a
clinic or skills competition) for which Player participation is sought by or
on behalf of a Club or Clubs, shall be negotiated by the Association and the
PRC in advance. For each such project, all direct expenses, including, but
not limited to, Player and/or Club compensation, travel costs, fees and/or
prizes, shall be funded, to the extent practicable, by revenues or rights
fees from third parties. The Association and the PRC shall negotiate and
agree upon the budget for direct expenses on a project-by-project basis. For
each such project, the Association and the PRC, on behalf of the Clubs, shall
each be entitled to direct the distribution of one-half of any of the
remaining revenues or rights fees from third parties after payment of direct
expenses. This paragraph (6) does not address any licensing issues.
J. INTEREST RATE
A uniform annual interest rate, equal to the total of the prime interest rate
in effect at The Chase Manhattan Bank on the immediately preceding November 1,
plus one percent, rounded to the nearest full percentage point, shall be applied
with respect to the following matters:
(1) the calculation of the "discounted present value" referred to in
Article VI(A)(4) above, unless the Club and Player mutually agree otherwise;
(2) the calculation of the "present value" referred to in Article
IX(F)(1)(b) above;
(3) the calculation of the interest referred to in Article XII(A)(3) above;
(4) the calculation of the "present value" referred to in Article XVI
below.
K. PLAYERS ASSOCIATION TICKETS
The Association shall have the right to purchase 12 tickets for the All-Star
Game, the Division Series, the League Championship Series and the World Series
which tickets shall not be used for commercial purposes. Such tickets will be
for seats located between first base and home plate or home plate and third base
on field level or the first level above field level, except the Clubs will not
require the holders of full regular season ticket plans to be relocated.
-46-
57
L. FAMILY AND MEDICAL LEAVE ACT
The Clubs will comply with the requirements of the Family and Medical Leave Act
(29 U.S.C. 2601 et seq.)
ARTICLE XVI-DEFERRED COMPENSATION
There shall be no limitations on either the amount of deferred compensation or
the percentage of total compensation attributable to deferred compensation for
which a Uniform Player's Contract may provide.
Deferred compensation obligations incurred in Contracts executed after December
31, 1985 must be fully funded, in an amount equal to the present value of the
total deferred compensation obligation, within four calendar years of the year
in which the deferred compensation is earned. The year in which the deferred
compensation is earned shall be considered a calendar year for such purposes.
Notwithstanding the above funding requirement, each Club shall be entitled to a
deductible amount of deferred compensation which need not be funded. Such
amount, for the term of this Agreement, shall be $2,000,000 of the present value
of the aggregate deferred compensation owed by the Club pursuant to Uniform
Player's Contracts executed after December 7, 1996. Unless the Uniform Player's
Contract provides otherwise, a Club may fund deferred compensation obligations
in such manner as it elects; provided that each Club shall certify to the PRC
and the Association, by January 31 of each year, the manner in which deferred
compensation obligations have been funded during the preceding calendar year.
Club records relating to deferred compensation funding arrangements shall be
made available upon request to the PRC and/or to the Association in the event a
question arises concerning a Club's funding of deferred compensation.
ARTICLE XVII-EXISTING AGREEMENTS
The Parties recognize that there are existing agreements between a Major League
Club or Clubs and the Players or the Association, and between either of the
Major Leagues separately and the Players or the Association. The Parties
reaffirm such agreements and incorporate them as part of this Agreement insofar
as they are not inconsistent with this Agreement. Such agreements shall be
considered agreements between the Association and the Clubs or any of them for
the purpose of the Grievance Procedure provided for in Article XI hereof.
-47-
58
The following three agreements between the Clubs and the Association shall not
be incorporated as part of this Agreement and shall not be affected by the
adoption of this Agreement:
(a) The Major League Baseball Players Benefit Plan;
(b) The Agreement Re Major League Baseball Players Benefit Plan; and
(c) The Agreement regarding dues check-off.
ARTICLE XVIII-RULE CHANGES
If during the term of this Agreement any Major League rule, or rule or
regulation of the American or National Leagues is proposed to be changed, the
Clubs agree that they shall give the Association notice thereof, and shall
negotiate the proposed change with the Association, provided that the obligation
to negotiate with the Association provided by this Article XVIII shall apply
only to (a) a change in a Player benefit under an existing rule or regulation
and (b) the adoption of a rule or regulation which would change a Player benefit
under an existing rule or regulation or impose an obligation upon the Players
which had not previously existed. Except as specifically provided in this
Article XVIII, the right of the Clubs to make any rule change whatsoever shall
not be impaired or limited in any way, provided that the Clubs shall not make
any change which is inconsistent with the provisions of any then existing
agreement between the Clubs and the Association.
Notwithstanding the foregoing paragraph, if during the term of this Agreement
any playing or scoring rule is proposed to be changed, the Clubs agree that they
shall give the Association notice thereof, and shall negotiate the proposed
change with the Association, provided that the obligation to negotiate with the
Association shall apply only to changes which significantly affect terms and
conditions of employment. Such proposals to change playing or scoring rules
shall normally be made only during the off-season. If the Clubs and the
Association fail to reach agreement on a proposed change which is subject to
negotiation, the proposed change shall not be put into effect until the
completion of the next complete succeeding season (including the Division
Series, League Championship Series and World Series) following the date the
change was proposed.
ARTICLE XIX-ASSIGNMENT OF PLAYER CONTRACTS
A. CONSENT TO ASSIGNMENT
(1) The contract of a Player with ten or more years of Major League
service, the last five of which have been with one Club,
-48-
59
shall not be assignable to another Major League Club without the Player's
written consent. No consent from a Player shall be considered effective until
twenty-four hours from the Club's request to the Player for such consent.
(2) (a) The contract of a Player with five or more years of Major League
service, not including service while on the Military List (or seven or more
years of Major League service, including service while on the Military
List), shall not be assigned otherwise than to another Major League Club,
without the Player's written consent.
(b) Not earlier than 4 days prior to the contemplated date of an
assignment requiring the Player's consent under sub-paragraph (a) above, or
8 days, if the Player has no options remaining or if the assignment is
during the period from the close of the championship season to the opening
of spring training, the Club shall give written notice to the Player, with
a copy to the Association, which shall advise the Player that he may (i)
consent to the assignment, (ii) refuse the assignment or (iii) elect to
become a free agent. Additionally, the notice shall advise that in the
event that the Player consents to the assignment, he may elect free agency
between the end of the then current Major League season and the next
following October 15, unless he is returned to a Major League roster prior
to making such election.
The Player shall also be informed in the notice that, within the 3 days
after the date of the notice, or 8 days, if during the period from the
close of the championship season to the opening of spring training, he must
advise the Club in writing as to his decision to consent to the assignment
or to elect to become a free agent. A failure on the part of the Player to
respond to the notice shall constitute a refusal of the assignment. No
response from the Player shall be considered effective until twenty-four
hours from his receipt of the Club's notice.
(c) A Player who elects to become a free agent under this paragraph (2)
shall immediately be eligible to negotiate and contract with any Club
without any restrictions or qualifications. Such Player shall not be
entitled to receive termination pay. Such a free agent shall receive
transportation and travel expenses in the same manner as he would if he had
been unconditionally released except that he shall be limited to receiving
travel expenses to his new club if he reports to it directly, provided such
expenses are less than to his home city.
-49-
60
(3) Any Player who has a right to refuse the assignment of his contract
under paragraph (2)(a) above may consent to an assignment of his contract in
advance of any specific contemplated assignment if such consent (a) is
granted not more than ten (10) days prior to the start of the championship
season for which the consent is given, (b) is in writing, (c) designates the
assignee club and (d) requires that the assignment take place within 45 days
from the start of the championship season or the date on which the consent is
granted, whichever is later. The Club shall provide a copy of the Player's
consent to the Association contemporaneously upon the Club's receipt of such
consent.
B. ASSIGNMENT TO NATIONAL ASSOCIATION CLUB
When a Player's contract is assigned from a Major League Club to a National
Association club, the rights and benefits of such Player that do, and do not,
follow him to the National Association shall be in accordance with past
practices. Additionally, such a Player shall retain the right, if any, to
become a free agent, or to require the assignment of his contract, which he
possessed under his then current Major League contract as provided in Article XX
hereof, which right shall not be diminished or interfered with as a result of
such assignment or the signing by the Player of a National Association contract,
provided that such right shall terminate if and when such Player signs a
National Association contract following the time when his free agency rights
arise under Article XX.
C. DISABLED LIST-ASSIGNMENT TO NATIONAL ASSOCIATION CLUB
(1) There shall be no assignment of a Player by a Major League Club to a
National Association club while such Player is on a Major League Disabled
List; provided, however, that with the Player's written consent, a copy of
which shall be forwarded to the Association, and with the approval of the
League President, a Player on the Disabled List may be assigned to a National
Association club for up to a maximum of twenty days (thirty days for
pitchers) for each injury, or reoccurrence of an injury, for the purpose of
rehabilitation. (See Attachment 11.) Separate consent shall be required for a
rehabilitation assignment for a new injury or a reoccurrence of an injury. No
consent shall be effective for longer than twenty days (thirty days for
pitchers).
Notwithstanding the foregoing, a Player who is injured may be assigned to a
National Association club, provided that (a) the Player has less than 3 years
of Major League service, and (b) the
-50-
61
contemplated assignment would not be the Player's second (or subsequent)
career outright assignment since March 19, 1990, and (c) the Player had no
Major League service the prior championship season, and (d) the Player was
not selected by the assignor Major League Club in the immediately preceding
Rule 5 Draft, and (e) the assignment is not made in the period commencing
with the 16th day prior to the start of a championship season and ending with
the close of that championship season.
(2) Any service with a National Association club while on rehabilitation
assignment shall be deemed to be Major League service as defined in Article
XXI. A Player so assigned shall continue to receive his Major League salary
and the other rights and benefits of such Player shall be in accordance with
past practices relating to assignments to National Association clubs,
provided, however, that all such players shall be treated as if they were
Major League Players on the road for purposes of hotel accommodations and the
daily meal and tip allowance. Such assignment shall not be counted as an
optional assignment under Major League Rule 11 or for any other purpose, and
waivers shall not be required.
D. FOREIGN ASSIGNMENTS
Except for the return of conditional assignments from outside the United States
and Canada, the contract of a Player shall not be assigned otherwise than within
the United States and Canada, without the Player's written consent.
E. OPTIONAL ASSIGNMENTS
If a Player is optioned for a total of less than 20 days in one season, as
determined by the dates of the optional assignments and recalls, respectively,
such optional assignments shall not count as an optional transfer in connection
with the limitation upon optional assignments provided for in Major League Rule
11(c). (See Article XXI(B).)
F. WAIVERS
Any assignment of a Player contract must conform to the rules regarding waivers
contained in Major League Rule 10.
In addition, each Friday, not later than 3 P.M. E.D.T., the Leagues shall notify
the Association, by facsimile transmission, of all waiver requests and their
disposition. Notification shall include:
-51-
62
(1) the date on which the waiver request was made;
(2) the date of expiration of the waiver period;
(3) if the waiver period has expired, whether or not claims were filed;
(4) if claims are not filed, the period for which waivers have been
granted; and
(5) if claims were filed, whether or not the Club requesting waivers has
withdrawn its request. In the event claims were filed and the Club requesting
waivers has withdrawn its request, the Leagues need not identify the claiming
Club or Clubs.
G. DESIGNATED PLAYER
A Player who is in the status of a "designated player" under Major League Rule
2(k) shall, during the period he is in such status, be
(1) paid at the rate of his Major League salary and
(2) credited with Major League service.
A Club that desires to unconditionally release a Player who is in the status of
a "designated player" under Major League Rule 2(k) shall request the necessary
waivers by 2:00 P.M. on the seventh day following such designation; provided,
however, that if the seventh day falls on a non-business day, the Club shall
request such waivers not later than 2:00 P.M. on the next business day.
H. UNCONDITIONAL RELEASE
Notwithstanding the provisions of Major League Rule 8 and paragraph 7(d) of the
Uniform Player's Contract, the following procedure may be used to give notice to
a Player in connection with his unconditional release.
At the same time the Club advises a Player in writing that the Club has
requested waivers for the purpose of unconditional release, and the date on
which the waiver request will expire, the Player shall advise the Club in
writing of the address and telephone number to which the Club should telephone
or telegraph notice of termination to the Player upon the expiration of the
waiver period. If the Player fails to supply a telephone number or address, the
Club may use the most recent address or telephone number the Player has supplied
the Club.
Upon the expiration of the waiver period, the Club shall either give notice to
the Player by telephone or by sending a telegraph notice of
-52-
63
termination to the Player. In addition, the Player may make a collect telephone
call to the Club to determine whether his contract has been claimed.
ARTICLE XX-RESERVE SYSTEM
A. RESERVATION RIGHTS OF CLUBS
Subject to the rights of Players as set forth in this Agreement, each Club may
have title to and reserve up to 40 Player contracts. A Club shall retain title
to a contract and reservation rights until one of the following occurs:
(1) The Player becomes a free agent, as set forth in this Agreement;
(2) The Player becomes a free agent as a result of
(a) termination of the contract by the Club pursuant to paragraph 7(b)
thereof,
(b) termination of the contract by the Player pursuant to paragraph
7(a) thereof,
(c) failure by the Club to tender to the Player a new contract within
the time period specified in paragraph 10(a) of the contract, or
(d) failure by the Club to exercise its right to renew the contract
within the time period specified in paragraph 10(a) thereof; or
(3) The contract is assigned outright by the Club.
With the exception of an untimely tender or renewal, any inadvertent error in
the tendering or renewal of a contract shall result in free agency under
paragraph (2)(c) or (2)(d) above, whichever is applicable, only if the Player
has first given the Club written notice that the tendered or renewed contract
does not conform to the requirements of Article VI of this Agreement and the
Club has not retendered or reexercised a renewal in conformance with all
applicable rules within seven (7) days after receipt by the Club of written
notice of such defect. In the event of an untimely tender or renewal, the Player
shall immediately become a free agent under paragraph (2)(c) or (2)(d) above,
whichever is applicable, and the Club shall have no right to cure such a tender
or renewal. (But see Article VI(A)(7).)
A Club may also reserve, under separate headings on a Reserve List, Players who
properly have been placed on the Voluntarily
-53-
64
Retired List, the Military List, the Suspended List, the Restricted List, the
Disqualified List or the Ineligible List. (See Attachments 12, 13 and 14.)
B. FREE AGENCY
(1) Eligibility
Following the completion of the term of his Uniform Player's Contract, any
Player with 6 or more years of Major League service who has not executed a
contract for the next succeeding season shall be eligible to become a free
agent, subject to and in accordance with the provisions of this Section B.
(2) Procedure
The procedure set forth in this paragraph (2) shall apply to Players
eligible to become free agents pursuant to paragraph (1) above. Players who
otherwise become free agents under this Agreement shall be eligible to
negotiate and contract with any Club without any restrictions or
qualifications and the Clubs signing such free agents shall do so without
regard to the compensation and quota provisions of this Section B.
(a) A Player eligible to become a free agent under paragraph (1) above
may give notice of his election of free agency within the 15 day period
beginning on October 15 (or the day following the last game of the World
Series, whichever is later). Election of free agency shall be communicated
by telephone or any other method of communication by the Player to the
Association. Written notice of such election shall then be given within the
specified time limits by the Association, on behalf of the Player, to a
designated representative of the PRC and, effective upon receipt, the
Player shall become a free agent.
(b) During the period beginning on the day the Player becomes a free
agent and ending on the expiration of the free agency election period as
defined above in subparagraph (a), any Club representative and any free
agent or his representative may talk with each other and discuss the merits
of the free agent contracting, when eligible therefor, with the Club,
provided, however, that the Club and the free agent shall not negotiate
terms or contract with each other. The following subjects are among those
which may properly be discussed between any Club and such Player:
-54-
65
(i) the Player's interest in playing for the Club, and the Club's
interest in having the Player play for it;
(ii) the Club's plans about how it intends to utilize the Player's
services (as a starting pitcher or reliever, as a designated hitter or
not, platooning, etc.);
(iii) the advantages and disadvantages of playing for the Club
including the nature of the organization, the climate of the city,
availability of suitable housing, etc.;
(iv) length of contract;
(v) guarantee provisions;
(vi) no-trade or limited no-trade provisions.
Notwithstanding the foregoing, the free agent and his former Club may
engage in negotiations and enter into a contract during said period. Should
they enter into a contract during said period, the Club shall be deemed not
to have signed a free agent for purposes of paragraph (5) of this Section
B.
(c) Players who become free agents pursuant to this Section B shall,
upon compliance with the notice provisions of the above subparagraph (a)
and the expiration of the free agency election period, be eligible to
negotiate and contract with any Club, subject to the provisions of this
Section B.
(3) Rights of Former Club to Sign Free Agent
The following provision shall apply only to those Players who become free
agents under this Section B.
The former Club of a free agent, no later than by the December 7 following
the free agency election period, may offer to proceed with the Player to
salary arbitration under Article VI of this Agreement, for the next following
season. The Club's offer shall be communicated to the PRC, which shall notify
the Association in writing. Said offer shall be effective upon receipt by the
Association and the Club will not be permitted to retract the offer. If the
former Club of the free agent does not so offer, it shall not be entitled and
shall lose all rights to negotiate with, and sign, the free agent, until the
succeeding May 1.
On or before December 19, the Player may accept the Club's offer to
arbitrate. The Player's acceptance shall be communicated to the Association,
which shall notify the PRC. The Player's failure to accept the Club's offer
on or before December 19 shall be deemed to constitute rejection of the
offer.
-55-
66
If the Player accepts the offer to arbitrate, he shall be a signed player
for the next season and the parties will conduct a salary arbitration
proceeding under Article VI, provided, however, that the rules concerning
maximum salary reduction set forth in Article VI shall be inapplicable and the
parties shall be required to exchange figures on the last day established for
the exchange of salary arbitration figures under Article VI. The Club shall be
deemed not to have signed a free agent for purposes of paragraph (5) of this
Section B when a Player accepts salary arbitration pursuant to this paragraph
(3).
If the Player does not accept the former Club's offer to proceed to salary
arbitration as provided above, the former Club, after the succeeding January
8, shall not be entitled and shall lose all rights to negotiate with or sign
the Player, until the succeeding May 1.
(4) Compensation
(a) The former Club of a Player who: (i) became a free agent under this
Section B; and (ii) ranks as a Type A, B or C Player as defined below, shall
be entitled to receive compensation subject to the provisions of subparagraph
(c) below. Such compensation shall consist solely of the amateur draft
choices described in subparagraph (c) below and shall be awarded in the Major
League Rule 4 Draft succeeding the Player's election of free agency.
(b) A Type A, B or C Player shall be a Player who became a free agent under
this Section and who ranks as a Type A, B or C Player under the statistical
system of ranking Players set forth in the document entitled "A Statistical
System for the Ranking of Players," using statistics based on a two-year
average for each respective position group.
Type A Players: A Type A Player shall be a Player who ranks in the upper
thirty percent (30%) of his respective position group.
Type B Players: A Type B Player shall be a Player who ranks in the upper
fifty percent (50%) but not in the upper thirty percent (30%) of his
respective position group.
Type C Players: A Type C Player shall be a Player who ranks in the upper
sixty percent (60%) but not in the upper fifty percent (50%) of his
respective position group.
(c) A Type A, B or C Player shall be subject to compensation only if (i) he
is offered salary arbitration by his former Club on or before December 7
pursuant to Section B(3) of this Article
-56-
67
XX and signs a contract with another Club; or (ii) he signs a contract with
another Club prior to December 7. Further, a Type C Player shall not be
subject to compensation if he (iii) has not signed a Uniform Player's
Contract or reached agreement on terms as of the March 1 succeeding his
election of free agency; or (iv) has previously elected free agency under
this Section B (or under Article XVII(B)(2) of the 1976 Basic Agreement, or
under Article XVIII(B)(2) of the 1980 Basic Agreement as amended or under
Article XX(B)(2) of the 1990 Basic Agreement); or (v) has 12 or more years of
credited Major League service.
For such Type A Players, compensation to the Player's former Club shall be
an amateur draft choice ("Regular Draft Choice") of the signing Club and an
added amateur draft choice ("Special Draft Choice") in the Major League Rule
4 Draft. For such Type B Players, compensation to the Player's former Club
shall be a Regular Draft Choice of the signing Club in the Major League Rule
4 Draft. For such Type C Players, compensation to the Player's former Club
shall be a Special Draft Choice in the Major League Rule 4 Draft.
(d) The Regular Draft Choice of the signing Club described in subparagraph
(c) above shall be assigned as follows. If the signing Club is among the
first half of selecting Clubs, then the choice to be assigned for the highest
ranking free agent Player signed by such Club shall be its second choice,
with choices in the next following rounds to be assigned as compensation for
the signing of the other Players in descending order of ranking. If the
signing Club is among the second half of selecting Clubs, then such
compensation shall begin with the Club's first choice.
The Special Draft Choices described in subparagraph (c) above to be awarded
to the former Club shall be made as follows. If the Club has lost a Type A
Player, it shall be awarded an additional draft choice to be made immediately
following the first complete round of the draft and preceding the
commencement of the second round. Clubs which have lost Type A Players shall
make their choices in the reverse order of their won-lost percentage in the
preceding season. Ties shall be broken by lot. If the Club has lost a Type C
Player, it shall be awarded a draft choice to be made immediately following
the second complete round of the draft and preceding the commencement of the
third round. Clubs which have lost Type C Players shall make their choices in
the reverse order of their won-lost percentage in the preceding season. Ties
shall be broken by lot.
-57-
68
(5) Quota
(a) Clubs shall be limited in the number of Type A and B Players they may
subsequently sign to contracts. The number of signings permitted shall be
related to the number of Players electing free agency under this Section B.
If there are 14 or less such Players, no Club may sign more than one Type A
or B Player. If there are from 15 to 38 such Players, no Club may sign more
than two Type A or B Players. If there are from 39 to 62 such Players, no
Club may sign more than three Type A or B Players. If there are more than 62
such Players, the Club quotas shall be increased accordingly. There shall be
no restrictions on the number of Type C or unranked Players which a Club may
sign to contracts.
(b) Irrespective of the provisions of subparagraph (a) above, a Club shall
be eligible to sign at least as many Type A and B Players as it may have lost
through Players having become free agents under this Section at the close of
the season just concluded.
(6) Miscellaneous
(a) Any Club signing a contract after the expiration of the election period
with a Player under this Section B may not assign his contract until after
the next June 15. However, notwithstanding the foregoing, such contract may
be assigned for other Player contracts and/or cash consideration of $50,000
or less prior to the next June 16 if the Player gives written consent to such
transaction.
(b) There shall be no restriction or interference with the right of a free
agent to negotiate or contract with any baseball club outside the structure
of organized baseball, nor shall there be any compensation paid for the loss
of a free agent except as provided for in this Section B.
C. RIGHT TO REQUIRE ASSIGNMENT OF CONTRACT
(1) Eligibility
Any Player who has 5 or more years of Major League service at the time of
the assignment of his contract and whose contract covers the next succeeding
season, may elect, at the conclusion of the season following the assignment,
to require that his contract be assigned to another Club. If the Player,
however, subsequently signs a contract with the assignee Club, the Player
shall not be eligible to require that Club to assign his contract if the
contract executed with the assignee Club covers the next succeeding season. A
Player who requires the assignment of his contract pur-
-58-
69
suant to this Section C shall not be entitled to receive a Moving Allowance.
(2) Procedure
(a) NOTICE. A Player may exercise his right to require the assignment of
his contract by giving notice as hereinafter provided within the 15 day
period beginning on October 15 (or the day following the last game of the
World Series, whichever is later). Election to require the assignment of his
contract shall be communicated by telephone or any other method of
communication by the Player to the Association. Written notice thereof shall
then be given within the specified time limits by the Association, on behalf
of the Player, to a designated representative of the PRC, and shall become
effective upon receipt.
(b) PLAYER VETO RIGHTS. At the time notice is given as provided in
subparagraph (a) above, the Player may also designate not more than 6 Clubs
which he will not accept as assignee of his contract, and the Player's Club
shall be bound to assign his contract thereafter to a Club not on such list.
(c) FREE AGENCY IF ASSIGNMENT NOT MADE. If the Player's Club fails to
assign his contract, as set forth in this Section C, on or before March 15,
the Player shall become a free agent immediately eligible to negotiate a
contract with any Club without any restrictions or qualifications. The Player
shall not be deemed to have exercised his right to demand a trade, for
purposes of paragraph (5) below, and the Club signing such a free agent shall
do so without regard to the compensation and quota provisions of Section B. A
Player who becomes a free agent pursuant to this subparagraph shall not be
entitled to receive termination pay. Such a free agent shall receive
transportation and travel expenses in the same manner as he would have if he
had been unconditionally released except he shall be limited to receiving
travel expenses to his new Club if he reports to it directly, provided such
expenses are less than to his home city.
(3) Retraction by Player
A Player who has elected to exercise his right to require an assignment of
his contract may retract such election on or before March 15, by providing,
by hand or by facsimile transmission, written notice to his Club, provided
that such written notice must be provided prior to the time written notice is
provided, by hand or by facsimile transmission, to him (or to his certified
agent and to the Association in the event facsimile transmission is used) by
-59-
70
his Club notifying him that his contract has been assigned. If such a Player
has 10 or more years of Major League service, the last 5 of which have been
with one Club, he shall, upon such retraction, be deemed to relinquish his
right to approve any assignment of his contract to another Major League Club
which is completed within 60 days after such retraction or until March 15,
whichever is later. A Player who retracts his election shall be deemed not to
have exercised his right to require an assignment for purposes of paragraph
(5) below.
(4) Waiver by Player
At his sole election, a Player may, at the time he signs a multi-year
contract with a Club, waive the right to require the assignment of his
contract under this Section C, provided that the Player's contract with the
signing Club contains a no-trade provision which limits the signing Club's
right to assign the Player's contract to no more than sixteen (16) Clubs
designated or subsequently to be designated by the Player.
(5) Repeater Rights
Any Player whose contract is assigned as a result of a trade required
pursuant to this Section C, until he has completed an additional 3 years of
Major League service, shall not subsequently be eligible to exercise his
right to (i) require the assignment of his contract or (ii) become a free
agent, subject to subparagraphs (a) through (c) below.
(a) Any Club that retains reservation rights to a Player for a
succeeding championship season by virtue of the provisions of this
paragraph (5) shall notify such Player, at any time within the first five
(5) days of the free agency election period described in Section B(2) of
this Article XX, whether the Club offers to proceed with the Player to
salary arbitration for the succeeding season. The Club's offer shall be
communicated to the PRC, which shall notify the Association in writing.
Said offer shall be effective upon receipt by the Association and the Club
will not be permitted to retract the offer.
(b) In the event the Club notifies the Player of such a salary
arbitration offer, the Club shall be required to tender a contract to the
Player for the succeeding season and the Player may elect salary
arbitration in the same manner and at the same time as other Players, as
provided in Article VI(F). If a Player who is offered salary arbitration is
released pursuant to paragraph 7(b)(2) of the Uniform Player's Contract
prior to the date
-60-
71
he is actually tendered a Contract, he shall receive termination pay in
accordance with the provisions of Article IX(A), computed at a rate not
less than his previous year's salary.
(c) In the event the Club fails to notify the Player in writing of a
salary arbitration offer within the first five (5) days of the free agency
election period described in Section B(2) of this Article XX, the Player
thereafter may elect free agency pursuant to Section B of this Article XX
without any restrictions or qualifications. The Club signing the Player
shall do so without regard to the compensation and quota provisions of
Section B of this Article XX.
D. OUTRIGHT ASSIGNMENT TO NATIONAL ASSOCIATION CLUB
(1) Election of Free Agency-3-Year Player
Any Player who has at least 3 years of Major League service and whose
contract is assigned outright to a National Association club may elect, in
lieu of accepting such assignment, to become a free agent. In the event that
such Player does not elect free agency in lieu of accepting such assignment,
he may elect free agency between the end of the then current Major League
season and the next following October 15, unless such Player is returned to a
Major League roster prior to making such election.
(2) Election of Free Agency-Second Outright Assignment
Any Player whose contract is assigned outright to a National Association
club for the second time or any subsequent time in his career may elect, in
lieu of accepting such assignment, to become a free agent. In the event that
such Player does not elect free agency in lieu of accepting such assignment,
he may elect free agency between the end of the then current Major League
season and the next following October 15, unless such Player is returned to a
Major League roster prior to making such election.
(3) Effect of Free Agency Election
A Player who becomes a free agent under this Section D shall immediately be
eligible to negotiate and contract with any Club without any restrictions or
qualifications. Such Player shall not be entitled to receive termination pay.
Such a free agent shall receive transportation and travel expenses in the
same manner as he would if he had been unconditionally released except he
shall be limited to receiving travel expenses to his new club if he reports
to it directly, provided such expenses are less than to his home city.
-61-
72
(4) Procedure
Not earlier than 4 days prior to the contemplated date of an outright
assignment, or 8 days, if the Player has no options remaining or if the
assignment is during the period from the close of the championship season to
the opening of spring training, the Club shall give written notice to the
Player, with a copy to the Association, which shall advise the Player that he
may either (a) accept the assignment or (b) elect to become a free agent, and
that in the event he accepts the assignment, he may elect free agency between
the end of the then current Major League season and the next following
October 15, unless he is returned to a Major League roster prior to making
such election. The Player shall also be informed in the notice that, within 3
days after the date of the notice, or 8 days, if during the period from the
close of the championship season to the opening of spring training, he must
advise the Club in writing as to his decision whether to accept the
assignment. No such decision from a Player shall be considered effective
until twenty-four hours from his receipt of the Club's notice.
If the Club fails to give written notice, as set forth herein, to the
Player prior to the date of such assignment, the Player may, at any time,
elect to become a free agent pursuant to this Section D, provided, however,
that if the Club subsequently gives such written notice to the Player, he
shall, within 3 days thereafter, or 10 days, if during the period from the
close of the championship season to the opening of spring training, advise
the Club in writing as to his decision. No such decision from a Player shall
be considered effective until twenty-four hours from his receipt of the
Club's notice.
E. INDIVIDUAL NATURE OF RIGHTS
(1) The utilization or non-utilization of rights under Article XIX(A)(2)
and Article XX is an individual matter to be determined solely by each Player
and each Club for his or its own benefit. Players shall not act in concert
with other Players and Clubs shall not act in concert with other Clubs.
(2) Upon any finding of a violation of Section E(1) of this -Article XX by
two or more Clubs, any injured Player (or Players) shall be entitled to
recover in monetary damages three (3) times the lost baseball income, he (or
they) would have had but for the violation. Such lost baseball income shall
be limited to lost salary and other lost contractual terms, including lost
additional contract
-62-
73
years, lost signing bonuses, lost trade restriction provisions, lost option
buy-out provisions, and lost incentive bonuses (e.g., performance, awards,
attendance and weight bonuses). Damages (and fees and interest) may be
recovered only from the Clubs found to have violated Section E(1) of this
Article XX.
(3) Notwithstanding any other provision of this Basic Agreement, the
Arbitration Panel shall further order payment by the Clubs found to have
violated Section E(1) of this Article XX of all reasonable attorneys' fees
and expenses, expert witness fees and expenses and prejudgment interest on
the single damage calculation of the lost baseball income pursuant to
paragraph (2).
(4) Any injured Player (or Players or the Association) shall not be
entitled to recover any monetary damages pursuant to this Article XX(E)
other than those enumerated in paragraphs (2) and (3). However, nothing in
paragraphs (2) and (3) is intended to reflect any agreement between the
parties on mitigation issues.
(5) In addition, upon any finding by the Arbitration Panel of a violation
by five (5) Clubs or more of Section E(1) of this Article XX, the Association
shall have the right to reopen this Agreement upon sixty (60) days written
notice to the PRC.
(6) Upon any finding by the Arbitration Panel of a violation of Section
E(1) of this Article XX by two (2) or more Clubs, any injured free agent
Player will have the right to terminate his existing contract (or reserve
status) at his option immediately following the issuance of the finding by
the Arbitration Panel. However, no such termination shall take effect during
the period beginning on February 15 and ending with the conclusion of the
World Series. If the finding of the Arbitration Panel is issued at any time
on or after January 15, but before February 15, the Player shall have the
right to terminate his existing contract (or reserve status) at his option
either (a) immediately; or (b) within the fifteen (15) day period following
the conclusion of the next succeeding World Series. At the time any contract
(or reserve status) is terminated pursuant to this paragraph (6), such free
agent Player shall immediately have the right to negotiate with and enter
into a contract with any Club, without any restrictions or qualifications. If
the contract (or reserve status) is terminated, the free agent Player may
choose to reinstate his contract (or reserve status) at any time up until the
March 15 succeeding such termination.
(7) If a Player does not exercise his right pursuant to paragraph (6) to
reinstate his contract (or reserve status), all obligations of the Player and
of the Club under said contract (or reserve status)
-63-
74
shall cease as of the end of the period in which the Player has the right to
reinstate his contract (or reserve status), except the obligation of the Club
to pay the Player's compensation to that date. If at the end of the period
the Player has not signed a new contract and has not exercised his right to
reinstate his existing contract (or reserve status), at that point, the
Player shall be considered an unrestricted free agent.
(8) Utilization or non-utilization of the procedures set forth in paragraph
(6) above shall be without prejudice to any injured free agent Player.
However, the experience of each Player who utilizes such procedures shall be
considered by the Arbitration Panel in determining such further relief, if
any, to which he may be entitled.
(9) It is understood that in the event of a violation of Section E(1) of
this Article XX, the Arbitration Panel shall have the authority to order
such other and further non-monetary (e.g., injunctive) relief as may be
necessary to give full force and effect to the purposes of and to the rights
and benefits afforded to Players under this Article XX.
ARTICLE XXI-CREDITED MAJOR LEAGUE SERVICE
A. DEFINITION
Those Player rights expressly set forth in the Basic Agreement for which a
Player's eligibility is dependent upon credited Major League service will be
determined as follows:
(1) One full day of Major League service will be credited for each day of
the championship season a Player is on a Major League Club's Active List. A
total of 172 days of Major League credited service will constitute one full
year of credited service. A Player may not be credited with more than one
year of credited service, 172 days, in one championship season. Major League
service will be computed commencing with the date of the first regularly
scheduled championship season game, through and including the date of the
last regularly scheduled championship season game. This rule shall apply
uniformly to all Players and all Clubs notwithstanding differences in a
particular Club's schedule.
(2) For purposes of calculating credited service, a Player will be
considered to be on a Club's Active List if:
(a) placed on a disciplinary suspension by a Club, the League President
or the Commissioner, or on the Disabled List;
-64-
75
(b) called to active military duty for up to two years or if called to
emergency duty by the National Guard for a period of up to thirty days.
B. OPTIONAL ASSIGNMENTS
In the event a Player is optionally assigned to a National Association club in
any championship season for a total period of less than twenty (20) days, as
determined by the dates of the assignments and recalls respectively, the Player
shall be credited with Major League service during the period of such optional
assignments. (See Article XIX(E).)
ARTICLE XXII-MANAGEMENT RIGHTS
Nothing in this Agreement shall be construed to restrict the rights of the Clubs
to manage and direct their operations in any manner whatsoever except as
specifically limited by the terms of this Agreement.
ARTICLE XXIII-LUXURY TAX
A. GENERAL DEFINITIONS
The following definitions shall apply only to this Article XXIII, unless
expressly adopted for use in another Article of this Agreement.
(1) "Contract Year" shall mean the period from December 20 of one year
through and including December 19 of the following year, or such other
one-year period to which the PRC and the Association may agree. To the extent
that a Contract Year is referenced by a number in connection with a
particular calculation, the reference shall be to the calendar year of the
championship season that falls in that Contract Year.
(2) "Uniform Player's Contract" shall mean a National League or American
League Uniform Player's Contract. (See Schedule A.)
(3) "Split Contract" shall mean a Uniform Player's Contract which sets out
separate rates of pay for service with a minor league club and service with a
Major League Club.
(4) "Imputed Loan Interest Rate" for each Contract Year shall mean the
annual "Federal mid-term rate" as defined in Section 1274(d) of the Internal
Revenue Code for the October preceding that Contract Year.
(5) "Performance Bonus" shall mean a payment to a Player conditioned upon
the Player having achieved certain specified
-65-
76
levels of activity, provided that such bonuses must be consistent with Major
League Rule 3(b).
(6) "Award Bonus" shall mean a payment to a Player conditioned upon the
Player having achieved a particular status in connection with a recognized or
agreed-upon award or honor.
(7) "Base Salary" shall mean the amount set out in paragraph 2 of a Uniform
Player's Contract for a given championship season or any amount included in a
Special Covenant in lieu of inclusion in paragraph 2.
(8) "Guaranteed Year" shall mean any championship season included in a
Uniform Player's Contract for which more than 50% of the Player's Base Salary
is guaranteed by the Contract in the event of termination under paragraph
7(b)(2).
(9) "Tax Threshold" and "Applicable Tax Threshold" shall be defined as
provided in Section B below.
(10) "Actual Club Payroll" shall be defined as provided in Section C below.
Each Club's final Actual Club Payroll for a Contract Year in which the Luxury
Tax is applicable shall be calculated on the December 21 following that
Contract Year and shall be the exclusive figure used for the purpose of
determining whether a Club has exceeded the Applicable Tax Threshold.
(11) "Salary" shall be defined as provided in Section E below and shall be
attributable to Contract Years as provided in Sections C and E below.
(12) "Benefits" or "Player Benefit Costs" shall be defined as provided in
Section D below.
B. DETERMINATION OF LUXURY TAX
(1) Calculation of Tax.
There shall be no Luxury Tax for the 1996 Contract Year. During the 1997,
1998 and 1999 Contract Years, a Club with a final Actual Club Payroll that
exceeds the Tax Threshold applicable in that Contract Year ("Applicable Tax
Threshold") shall be assessed a Luxury Tax on the difference between its
final Actual Club Payroll and the Applicable Tax Threshold. Except as
specifically provided in Section B(4) below, a Club with a final Actual Club
Payroll at or below the Applicable Tax Threshold shall incur no Luxury Tax
for that Contract Year. There shall be no Luxury Tax in the 2000 Contract
Year and, if the Association exercises its
-66-
77
option to extend this Agreement under Article XXVII, in the 2001 Contract
Year.
(2) Initial Thresholds.
The Applicable Tax Threshold shall be $51 Million in the 1997 Contract
Year, $55 Million in the 1998 Contract Year and $58.9 Million in the 1999
Contract Year, unless adjusted pursuant to Section B(3) below. Under no
circumstance shall the Applicable Tax Thresholds for 1997, 1998 and 1999 be
less than these initial Thresholds.
(3) Threshold Adjustment Mechanism.
(a) The "Midpoint" for a Contract Year shall be the arithmetic mean of the
final Actual Club Payrolls of the Clubs with the fifth and sixth highest
final Actual Club Payrolls for that Contract Year.
(b) If the 1997 Midpoint is greater than $51 Million, then
(i) the Applicable Tax Threshold for the 1997 Contract Year shall be
the 1997 Midpoint; and
(ii) the Tax Threshold for the 1998 Contract Year shall become the 1997
Midpoint multiplied by 1.078.
(c) If the 1998 Midpoint is greater than $55 Million (or, if applicable,
the number calculated by operation of Section B(3)(b)(ii) above), then
(i) the Applicable Tax Threshold for the 1998 Contract Year shall be
the 1998 Midpoint; and
(ii) the Tax Threshold for the 1999 Contract Year shall become the 1998
Midpoint multiplied by 1.071.
(d) If the 1999 Midpoint is greater than $58.9 Million (or, if applicable,
the number calculated by operation of Section B(3) (c) (ii) above), then the
Applicable Tax Threshold for the 1999 Contract Year shall be the 1999
Midpoint.
(4) Additional 1997 Threshold Adjustment.
For the 1997 Contract Year only, the amount of Luxury Tax that the Club
with the fifth highest final Actual Club Payroll ("Fifth Club") would
otherwise have paid shall instead be allocated among and paid by the Fifth
Club and any other Club that has a final Actual Club Payroll that is (a)
greater than $51 Million and (b) less than but within $500,000 of the Fifth
Club's final Actual Club Payroll. If such adjustment is made, the Luxury Tax
that the
-67-
78
Fifth Club would otherwise have paid shall be allocated among the Clubs
identified above in proportion to the amount that each Club's final 1997
Actual Club Payroll exceeds $51 Million.
(5) Tax Rate.
The Luxury Tax rate shall be 35% in the 1997 and 1998 Contract Years and
34% in the 1999 Contract Year.
(6) Collection of Luxury Tax Proceeds.
(a) On the December 21 following each Contract Year, the Commissioner's
Office shall notify the Association and all Clubs of any amounts owed by any
Clubs under the Luxury Tax. Clubs shall make Luxury Tax payments to the
Commissioner's Office on or before January 31 of the next calendar year.
(b) Any Club that does not remit the full amount of Luxury Tax due by that
date shall have its next Major Leagues Central Fund ("Central Fund")
distribution and subsequent distributions, each net of any debt service
obligation to Fleet Bank, reduced by up to 50% until such obligation is
satisfied. For purposes of this subparagraph (b) only, proceeds from
expansion beyond 28 Major League Clubs shall not be considered part of a
Club's Central Fund distribution. Further, royalty payments from Major League
Baseball Properties shall not be considered part of a Club's Central Fund
distribution. Beginning with the day following the payment date specified in
subparagraph (a) above, interest shall be charged on any unpaid Luxury Tax
amounts at the Imputed Loan Interest Rate for the then current Contract Year.
Any interest collected pursuant to the preceding sentence shall be for the
benefit of and made available to the Industry Growth Fund and used for the
purposes set out in Article XXVI.
C. DETERMINATION OF ACTUAL CLUB PAYROLL
(1) Definition of Actual Club Payroll.
"Actual Club Payroll" of a Club in a Contract Year shall be the sum of:
(a) a 1/28th share (and a similar pro rata share following Major League
expansion) of Player Benefit Costs, as determined in Section D below;
(b) the sum of the yearly Salaries (as determined in accordance with
Section E below and as allocated among Clubs in
-68-
79
accordance with this Section C) attributable to that Contract Year of all
Players under a Uniform Player's Contract with the Club for that Contract
Year (including optionally assigned contracts); and
(c) any other amount includible in or deductible from Actual Club
Payroll as a result of the operation of Section C(2)(g) below or as a
result of any Club, any Player and/or either of the Parties hereto having
engaged in a transaction contrary to Section G(1) below or as a result of
an award by the Arbitration Panel under Article XI and/or Section F below.
(2) Rules for Allocation of Salary.
(a) GENERAL RULE.
If a Player remains on a Major League Club's Active List (as defined in
Article XXI) for an entire championship season, then all of the Salary
attributable to the Contract Year in which that championship season falls
shall be allocated to the Club's Actual Club Payroll in that Contract
Year.
(b) ASSIGNMENT OF CONTRACT.
If a Uniform Player's Contract is assigned by any means to another
Major League Club, the assignor Club shall be allocated Salary through the
date of the assignment and Salary shall begin being allocated to the
assignee Club on the following day, regardless of the Player's reporting
date.
(c) SALARY INCREASE UPON ASSIGNMENT.
If a Uniform Player's Contract provides for an increase in Salary upon
its assignment to another Major League Club, such increase shall be
included in a Player's Salary upon assignment and attributed to the
Contract Year (or Years) in which it is to be paid. Any such increase in
Salary attributable to the Contract Year during which the assignment
occurred shall be allocated to the Actual Club Payrolls of the assignor and
assignee Clubs pursuant to Section C(2)(b) above. Any such increase in
Salary attributable to a later Contract Year shall be allocated exclusively
to the assignee Club.
(d) CONTRACT SIGNED AFTER OPENING DAY.
If a Player first enters into a Uniform Player's Contract with a Club
after opening day of the championship season and has a Base Salary payable
over a full championship season, the Club shall include in Actual Club
Payroll such pro rata portion of the
-69-
80
Base Salary attributable to that Contract Year as the number of days that
the Player was on the Club's Active List (as defined in Article XXI) bears
to the number of days in the championship season. If such a Player has a
Base Salary expressly payable only over the portion of the championship
season that the Player is on the Club's Active List, the Club shall include
in Actual Club Payroll the entire Base Salary attributable to that Contract
Year.
(e) TERMINATION OF CONTRACT.
(i) If a Club terminates a Uniform Player's Contract that covers a
single championship season, the Club shall include in its Actual Club
Payroll for the Contract Year in which that season falls any Salary paid
to that Player, either under this Agreement or a Special Covenant to the
Contract (subject to any offset called for by this Agreement or a Special
Covenant).
(ii) If a Club terminates a multi-year Uniform Player's Contract while
it remains obligated to pay Salary under either this Agreement or a Special
Covenant to the Contract, Salary shall be allocated to that Club for each
Contract Year during which its obligation continues. Salary shall be
attributed to each such Contract Year pursuant to this Article XXIII
(subject to any offset called for by this Agreement or a Special Covenant).
This attribution shall apply even if the Club pays the Salary in advance.
(iii) Any Salary owed by a Club pursuant to a Uniform Player's Contract
terminated before December 7, 1996, shall not be included in any Club's
final Actual Club Payroll.
(f) SPLIT CONTRACTS.
A Player signatory to a Split Contract shall be included in Actual Club
Payroll at the total amount of his actual baseball earnings under that
Contract from Major League Clubs (and from National Association clubs, if
any) for that Contract Year, subject to subparagraph (g) below.
(g) OUTRIGHT ASSIGNMENT TO NATIONAL ASSOCIATION.
If a Uniform Player's Contract is assigned outright to a National
Association club, the Club shall exclude from its Actual Club Payroll such
pro rata portion of the Salary attributable to that Contract Year as the
number of days during the championship season that the Player was off the
Major League Club's 40-man roster bears to the number of days in the
championship season; provided, however, that the above exclusion shall
-70-
81
not apply to the Salary of any Player whose Contract has been assigned
outright to a National Association Club for the purpose of defeating or
circumventing the intention of the Parties as reflected by this Article
XXIII.
D. BENEFITS OR PLAYER BENEFIT COSTS
(1) Definition.
The Clubs' Benefits or Player Benefit Costs for a particular Contract Year
shall include the sums paid (or to be paid on a proper accrual basis for that
Contract Year) by or on behalf of the Clubs for, to, or on behalf of present
Players (and former Players when expressly noted) for:
(a) Contributions to the Major League Baseball Players Benefit Plan, in
the full amounts called for by paragraph 5 of the Agreement Re: Major
League Baseball Players Benefit Plan (including contributions made on
behalf of former Players and others); provided, however, that any
additional contribution allocated to the 1996 Plan year shall not be
included in 1997 Benefits;
(b) Workers' compensation premiums, payroll, unemployment compensation
and social security taxes (including payments made on behalf of a Player
released from a Contract that covers that Contract Year, provided that the
Player's Salary is included in a Club's final Actual Club Payroll for that
Contract Year);
(c) Spring training allowances (as described in Article VII(C)),
championship season meal and tip allowances (as described in Article
VII(B)), All-Star Game expenses (as adescribed in Article VII(E)) and
"in-season supplemental allowances" (as described in Article VII(F));
(d) Moving and traveling expenses (as described in Article VIII),
including payments made to former Players in connection with relocations
resulting from assignments while they were active Players;
(e) Contributions (in their entirety) to the post-season Players' pool
as described in Article X;
(f) The College Scholarship Plan (including payments made on behalf of
former players); and
(g) Player medical costs (I.E., fees to doctors, hospitals, and other
health care providers, and the drugs and other medical
-71-
82
supplies for the treatment of Player injuries), but not including salaries
of trainers or other Club personnel, or the costs of Club medical or
training equipment, or any costs reimbursed or paid for through workers'
compensation or any other medical insurance. Notwithstanding the foregoing,
the amount of Player medical costs included in "Benefits" may not increase
by more than ten percent (10%) each Contract Year beginning with the
increase from the 1996 to the 1997 Contract Year.
(2) Limitation on Annual Increase.
Notwithstanding the foregoing, beginning with the increase from the 1996 to
the 1997 Contract Year, the annual rate of increase for Player Benefit Costs
in any Contract Year may not exceed the annual rate of increase over that
year in the combined "sum of the yearly Salaries" (described in Section
C(1)(b) above) for all Clubs.
E. DETERMINATION OF SALARY
The determination of a Player's Salary for a particular Contract Year for the
purposes of interpretation and application of this Article XXIII only shall be
in accordance with the following rules.
(1) General Rule.
"Salary" shall mean the value of the total compensation (cash or otherwise)
paid to a Player pursuant to the terms of a Uniform Player's Contract,
including any guarantee by the Club of payments by third parties, for a
particular championship season. Consistent with the rules set out below, all
compensation paid to a Player pursuant to the terms of a Uniform Player's
Contract shall be attributable to the Contract Year(s) in which the Player is
required under the Contract to render services to a Club as a baseball
player, regardless of how the compensation is characterized under the
Contract.
(2) Average Annual Value of Guaranteed Multi-Year Contracts.
A Uniform Player's Contract with a term of more than one (1) championship
season ("Multi-Year Contract") shall be deemed to have a Salary in each
Guaranteed Year equal to the "Average Annual Value" of the Contract (plus any
bonuses subsequently included by operation of Section E(4) below). "Average
Annual Value" shall be calculated as follows: the sum of (a) the Base Salary
in each Guaranteed Year plus (b) any portion of a Signing
-72-
83
Bonus (or any other payment that this Article deems to be a Signing Bonus)
attributed to a Guaranteed Year in accordance with Section E(3) below plus
(c) any deferred compensation or annuity compensation costs attributed to a
Guaranteed Year in accordance with Section E(6) below shall be divided by
the number of Guaranteed Years.
(3) Signing Bonuses.
(a) Any Signing Bonus in a Uniform Player's Contract (and any other payment
this Article deems to be a Signing Bonus) shall be attributed, pro rata, over
the Guaranteed Years of the Contract. If a Contract contains no Guaranteed
Years, the Signing Bonus shall be attributed in full to the first year of the
Contract.
(4) Performance, Award and Other Bonuses.
(a) Any amounts that are actually earned by a Player as Performance
Bonuses, Award Bonuses or any other bonuses properly included in a Uniform
Player's Contract shall be included as part of the Player's Salary in the
Contract Year in which the service or performance giving rise to the Bonus
was provided. Potential bonuses shall not be included in the Average Annual
Value calculation made pursuant to Section E(2) above.
(b) A Special Covenant in a Uniform Player's Contract that provides that
Player performance or achievement in one year of the Contract will increase
the Base Salary in other year(s) of the Contract shall not be considered in
the determination of Salary until the triggering event occurs (other than, if
applicable, as a "potential bonus"), unless it is determined by the
Arbitration Panel that the Special Covenant was designed to defeat or
circumvent the intention of the Parties as reflected in this Article XXIII.
As long as such a finding is not made, the additional Base Salary triggered
by the Special Covenant shall count as part of the Player's Salary in the
Contract Year(s) to which it is attributed by the Contract once the
triggering event has occurred. Multi-Year Contracts shall not be recalculated
on an Average Annual Value basis once the triggering event has occurred; the
additional Base Salary shall be added to the Salary as originally calculated
for the Contract Year in question.
(5) Option Contracts.
(a) DEFINITIONS.
(i) A "Club Option Year" shall mean a championship season covered by a
Uniform Player's Contract in which the amount
-73-
84
payable pursuant to paragraph 2 of the Contract becomes due or guaranteed
at the election of the Club or by reason of specified performance by a
Player. Club Option Years shall not be considered "Guaranteed Years." In
addition, any other championship season covered by a Uniform Player's
Contract that is not a Guaranteed Year shall be treated as a Club Option
Year.
(ii) A "Player Option Year" shall mean a championship season covered by
a Uniform Player's Contract: (A) in which the amount payable pursuant to
paragraph 2 of the Contract becomes due or guaranteed at the election of
the Player; or (B) that can be nullified by a Player for a reason other
than those set forth in paragraph 7 of the Contract. A Player Option Year
shall be considered a "Guaranteed Year" if, pursuant to the Player's right
to elect or subject to his right to nullify, the terms of that year are
guaranteed within the definition in Section A(8).
(iii) The Parties recognize that Uniform Player's Contracts have
covered and may cover championship seasons that could be characterized
under the above definitions as both "Club Option Years" and "Player Option
Years" (hereinafter referred to as a "Mutual Option Year"). Salaries under
any such Contract that cannot extend beyond the 1999 Contract Year shall be
calculated as if the Mutual Option Year is a Player Option Year. Salaries
under any such Contract that can extend into the 2000 Contract Year (or
beyond) shall be calculated as if the Mutual Option Year is a Player Option
Year unless, pursuant to subparagraph (c)(ii) below, the "Club Option Year
Value" exceeds 122.5% of the "Highest Guaranteed Year Value" prior to the
Mutual Option Year, or its substitute. In the latter event, Salaries under
the Contract shall be calculated as if the Mutual Option Year is a Club
Option Year and the calculation called for in subparagraph (c)(ii)(B) below
shall be made and the entire Signing Bonus shall be allocated over the
Guaranteed Years prior to the Mutual Option Year.
(b) OPTION BUYOUTS.
(i) GENERAL RULE.
(A) If a Uniform Player's Contract contains a Club Option Year and
the Player is to receive consideration upon the non-exercise of that
option ("Option Buyout"), then such Option Buyout shall be deemed a
Signing Bonus.
(B) If a Contract contains more than one Option Buyout, then only
the Option Buyout that relates to the earliest Club
-74-
85
Option Year in the Contract shall be deemed a Signing Bonus. If,
however, the Player ultimately receives an Option Buyout that relates
to a Club Option Year other than the earliest Club Option Year, that
Option Buyout shall be included in Salary in the Contract Year covered
by the option that was not exercised.
(ii) POTENTIAL ADJUSTMENT TO PAYROLL OR TAX REFUND.
Notwithstanding subparagraph (b)(i) above, if the Player ultimately
does not receive the Option Buyout, then for the Contract Year covered by
that option, no portion of the Buyout shall be included in any Club's final
Actual Club Payroll. In addition, any Club whose final Actual Club Payroll
in a previous Contract Year had included that Buyout (or a portion thereof)
may elect to:
(A) receive a deduction (in the full amount of the Buyout included
in previous Contract Years) in its final Actual Club Payroll in the
Contract Year covered by that option; or
(B) receive a distribution from the Luxury Tax proceeds described
in Section H(4) below in the amount of any Luxury Tax paid by that Club
for any Contract Year as a result of the previous inclusion of the
Buyout in the Club's final Actual Club Payroll.
(c) CLUB OPTION YEARS.
(i) GENERAL RULE. If a Uniform Player's Contract covers one or more
seasons that are Club Option Years, the Player's Salary for the
championship seasons that are Club Option Years, if exercised, shall be the
total of the Base Salary and any bonuses included by operation of Section
E(4) above.
(ii) CONTRACTS EXTENDING INTO 2000 OR BEYOND. This subparagraph (ii)
shall apply only to a Uniform Player's Contract agreed to after December 7,
1996 that includes one or more Club Option Years that fall in the 2000
Contract Year or later.
(A) SPECIAL DEFINITIONS. For the purposes of this subparagraph (ii)
only, the following definitions shall apply:
"Club Option Year Value" shall be the Salary attributed to a Club
Option Year under subparagraph (i) above, plus any potential bonuses
(other than Award Bonuses) attributable to that Year, minus any Option
Buyout that relates to that Club Option Year.
-75-
86
"Highest Guaranteed Year Value" shall be the sum of the Base Salary
plus any attributed Signing Bonus, deferred compensation or annuity
costs, plus any potential bonuses (other than Award Bonuses) in the
Guaranteed Year of the Contract with the highest such sum; provided,
however, that if the Highest Guaranteed Year Value is itself greater
than 127.5% of the Average Annual Value of the Contract, then 127.5% of
the Average Annual Value of the Contract shall be substituted for the
Highest Guaranteed Year Value in the calculation called for by
subparagraph (c)(ii)(B) below.
(B) RULE. If the Club Option Year Value exceeds 122.5% of the
Highest Guaranteed Year Value, then the difference between the Club
Option Year Value and 122.5% of the Highest Guaranteed Year Value shall
be treated as a Signing Bonus in the calculation of the Contract's
Average Annual Value.
(C) POTENTIAL TAX REFUND. If a Club Option Year in a Uniform
Player's Contract subject to subparagraph (ii) is not exercised, any
Club (including a Club to which the Contract was assigned) that paid
Luxury Tax in a Contract Year in which that Club's final Actual Club
Payroll included an amount attributed under subparagraph (ii) shall
receive a distribution from the Luxury Tax proceeds described in
Section H(4) below in the amount of any Luxury Tax paid as a result of
that attribution.
(d) PLAYER OPTION YEARS.
(i) If a Player fails to exercise or chooses to nullify a Player Option
Year that falls before the 2000 Contract Year, the difference between the
amount paid to the Player under his Contract and the amount that has been
attributed to Actual Club Payroll of a Club shall be added to (or
subtracted from) Actual Club Payroll in the Contract Year in which the
Player Option Year falls. If the Contract has been assigned, the adjustment
called for in the preceding sentence shall be made to the Actual Club
Payroll(s) of the Club(s) to which Salary under that Contract had been
attributed in any Contract Year.
(ii) If a Player Option Year falls in the 2000 Contract Year or later,
and the Base Salary (plus any attributed Signing Bonus, deferred
compensation or annuity costs) ("Player Option Year Value") is less than
80% of the Base Salary (plus any attributed Signing Bonus, deferred
compensation or annuity costs) in the Guaranteed Year with the smallest
such figure before the first such Player Option Year (80% Figure), then the
difference
-76-
87
between the 80% Figure and the Player Option Year Value shall be allocated
pro rata across the Guaranteed Years preceding the first such Player Option
Year; provided, however, that if the 80% Figure is itself less than 75% of
the Average Annual Value of the Contract (calculated as if the Player
Option Year was not a Guaranteed Year), then the 80% Figure shall instead
be 75% of the Average Annual Value calculation set out immediately above.
(iii) POTENTIAL TAX REFUND. If a Player exercises or chooses not to
nullify a Player Option Year subject to subparagraph (ii) above, any Club
(including a Club to which the Contract was assigned) that paid Luxury Tax
in any Contract Year in which that Club's final Actual Club Payroll
included an amount attributed under subparagraph (ii) above shall receive a
distribution from the Luxury Tax proceeds described in Section H(4) below
in the amount of any Luxury Tax paid as a result of that attribution.
(6) Deferred Compensation.
(a) DEFINITION.
"Deferred Compensation" shall mean any Salary payable to a Player pursuant
to a Uniform Player's Contract in a Contract Year after the last championship
season for which the Contract requires services as a baseball player to be
rendered.
(b) ATTRIBUTION.
(i) Deferred Compensation shall be included in a Player's Salary as if
paid in the championship season to which it is attributed under a Uniform
Player's Contract. If a Contract does not attribute Deferred Compensation,
the Contract shall be treated as if the Deferred Compensation was
attributed equally to each of the Guaranteed Years in the Contract.
(ii) If the Deferred Compensation is to be paid with interest at an
effective rate that is within one and one-half percentage points of the
Imputed Loan Interest Rate for the first Contract Year covered by the
Contract, then the Deferred Compensation shall be included at its stated
value. Otherwise, the Deferred Compensation shall be included at its
present value in the season to which it is attributed, said present value
to be calculated by increasing any such payments by the Contract's stated
interest rate, if any, and then reducing such payments back to their
present value by applying as a discount rate the Imputed Loan Interest Rate
for the first Contract Year
-77-
88
covered by the Contract. If the terms of a Contract are confirmed by the
Association and the PRC before the Imputed Loan Interest Rate for the first
Contract Year covered by the contract is available, the Imputed Loan
Interest Rate shall be the annual "Federal mid-term rate" as defined in
section 1274(d) of the Internal Revenue Code for the month preceding the
month in which terms are confirmed. If a Uniform Player's Contract uses the
date or year in which a Player retires as a triggering event for the
commencement of payment of the Deferred Compensation, it will be assumed
for purposes of calculating Salary under this Article only that the Player
retires on the day that he reaches age 40 or at the end of the Contract,
whichever is later.
(c) An "Annuity Compensation Arrangement" is an agreement in a Uniform
Player's Contract whereby the Club promises to purchase an annuity to pay the
Player after he is no longer required to render services as a baseball player
under such Uniform Player's Contract.
(i) The portion of the cost of the annuity to be paid by the Club while
the Player is required to render services as a baseball player under the
Contract shall be included as Salary for the Contract Year in which such
cost is to be paid.
(ii) The portion of the cost of the annuity instrument to be paid by
the Club after the Player is no longer required to render services as a
baseball player under such Contract, if any, shall be treated as Deferred
Compensation attributable pro rata over the Guaranteed Years of the
Contract at its present value as calculated pursuant to paragraph (6)(b)
above. Any compensation that the Player is scheduled to receive pursuant to
such Annuity Compensation Arrangement shall not be considered Salary or
Deferred Compensation.
(7) Loans to Players.
For purposes of this Article XXIII, the following rules shall apply to any
loans made by a Club to or at the direction of a Player.
(a) If any such loan bears no interest rate or an effective interest
rate more than one and one-half percentage points below the Imputed Loan
Interest Rate, then an amount of "Imputed Income" as calculated pursuant to
subparagraph (b) below shall be included in the Player's Salary for each
Contract Year that the loan remains unpaid. For any other loan, there shall
be no "Imputed Income" (as defined in subparagraph (b) below) included in
the Player's Salary.
-78-
89
(b) "Imputed Income" for each Contract Year covered by a Uniform
Player's Contract shall be calculated by multiplying the difference between
the Imputed Loan Interest Rate and the stated rate, if any, by the
outstanding balance of the loan.
(c) If a Club has made a loan to a Player and forgives part or all of
the loan, the forgiven loan amount shall be counted as Salary in the
Contract Year in which the loan is forgiven; provided, however, that if a
loan that is made after December 7, 1996 is forgiven in a Contract Year in
which there is no Luxury Tax, whether such Contract Year is during the term
of this Agreement or not, and if the Club forgiving the loan would have
been assessed a Luxury Tax for any Contract Year had the loan, by itself or
in combination with other loans, been considered Salary from the outset,
then the forgiveness of the loan shall be presumed to be an action designed
to defeat or circumvent the Luxury Tax. Unless the Club that forgave such a
loan can rebut the foregoing presumption, the Club shall be required to pay
into the Central Fund an amount equal to the Luxury Tax(es) that the Club
would have paid (based on the Applicable Tax Thresholds that were in effect
when final Actual Club Payrolls were calculated for the Contract Year(s)
in which a Luxury Tax would have been paid) had the forgiven loan (or
portion thereof) originally been considered Salary.
F. ASSOCIATION'S RIGHTS
(1) Actual Club Payroll Information.
(a) On or before opening day of the 1997 championship season, the PRC shall
provide the Association with a list for the 1996 Contract Year of each Club's
final Actual Club Payroll, broken down by Player, and 1996 Player Benefit
Costs.
(b) In each Contract Year in which the Luxury Tax is operational, the PRC
shall provide the Association with two "Preliminary Actual Club Payroll
Compilations," the first of which shall be provided within 14 days following
opening day of that championship season and the second of which shall be
provided within 14 days following that season's All-Star Game. Each
Preliminary Actual Club Payroll Compilation shall consist of a list of each
Club's Actual Club Payroll, broken down by Player, and an estimate of Player
Benefit Costs for that Contract Year, as of opening day and the All-Star
game, respectively. In addition to the above, the Association may, from time
to time, request the PRC to produce a Preliminary Actual Club Payroll
Compilation or any portion
-79-
90
thereof (including the PRC's evaluation of any Uniform Player's Contract, the
terms of which have been confirmed by the Association and the PRC) and the
PRC shall provide such information within 14 days of each such request,
provided that the Association will not make an unreasonable number of
requests in any Contract Year.
(c) Upon the presentation of any evidence that a Player and a Club are
prepared to agree to a Uniform Player's Contract, either Party to this
Agreement (I.E., the Association or PRC) may initiate a process whereby the
Parties prepare and exchange evaluations of that prospective Contract for
Luxury Tax purposes. The evaluations shall be exchanged within 48 hours of
the initiation of the process by either Party.
(d) The PRC shall provide the Association with a list of the final Actual
Club Payrolls, broken down by Player, and Player Benefit Costs for that
Contract Year and the Luxury Tax assessed against each Club ("final Actual
Club Payroll Compilation"), if any, for the just completed championship
season on or before the December 21 following each championship season
covered by this Agreement in which the Luxury Tax is applicable.
(2) Association's Rights to Challenge.
(a) INFORMATION PROVIDED PURSUANT TO SECTION F(1)(b).
The Association shall have the right to question any calculation included
in any information provided pursuant to Section F(1)(b) above and the PRC
shall provide an answer to any such question within 10 days. If thereafter
the Association disagrees with any calcu-lation, it may file a challenge in
the Grievance Procedure in Article XI at any time before the next November
30. At the request of either Party, any such Grievance shall be handled on an
expedited basis, with documents being exchanged within 10 days of the filing
of the Grievance, a hearing commencing within 15 days of the filing of the
Grievance and the Panel issuing an Award (with opinion to follow, if
necessary) no later than 15 days after the commencement of the hearing.
Failure by the Association to challenge any such calculation shall not
preclude the Association from challenging that calculation if contained in a
final Actual Club Payroll Compilation nor shall such failure be of any
relevance in such a challenge.
(b) INFORMATION PROVIDED PURSUANT TO SECTION F(1)(c).
The Association shall have the right to question any calculation included
in any information exchanged pursuant to Section
-80-
91
F(1)(c) above and the PRC shall provide an answer to any such question within
24 hours. If thereafter the Association disagrees with the calculation put
forward by the PRC, it may file a challenge in the Grievance Procedure in
Article XI within three business days. Any such Grievance shall be handled on
an expedited basis, with documents being exchanged as soon as possible, a
hearing commencing within three business days of the filing of the Grievance
(or as soon thereafter as is practicable) and the Panel issuing an Award
(with opinion to follow, if necessary) no later than three business days
after the commencement of the hearing. Failure by the Association to
challenge any such calculation shall not preclude the Association from
challenging that calculation if contained in a final Actual Club Payroll
Compilation, nor shall such failure be of any relevance in such a challenge.
Failure by the PRC to raise or pursue with the Arbitration Panel any
disagreement with the Association concerning information exchanged pursuant
to Section F(1)(c) above shall be irrelevant to any challenge by the
Association to any calculation.
(c) INFORMATION PROVIDED PURSUANT TO SECTION F(1)(d).
The Association may challenge any calculation included in information
provided pursuant to Section F(1)(d) (the final Actual Club Payroll
Compilation) by filing a Grievance pursuant to Article XI. If the Association
disagrees with any calculation that affects the Luxury Taxes assessed for
that Contract Year, it shall file a Grievance within 45 days after it has
received that Year's final Actual Club Payroll Compilation and the notice of
assessed Luxury Taxes (see Section B(6)(a)). Failure by the Association to
challenge any calculation included in a final Actual Club Payroll Compilation
shall not preclude the Association from challenging that calculation if
contained in a final Actual Club Payroll Compilation for a later Contract
Year, nor shall such failure be of any relevance in such a challenge. Such a
challenge, however, will not result in changes to Luxury Tax amounts assessed
for prior Contract Years.
Any Grievance challenging a final Actual Club Payroll Compilation shall be
handled by the Parties on an expedited basis with documents being exchanged
within 10 days of the filing of the Grievance, a hearing commencing within 15
days of the filing of the Grievance and the Panel issuing an Award (with
opinion to follow, if necessary) no later than 15 days after the commencement
of the hearing. The filing of a Grievance by the Association shall not
preclude the PRC from assessing and collecting the Luxury Tax in accordance
with Section B and using Luxury Tax
-81-
92
proceeds in accordance with Section H, unless the Chairman of the Arbitration
Panel, upon application by the Association, provides otherwise. Unless the
Chairman provides otherwise, any adjustments to the Luxury Tax assessments
and distributions made pursuant to Section F above necessitated by the
resolution of an Association Grievance shall be made by the PRC once the
Grievance is finally resolved.
(d) RELATIONSHIP TO GRIEVANCE PROCEDURE.
(i) Nothing in this Section F is intended to affect the application of
the Grievance Procedure to any other complaint involving the existence or
interpretation of, or compliance with, this Article XXIII or any provision
therein. Moreover, unless specifically modified by this Section F, it is
intended that the provisions of Article XI will govern the resolution of
disputes under this Article XXIII.
(ii) It is agreed that the existence of the expedited procedures in
this Section F will not prohibit either Party from arguing that another
dispute subject to Article XI should be heard prior to any dispute related
to this Article XXIII.
G. OTHER UNDERTAKINGS
(1) Neither the Parties hereto nor any Club or any Player shall enter into
any agreement, Uniform Player's Contract or other transaction, that includes
any terms designed to defeat or circumvent the intention of the Parties as
reflected by this Article XXIII.
(2) At the time a Club and a Player enter into any Uniform Player's
Contract, or at the time of the assignment of any Uniform Player's Contract,
there shall be no unreported understandings or agreements of any kind between
the Player and the Club. No other understandings or agreements, whether made
before or after the signing of the Uniform Player's Contract or its
assignment, shall be valid, recognizable or of any effect whatsoever, unless
expressly set forth in a new or supplemental Uniform Player's Contract
executed by the Player and the Club and complying with this Agreement and the
Major League Rules. (See "Supplemental Agreements" paragraph of the Uniform
Player's Contract.)
(3) If a Club and a Player currently signatory to a Uniform Player's
Contract desire to modify or amend their contractual relationship, they must
enter into a new Uniform Player's Contract that covers the then current
championship season or, if signed after the championship season has started,
the next immediate championship season.
-82-
93
The Average Annual Value of such new Contract shall be increased or
decreased, whichever is applicable, by the figure arrived at by subtracting
the amount of Salary that has been attributed under the rules of this Article
XXIII to a Club in previous Contract Years under the Contract that is being
replaced from the amount that was actually paid to the Player by a Club in
those Contract Years. If a new Contract is signed during a championship
season to commence with the next championship season, the calculation called
for in this paragraph (3) shall be performed at the end of the then current
championship season. Except for the limited circumstances described in this
paragraph (3), no Player may be signatory to more than one unexpired Uniform
Player's Contract at any time.
H. USES OF LUXURY TAX PROCEEDS
Luxury Tax proceeds collected pursuant to Section B(6) above shall be used as
follows.
(1) The first $10 million of the proceeds collected for the 1997 Contract
Year shall be used for those purposes described in Article XXV (C)(2).
(2) The next $7 million of the proceeds collected for the 1997 Contract
Year shall be used for the purposes described in Article XXV (C)(1)(b).
(3) The next $3 million of the proceeds (collected for any Contract Year)
shall be used to reimburse any initial funding provided by the Clubs to the
Industry Growth Fund under Article XXVI (E)(1), with the balance of the $3
million, if any, being for the benefit of and made available to the Industry
Growth Fund.
(4) The next $2.5 million of the proceeds (collected for any Contract Year)
shall be held in reserve for the purposes described in paragraphs (5)(b)(ii),
(5)(c)(ii)(C) and (5)(d)(iii) of Section E and, if the Parties agree based on
experience under such Salary attribution rules, another $2.5 million of
proceeds (collected for any Contract Year) shall be held in reserve for such
purposes. Any amount held in reserve pursuant to this paragraph (4) (and
interest earned on such amounts) shall be for the benefit of and made
available to the Industry Growth Fund and used for the purposes set out in
Article XXVI if and when the Parties agree that there is no longer any need
for such reserve.
(5) The remaining proceeds, if any, shall be for the benefit of and made
available to the Industry Growth Fund and used for the purposes set out in
Article XXVI.
-83-
94
ARTICLE XXIV-PAYROLL TAX
A. PURPOSE
The Association, as part of this Agreement, has agreed to make a contribution on
behalf of members to be used to further the growth and development of the Game
and the industry on an individual Club and on an aggregate basis with the view
toward advancing the interests of both the Clubs and the Players.
B. TOTAL PAYMENT
The total amount of contribution ("the Total Payment") shall be equal to the sum
of 2.5% of the final Actual Club Payrolls for all Clubs for Contract Years 1996
and 1997, as defined in Article XXIII, subject to the modifications set forth in
Section C below. The Association guarantees that the Total Payment shall be no
less than $43,088,692. The Association, in its discretion, shall determine the
source or sources of funds from which the Total Payment shall be contributed.
Subject to any applicable legal limitations, the Parties agree that the
Association, in its discretion, may require the Clubs to deduct and retain a
specified percentage of payroll as one of the sources of the Total Payment (or a
portion thereof).
C. MODIFICATIONS TO DEFINITION OF FINAL ACTUAL CLUB PAYROLL FOR CONTRACT YEARS
1996 AND 1997
In calculating the Total Payment pursuant to this Article, the definition of
final Actual Club Payroll in Article XXIII shall be used subject to the
following modifications.
(1) A Club's final Actual Club Payroll shall not include a pro rata share
of Player Benefit Costs, as described in Section C(1)(a) and Section D of
Article XXIII.
(2) A Club's final Actual Club Payroll shall include only the Salaries of
those Players who are on a Club's 25-man roster or Major League Disabled List
pursuant to Major League Rule 2(g) on August 31 of the Contract Year in
question.
(3) The Salary of each Player described in Section C(2) above for a given
Contract Year shall be calculated as if the Player spent the entire
championship season on the 25-man roster or Major League Disabled List of the
Club he was on as of that August 31. No such assumption, however, shall be
made for purposes of calculating any bonuses.
-84-
95
(4) Notwithstanding paragraphs (2) and (3) above, the following amounts
shall be deducted from each Club's final Actual Club Payroll:
(a) for the 1996 Contract Year, $109,000 for each Player identified in
Section C(2) above with a Base Salary for 1996 of $150,000 or less; and
(b) for the 1997 Contract Year, $109,000 for each Player identified in
Section C(2) above with a Base Salary for 1997 of $175,000 or less.
(5) Salary shall be determined in accordance with Section E of Article
XXIII, except that:
(a) Paragraphs (5)(c)(ii) and (5)(d)(ii) of Section E shall not be
applied in any circumstance; and
(b) any Mutual Option year (as defined in Section E(5)(a)(iii)), shall
be considered a Player Option Year in all circumstances; the rule
applicable to Mutual Option Years extending into the 2000 Contract Year or
beyond, as described in Section E(5)(a)(iii), shall not be applied.
D. CALCULATION OF TOTAL PAYMENT
(1) The Total Payment shall be calculated initially by the PRC. The PRC
will provide the Association with an initial calculation of the 2.5% sum for
the 1996 Contract Year on or before opening day of the 1997 championship
season. The PRC will provide the Association with an initial calculation of
the 2.5% sum for the 1997 Contract Year on or before February 1, 1998. Each
initial calculation shall include the aggregate amount owed and an
explanation therefor, including a Club-by-Club listing of the Salaries used
to calculate the aggregate amount.
(2) Within 45 days after the PRC provides the Association with the initial
calculations for the 1996 Contract Year and for the 1997 Contract Year, the
PRC and the Association shall meet to discuss the PRC's initial calculation
for that Contract Year.
(3) If there is any dispute as to the initial calculations or as to the
Total Payment, either Party shall provide notice to the other of such dispute
by filing a Grievance pursuant to Article XI no later than 45 days after the
date on which the PRC and the Association meet to discuss the PRC's initial
calculation for the 1997 Contract Year. At the request of either Party, any
such Grievance shall be handled on an expedited basis. Unless the Chairman of
-85-
96
the Arbitration Panel provides otherwise, any adjustments to the Total
Payment made pursuant to this paragraph (3) necessitated by the resolution of
a Grievance shall be made by the Association once the Grievance is finally
resolved.
(4) Other than as expressly provided in paragraph (3) above, nothing in
this Section D is intended to affect the application of the Grievance
Procedure to any complaint involving the existence or interpretation of, or
compliance with this Article XXIV or any provision herein.
E. DATE OF PAYMENT AND USES
The Total Payment shall be paid and used as follows.
(1) The first $4,088,692 million shall be paid in accordance with, and be
used for the purposes described in, Section I(A)(2) of the Strike Settlement.
(See Attachment 22.)
(2) The next $3 million shall be used to reimburse any initial funding
provided by the Association to the Industry Growth Fund under Article
XXVI(E)(1), with the balance of the $3 million, if any, being for the benefit
of and made available to the Industry Growth Fund.
(3) The next $36 million shall be used for the purposes described in
Article XXV(C)(3)(b) and (C)(4)(b).
(4) The balance of the Total Payment shall be for the benefit of and made
available to the Industry Growth Fund and used for the purposes set out in
Article XXVI.
ARTICLE XXV-THE REVENUE SHARING PLAN
A. DEFINITIONS
(1) "Financial Information Questionnaire," or "FIQ," shall mean the
questionnaire completed by each of the Major League Clubs and submitted,
together with audited financial statements, on an annual basis for each
revenue sharing year to the Office of the Commissioner. A revenue sharing
year is defined as the fiscal year of the championship season that falls in
that year (and shall be referred to, for any specific revenue sharing year
under this Article, as "1996," "1997," "1998," ETC., or the "1996 revenue
sharing year," the "1997 revenue sharing year," ETC.). From time to time,
Clubs are also required by the Office of the Commissioner to supplement the
FIQ by submitting additional information in a "Supplementary Information
Questionnaire" ("SIQ").
-86-
97
(2) "Defined Gross Revenue" shall mean the aggregate operating revenues
from baseball operations received, or to be received on an accrual basis, by
each Club on an annual basis as reported in the Club's FIQ. "Baseball
Operations" shall mean all activities of a Club that generate revenue, except
those wholly unrelated to the business of Major League Baseball. Baseball
Operations shall include (by way of example, but not by way of limitation):
(a) an activity that could be conducted by a non-Club entity but which
is conducted by a Club because its affiliation or connection with Major
League Baseball increases the activity's appeal; and
(b) an activity from which revenue or value is received as a result of
a decision or agreement to forego what otherwise would be Defined Gross
Revenue.
(3) "Central Revenue" shall mean all of the centrally-generated operating
revenues of the Major League Clubs that are administered by the Office of the
Commissioner or central baseball including, but not limited to, revenues from
national and international broadcasting agreements (television, cable and
radio), Major League Baseball Properties, Baseball Television, Inc., Major
League Baseball Enterprises, the Copyright Arbitration Royalty Panel,
superstation agreements between the Commissioner's Office and the Clubs whose
games are transmitted on a distant signal ("Superstation Agreements"), the
All-Star Game and national marketing and licensing.
(4) "Local Revenue" shall mean a Club's Defined Gross Revenue less its
share of Central Revenue.
(5) "Actual Stadium Expenses" shall mean the "Stadium Operating Expenses"
of each Club, as reported on an annual basis in the Club's FIQ.
(6) "Net Local Revenue" shall mean a Club's Local Revenue less its Actual
Stadium Expenses.
(7) The "Participating Clubs" shall be all existing Clubs (even if
relocated) for all years of this Agreement, except the Colorado Rockies and
the Florida Marlins shall be included as Participating Clubs beginning with
1998. The Tampa Bay Devil Rays and the Arizona Diamondbacks shall be included
as Participating Clubs beginning with 2000.
(8) For the "Straight Pool Plan" operating at full (100%) implementation,
the amount of net payment or net receipt for each Participating Club shall be
determined as follows: Each Participating Club contributes 39% of its Net
Local Revenue to a putative pool; that pool is then divided equally among all
Participating Clubs,
-87-
98
with the difference between each Club's payment into the putative pool and
its receipt therefrom producing the net payment or net receipt for that Club.
(9) For the "Split Pool Plan" operating at full (100%) implementation, the
amount of net payment or net receipt for each Participating Club shall be
determined as follows: Each Participating Club contributes 20% of its Net
Local Revenue to a putative pool; 75% of that pool is divided equally among
all Participating Clubs; the remaining 25% of the pool is divided only among
Participating Clubs below the arithmetic mean of Net Local Revenue in
proportion to each such Club's distance from said average, with the
difference between each Club's payment into the putative pool and its receipt
or receipts therefrom producing the net payment or net receipt for that Club.
(10) The "Hybrid Plan" operates by assigning to each Participating Club the
more favorable result to that Club at full (100%) implementation of the
Straight Pool Plan or the Split Pool Plan. The operation of the Hybrid Plan
will create a "Shortfall," in the sense that payments due from Participating
Clubs will be less than the payments due to other Participating Clubs.
(11) Those Participating Clubs that receive net receipts in a given revenue
sharing year under the revenue sharing plan shall be referred to for that
year as "Payee Clubs." Those Participating Clubs that make net payments in a
given revenue sharing year shall be referred to for that year as "Payor
Clubs."
(12) For 1998 and 1999 only, "Supplemental Pool Payments" shall be made
available to certain Participating Clubs from a total of $36 Million produced
pursuant to Article XXIV. The Supplemental Pool Payments shall be payable $18
Million in December 1998 and $18 Million in December 1999.
(13) The "Administrator" shall be the representative (or representatives)
responsible, in consultation with the Association, for administration of the
revenue sharing plan under this Article. (See Section D, Administration,
below.)
B. GENERAL PRINCIPLES
(1) Intent of the Plan.
(a) NET TRANSFER VALUE. The intent of the revenue sharing plan is to effect
a net transfer of Net Local Revenue among Participating Clubs of $70 Million
at 100% implementation of the plan, based on 1994 projections.
-88-
99
(b) MARGINAL TAX RATE. The maximum marginal tax rate on Payor Clubs under
the plan shall not exceed 20% at full (100%) implementation of the plan.
(2) Other Sharing.
(a) GATE RECEIPTS AND LOCAL PAY CABLE. Effective with 1996, the Clubs shall
cease sharing gate receipt revenues pursuant to Article 7.6 of the American
League Constitution and Article Thirteen of the National League Constitution
and local pay cable revenues pursuant to the Radio and Television
Broadcasting Agreement of the American League Clubs and the National League
Television Agreement. Notwithstanding the foregoing, the League Offices shall
be funded in a substantially equivalent fashion as they have been in the
past.
(b) CENTRAL REVENUE. Except as specifically provided in paragraphs (1) and
(2) of Section C below with respect to a total of $32.4 Million in
superstation payments attributed to 1994 and 1995, nothing in this Article is
intended to alter current agreements among the Clubs pertaining to Central
Revenue, including but not limited to, the Major Leagues Central Fund
("Central Fund"), Major League Baseball Properties, Baseball Television,
Inc., Major League Baseball Enterprises, the Copyright Arbitration Royalty
Panel, Superstation Agreements, the All-Star Game and national marketing and
licensing.
(3) Accounting Rules.
(a) In calculating net payments and net receipts, the Administrator, on
behalf of the Clubs, shall use the definitions contained in the 1995 FIQ,
subject to the provisions of Section D below. Although the intention is to
follow Generally Accepted Accounting Principles ("▇▇▇ ▇▇▇▇ rules") in the
adoption and application of revenue and expense definitions contained in the
FIQ and in the accounting conventions, policies and practices reflected in
the FIQ (and in any changes to any of the foregoing), it is acknowledged that
specific exceptions to the GAAP rules have been and will be warranted to
ensure uniformity, consistency and fair treatment among the Clubs, subject to
the provisions of Section D below.
(b) The Association has received copies of two Reports ("the Reports")
containing the accounting procedures the Clubs desire the Administrator to
utilize in the administration of the revenue sharing plan. The Reports are
entitled: "Revenue Sharing Definitions Labor Policy Committee Recommendations
Draft 11/5/96";
-89-
100
and "Revenue Sharing Definitions Subcommittee Review of MLB Accounting
Practices August 29, 1996." The Reports recommend that the GAAP rules are an
acceptable basis for reporting most financial transactions and therefore
should be followed as a general rule in the adoption of revenue and expense
definitions contained in the FIQ. The Reports further recommend that the GAAP
rules or, in designated situations, federal tax principles, should be the
"default" standards in the accounting conventions, policies or practices
relating to information contained in the FIQ. The Reports also recommend some
departures from the GAAP rules for certain specified transactions.
Utilization by the Administrator of the recommendations contained in the
Reports is subject to consultation with the Association and the other
procedures set out in Section D below.
(4) Interests of the Association.
The revenue sharing plan may have a significant impact on the industry
globally as well as on individual Clubs. Accordingly, the Parties acknowledge
that the Association has a significant interest in any aspect of the revenue
sharing plan or its operation materially affecting either: (a) the overall
industry-wide net transfer of Net Local Revenue among Participating Clubs; or
(b) the amounts of net payments made by individual Payor Clubs and the
amounts of net receipts received by individual Payee Clubs. The Parties also
acknowledge that the Association has a significant interest in the
administration and distribution of Supplemental Pool Payments. This paragraph
shall not be construed to limit the Association's right to assert that it has
other legitimate interests in the operation of the plan.
(5) Other Undertakings.
(a) A principal objective of the revenue sharing plan is to promote the
growth of the Game and the industry on an individual Club and on an aggregate
basis. Accordingly, net receipts and Supplemental Pool Payments received
under the revenue sharing plan will be used in furtherance of this objective.
(b) The Clubs and the Association recognize that the participation of two
Clubs is necessary for the production of the on-field competition that the
Clubs sell to the public. The net payments and net receipts required by this
Article XXV reflect a continuation of the amounts paid directly to the
visiting Clubs and are in recognition of the fact that visiting Clubs should
share, and traditionally have shared, in the economic benefits jointly
generated by the Game at another Club's home field.
-90-
101
(c) The Clubs and the Association agree that the amounts paid as
Supplemental Pool Payments are contributions made on behalf of the members of
the Association pursuant to Article XXIV to further the growth and
development of the Game with the view toward advancing the interests of both
the Clubs and the Players. Accordingly, the amounts paid as Supplemental Pool
Payments shall be regarded by the Clubs as if such amounts were net receipts
produced under the revenue sharing plan.
(d) None of the Parties hereto shall enter into any agreement, or engage in
any transaction or other conduct, designed to defeat or circumvent the
intentions of the Parties as reflected in this Article XXV.
C. OPERATION
(1) 1996.
(a) For 1996, the Hybrid Plan will be implemented on a 60% basis:
Participating Clubs will pay or receive (as the case may be) 60% of the net
payment or net receipt produced by the Hybrid Plan at full (100%)
implementation. Any Shortfall produced shall be funded by superstation
payments attributed to 1994 and 1995.
(b) In addition to the net payments or net receipts produced by the Hybrid
Plan in 1996 (as set out in Section C(1)(a)), each of the five (5) American
League Clubs that ranks the lowest in Net Local Revenue for 1996 shall be
paid an additional $1.4 Million on February 1, 1998. Such payments shall be
funded by Luxury Tax proceeds for the 1997 Contract Year pursuant to Article
XXIII, to the extent that sufficient proceeds are available for this purpose
after up to $10 Million of those proceeds have been used as described in
Section C(2) below. If the remaining 1997 Luxury Tax proceeds are
insufficient to fund completely all such payments, then the balance of such
payments shall be funded by any superstation payments attributed to 1994 and
1995 that may remain following the operation of Section C(1)(a) above and
Section C(2) below. If the foregoing sources are insufficient to fund all
such payments, then each such payment shall be reduced proportionately as a
result of the insufficiency.
(c) The five (5) American League Clubs described in subparagraph (b) above
shall, upon the recommendation of the Administrator after consultation with
the Association, be allowed to take advances against the payments described
in subparagraph (b) above (or some portion thereof) in June 1997. In making a
recommendation to allow advances to be taken in June 1997, the
-91-
102
Administrator shall consider the following: (i) the first 1997 Preliminary
Actual Club Payroll Compilation provided to the Association pursuant to
Article XXIII F(1)(b), (ii) the amount of Luxury Tax likely to result
therefrom, (iii) the amount of superstation payments attributed to 1994 and
1995 remaining after the operation of subparagraph (a) above, and (iv) the
amount of 1997 Luxury Tax proceeds and superstation payments attributed to
1994 and 1995 that are likely to be needed to fund the Shortfall created by
the operation of Section C(2) below. If the Administrator recommends that
advances be allowed in June 1997, those advances shall be funded by
superstation payments attributed to 1994 and 1995; provided, however, that if
it is ultimately determined that there are 1997 Luxury Tax proceeds available
to fund the payments to the five American League Clubs, or any portion
thereof, appropriate amounts will be reimbursed to the Central Fund to
replace the superstation payments attributed to 1994 and 1995 that were used
to fund the advances.
(2) 1997.
For 1997, the Hybrid Plan will be implemented on a 60% basis: Participating
Clubs will pay or receive (as the case may be) 60% of the net payment or net
receipt produced by the Hybrid Plan at full (100%) implementation. Any
Shortfall produced shall be funded, up to no more than $10 Million, by Luxury
Tax proceeds for the 1997 Contract Year pursuant to Article XXIII. Any excess
Shortfall over $10 Million shall be funded only by any superstation payments
attributed to 1994 and 1995 remaining after the operation of Section C(1)(a)
above. If the foregoing sources are insufficient to fund completely the
Shortfall, then those Participating Clubs that benefit from the Straight Pool
Plan as opposed to the Split Pool Plan shall receive only a portion of that
benefit. The portion of the benefit to be received by a Participating Club in
such event shall be calculated by multiplying the total amount available to
fund the Shortfall by a fraction, the numerator of which is the value of the
benefit the Participating Club would have received in 1997 by operation of
the Straight Pool Plan as opposed to the Split Pool Plan and the denominator
of which is the total value of the benefit that would have been received in
1997 by all Participating Clubs that would have achieved a more favorable
result by operation of the Straight Pool Plan as opposed to the Split Pool
Plan.
(3) 1998.
(a) For 1998, the Split Pool Plan will be implemented on an 80% basis:
Participating Clubs will pay or receive (as the case may
-92-
103
be) 80% of the net payment or net receipt produced by the Split Pool Plan at
full (100%) implementation.
(b) In addition to the net payments or net receipts produced by operation
of subparagraph (a) above, Supplemental Pool Payments shall be payable in
December 1998 to all Participating Clubs that, had the Hybrid Plan been in
effect for 1998 on an 80% basis, would have been assigned the more favorable
result under the Straight Pool Plan, as opposed to the Split Pool Plan (see
Section A(10) above). Supplemental Pool Payments shall be distributed as
follows:
(i) Nine Million Dollars, to be distributed to the Participating Clubs
described above in this subparagraph (b). The amount distributed to each
such Participating Club shall be calculated by multiplying $9 Million by a
fraction, the numerator of which is the value of the benefit the
Participating Club would have received in 1998 by operation of the Straight
Pool Plan as opposed to the Split Pool Plan and the denominator of which is
the total value of the benefit that would have been received in 1998 by all
Participating Clubs that would have achieved a more favorable result by
operation of the Straight Pool Plan as opposed to the Split Pool Plan.
(ii) Four and One-Half Million Dollars, to be distributed among each
Participating Club described above in this sub-paragraph (b) that is
actually a Payor Club for 1998 pursuant to subparagraph (a) above. To
determine the amount due to individual Clubs, the eligible Clubs shall be
ranked, from highest to lowest, based on each Club's percentage increase in
Net Local Revenue, to be calculated by dividing each Club's Net Local
Revenue for 1998 by its Net Local Revenue for 1997. Based on that ranking,
each eligible Club will take the applicable amount of the funds available
under this subparagraph (ii) in accordance with the schedule set out in
Attachment 16.
(iii) Four and One-Half Million Dollars, to be distributed among each
Participating Club described above in this sub-paragraph (b) that is
actually a Payee Club for 1998 pursuant to subparagraph (a) above. To
determine the amount due to individual Clubs, the eligible Clubs shall be
ranked, from highest to lowest, based on each Club's percentage increase in
Net Local Revenue, to be calculated by dividing each Club's Net Local
Revenue for 1998 by its Net Local Revenue for 1997. Based on that ranking,
each eligible Club will take the applicable amount of the funds available
under this subparagraph (iii) in accordance with the schedule set out in
Attachment 16.
-93-
104
(4) 1999.
(a) For 1999, the Split Pool Plan will be implemented on an 85% basis:
Participating Clubs will pay or receive (as the case may be) 85% of the net
payment or net receipt produced by the Split Pool Plan at full (100%)
implementation.
(b) In addition to the net payments or net receipts produced by operation
of subparagraph (a) above, Supplemental Pool Payments shall be payable in
December 1999 to all Participating Clubs that, had the Hybrid Plan been in
effect for 1999 on an 85% basis, would have been assigned the more favorable
result under the Straight Pool Plan, as opposed to the Split Pool Plan (see
Section A(10) above). Supplemental Pool Payments shall be distributed as
follows:
(i) Nine Million Dollars, to be distributed to the Participating Clubs
described above in this subparagraph (b). The amount distributed to each
such Participating Club shall be calculated by multiplying $9 Million by a
fraction, the numerator of which is the value of the benefit the
Participating Club would have received in 1999 by operation of the Straight
Pool Plan as opposed to the Split Pool Plan and the denominator of which is
the total value of the benefit that would have been received in 1999 by all
Participating Clubs that would have achieved a more favorable result by
operation of the Straight Pool Plan as opposed to the Split Pool Plan.
(ii) Four and One-Half Million Dollars, to be distributed among each
Participating Club described above in this sub-paragraph (b) that is
actually a Payor Club for 1999 pursuant to subparagraph (a) above. To
determine the amount due to individual Clubs, the eligible Clubs shall be
ranked, from highest to lowest, based on each Club's percentage increase in
Net Local Revenue, to be calculated by dividing each Club's Net Local
Revenue for 1999 by its Net Local Revenue for 1998. Based on that ranking,
each eligible Club will take the applicable amount of the funds available
under this subparagraph (ii) in accordance with the schedule set out in
Attachment 16.
(iii) Four and One-Half Million Dollars, to be distributed among each
Participating Club described above in this sub-paragraph (b) that is
actually a Payee Club for 1999 pursuant to subparagraph (a) above. To
determine the amount due to individual Clubs, the eligible Clubs shall be
ranked, from highest to lowest, based on each Club's percentage increase in
Net Local Revenue, to be calculated by dividing each Club's Net
-94-
105
Local Revenue for 1999 by its Net Local Revenue for 1998. Based on that
ranking, each eligible Club will take the applicable amount of the funds
available under this subparagraph (iii) in accordance with the schedule set
out in Attachment 16.
(5) 2000.
For 2000, the Split Pool Plan will be implemented on a 100% basis:
Participating Clubs will pay or receive (as the case may be) 100% of the net
payment or net receipt produced at full (100%) implementation.
(6) 2001 (If Association Option Exercised).
For 2001, if the Association exercises its option to extend this Agreement
under Article XXVII, the Split Pool Plan will be implemented on a 100% basis:
Participating Clubs will pay or receive (as the case may be) 100% of the net
payment or net receipt produced by the Split Pool Plan at full (100%)
implementation.
D. ADMINISTRATION
(l) Responsibility.
The administration of the revenue sharing plan under this Article XXV shall
be the responsibility of the Administrator in consultation with the
Association. The Administrator shall be a Committee of Clubs and/or
representatives designated by the Major League Baseball Executive Council.
The Administrator shall be designated within 30 days following the execution
of this Agreement.
(2) Duties of Administrator.
The Administrator shall have the following duties and responsibilities, to
be performed in consultation with the Association:
(a) CALCULATIONS AND DETERMINATION OF PAYMENT SCHEDULE. The
Administrator shall calculate and determine the timing of payment and
distribution of net payments and net receipts by (or to) Participating
Clubs. In this regard, the Administrator is authorized to require estimated
partial payments and distributions during the course of a revenue sharing
year and to assess reasonable penalties for intentionally inaccurate
estimates by Clubs. The schedule for retroactive payments relating to 1996
shall be in accordance with Section V of the Strike Settlement. Beginning
with the payments relating to 1997, unless and until
-95-
106
altered by the Administrator in consultation with the Association, the
Clubs shall make payments to the Administrator in each year of the revenue
sharing plan under the following schedule:
-----------------------------------------------------------------------
REPORTING PAYMENT DISTRIBUTION
DATE DATE DATE AMOUNT OF PAYMENT
--------------------------------------------------------------------------------------------------
Payment 1 May 15 May 25 June 1 33% of Estimated
Annual Net Payment
--------------------------------------------------------------------------------------------------
Payment 2 July 15 July 25 August 1 66% of Estimated
Annual Net Payment
Less: Payment 1
--------------------------------------------------------------------------------------------------
Payment 3 September 25 September 30 October 1 100% of Estimated
Annual Net Payment
Less: Payments 1 and 2
--------------------------------------------------------------------------------------------------
Payment 4 November 15 November 25 December 1 Post-Season True-Up,
Unaudited
--------------------------------------------------------------------------------------------------
Payment 5 March 31 June 7 June 15 Final Determination of
Annual Net Payment
Based on Audited
Results
--------------------------------------------------------------------------------------------------
(i) The "Reporting Date" shall be the date on which the Clubs
submit their most recent estimate of Net Local Revenues.
(ii) The "Payment Date" shall be the date on which the Payor Clubs
pay estimated amounts to the Administrator based on an updated revenue
sharing calculation provided to the Clubs.
(iii) The "Distribution Date" shall be the date on which the
Administrator distributes estimated amounts to Payee Clubs based on the
updated revenue sharing calculation.
In determining whether to alter the foregoing schedule, the
Administrator shall accord substantial weight to the cash flow needs under
this Agreement of the industry as a whole, as opposed to any specific Club.
The Administrator shall also provide the Association with notice of any
inter-Club disputes relating to the payment and distribution of net
payments and receipts and the resolution of said disputes.
-96-
107
(b) REVIEW OF ACCOUNTING AND REPORTING PRACTICES. The Administrator
shall review the accounting and reporting practices of the Clubs, as
reflected in Club financial information submitted in connection with the
FIQs, audited financial statements, and any SIQs or supplemental
information required by the Administrator to be submitted by Clubs. The
Administrator shall also conduct regular full independent audits of the
Clubs and of particular significant transactions (E.G., related party
transactions). In this regard, the Reports described in Section B(3)(b)
recommend that all Clubs should undergo a full compliance audit in the
first revenue sharing year and that thereafter, each Club should undergo a
full compliance audit at least every other revenue sharing year.
(Utilization by the Administrator of the recommendations contained in the
Reports is subject to consultation with the Association and the other
procedures set out in this Section D.) The Administrator shall advise the
Association in advance of the scheduling of all such audits. The
Administrator is also authorized to make appropriate changes, in
furtherance of the objectives described below in Section D(2)(c), in the
definitions, accounting conventions, policies or practices reflected in the
FIQ, subject to prior notice to, and consultation with, the Association.
The Administrator is also authorized to require more detailed Club
submission of line items as set out in the FIQ.
(c) OBJECTIVES. In performing functions under this paragraph (2), the
objectives of the Administrator are: (i) to achieve uniformity and
consistency in reporting among Clubs;
(ii) to achieve uniformity and consistency in reporting from
revenue sharing year to revenue sharing year;
(iii) to accord fair treatment in the calculation of net payments
and net receipts;
(iv) to be fair, impartial and objective in assessing and
evaluating new issues that arise in the operation of the plan; and
(v) to remain faithful to the agreement of the Parties reflected in
this Article XXV.
(3) Specific Prohibition.
In performing duties and responsibilities in the administration of the
revenue sharing plan, the Administrator shall not materi-
-97-
108
ally affect the agreement of the Parties as reflected in this Article,
including, but not limited to:
(a) the industry-wide net transfer of Net Local Revenue among
Participating Clubs; or
(b) the amounts of contributions made by individual Payor Clubs and the
amounts of payments received by individual Payee Clubs; or
(c) the distribution of Supplemental Pool Payments.
E. PARTICIPATION OF THE ASSOCIATION
(1) Consultation.
(a) Within 30 days following execution of this Agreement, the Administrator
shall promptly notify and consult with the Association in advance with regard
to proposed actions the Administrator intends to take pursuant to paragraphs
(1), (2)(a) and (2)(b) of Section D above in connection with the
administration of the revenue sharing plan. The Administrator and the
Association shall thereafter meet regularly on a monthly basis to facilitate
administration of the plan. Further, the Administrator shall regularly notify
and consult with the Association with respect to any proposed changes
described in Section D(2)(b), or as to any other proposed changes in the
administration of the plan, and with respect to preliminary and final
estimated partial payment calculations, and preliminary and final
calculations regarding net payments or net receipts due under the plan.
(b) Failure by the Association to challenge at the consultation stage with
the Administrator or under the Grievance Procedure in Article XI any such
proposed actions, changes, or preliminary estimated partial payment
calculations or preliminary calculations regarding net payments or net
receipts described above in Section E(1)(a) shall not preclude the
Association from challenging under the Grievance Procedure in Article XI any
action taken, changes made, or final estimated partial payment calculations
or final calculations regarding net payments or net receipts made by the
Administrator in connection with the administration of the plan. Further,
nothing in this Article, including, but not limited to, the consultation
rights accorded the Association, is intended to limit either the substantive
rights of the Association under this Article or the application of the
Grievance Procedure in Article XI as to any complaint involving the existence
or interpretation of, or compliance with, this Article or any provision
herein.
-98-
109
(c) The filing of a Grievance under Article XI by the Association shall not
preclude the Administrator from calculating, collecting or redistributing
estimated partial payments or receipts or final net payments or receipts in
accordance with this Article, unless the Chairman of the Arbitration Panel,
upon application by the Association, provides otherwise. Unless the Chairman
provides otherwise, any adjustments to the calculation, collection or
redistribution of estimated partial payments or receipts or of final net
payments or receipts pursuant to this Article necessitated by the resolution
of an Association Grievance shall be made by the Administrator once the
Grievance is finally resolved.
(2) Right to Information.
The Administrator shall provide to the Association, upon request, any
relevant information necessary to the Association's performance of its
functions under this Article as collective bargaining representative. More
specifically, and not by way of limitation, the Administrator shall promptly
provide to the Association on a regular basis for each revenue sharing year
of this Agreement, copies of the following documents (in hard copy and/or
computer readable form, whichever is available) within 10 days following
preparation by or receipt by the Administrator of such data, except that
copies of documents responsive to subparagraphs (e), (j) and (l) shall be
provided within 30 days following preparation of such data by the Clubs (or
the Administrator), as the case may be:
(a) the form FIQ to be submitted by Clubs, together with any form SIQ
or other forms requiring the submission of supplemental information to the
Administrator by Clubs;
(b) any proposed changes in the form FIQ, SIQ or other forms to be
submitted to the Administrator by the Clubs, together with any explanatory
reports, if any, regarding such proposed changes;
(c) completed FIQs, SIQs or other supplemental information forms
submitted to the Administrator by each Club;
(d) audited financial statements submitted by each Club;
(e) summaries of local media contracts (and/or of any other individual
Club contracts) submitted by each Club to, or maintained under the
supervision of, the Office of the Commissioner (or the Administrator);
(f) any industry-wide compilation of revenue and expense data, whether
broken out by individual Club or groups of Clubs;
-99-
110
(g) any completed forms submitted by the Clubs to the Administrator in
connection with the preparation of estimates of net payments or net
receipts;
(h) any preliminary estimated partial payment calculations or
preliminary calculations by the Administrator of net payments and net
receipts due under the plan;
(i) any document prepared by or on behalf of the Administrator in
connection with a full or partial independent audit of any Club conducted
by or on behalf of the Administrator as described in Section D(2)(b) and
Section E(3)(a) of this Article;
(j) upon specific request by the Association, any Club document(s)
examined or required to be examined by or on behalf of the Administrator in
connection with a full or partial independent audit of any Club conducted
by or on behalf of the Administrator as described in Section D(2)(b) and
Section E(3)(a) of this Article;
(k) any final calculations by the Administrator of estimated partial
payments, net payments and net receipts due under the plan; and
(l) upon specific request by the Association, a description of the
methodologies, assumptions and procedures used by the Administrator to
calculate and/or to reconcile items reported in Club FIQs and Club audited
financial statements.
(3) Right to Audit.
(a) The Association shall have the right, at any time during this
Agreement, to require the Administrator to conduct a full or partial
independent audit of any Club for a given revenue sharing year or of any
particular transaction, regardless of whether such an audit would have been
required by the Administrator under the procedures referred to in Section
D(2)(b) above. Further, should the Association require such an audit, the
Association shall also have the right to require the Administrator to examine
specified transactions, revenue and/or expense items, and/or to require
reconciliation of the Club's FIQ and audited financial statements in
specified areas. The Association also shall have the right to require the
Administrator to examine specified Club document(s). The Administrator shall
conduct the audit within a reasonable period of time from the date of a
written demand therefor by the Association. To the extent practicable, such
audit will be con-
-100-
111
ducted under the same procedures and under the same time schedule as other
audits conducted by the Administrator in accordance with Section D(2)(b)
above. All expenses for such audits shall be borne solely by the
Administrator.
(b) Upon a showing of good cause, the Association shall have the right to
conduct its own full or partial independent audit of any such Club or
transaction, upon written notice to the Administrator. The Administrator
shall promptly arrange the date for the Association's audit, to be conducted
within a reasonable period of time from the date of the Association's notice
pursuant to this subparagraph.
(c) Notwithstanding the provisions of Section D(2)(b), Section E(3)(a) and
Section E(3)(b) above, and without regard to whether the Administrator has
conducted an audit pursuant to Section D(2)(b) or Section E(3)(a) of any Club
(or Clubs), the Association, upon written notice to the Administrator, shall
have the right to conduct its own full or partial independent audit of six
(6) Clubs per year for each of the revenue sharing years, 1998, 1999 and
2000. Notwithstanding the foregoing, upon a showing of good cause, the
Association shall have the right to conduct its own full or partial
independent audit of more than six (6) Clubs for each of the revenue sharing
years, 1998, 1999 and 2000. The Administrator shall promptly arrange the date
for the Association's audit, to be conducted within a reasonable period of
time from the date of the Association's notice pursuant to this subparagraph.
(d) Any audits conducted by the Association pursuant to subparagraphs (b)
or (c) above, may be conducted by representatives of the Association's
choice, including accountant(s) employed on the Association's staff, so long
as such representatives are working under the supervision of a Certified
Public Accountant(s) of the Association's choice.
(e) The Association shall utilize the rights set forth in this paragraph
(3) in good faith and only in furtherance of its interest in ensuring
compliance with this Agreement. In no event will the Association conduct an
unreasonable number of its own audits for any revenue sharing year.
(4) Confidentiality.
Any financial information obtained by the Association from the Clubs (or
the Administrator) pursuant to this Article shall be subject to the
Confidentiality Agreement appended hereto in Attachment 17.
-101-
112
ARTICLE XXVI-THE INDUSTRY GROWTH FUND
A. OBJECTIVE AND PURPOSES
The Parties shall establish the Industry Growth Fund ("IGF") no later than May
1, 1997. The objective of IGF is to promote the growth of baseball in the United
States and Canada, as well as throughout the world. To this end, IGF will be
operated jointly by Players and Clubs in furtherance of the following purposes:
(1) to enhance fan interest in the game;
(2) to increase baseball's popularity; and
(3) to ensure industry growth into the 21st Century.
B. JOINT ACTIVITIES
In furtherance of the purposes described above in Section A, the Parties shall
make funds available to IGF for joint activities supervised by the Association
and the Clubs in the following areas:
(1) licensing, promotional, advertising and marketing projects;
(2) international development, including Player tours, licensing, media
relations and support for baseball federations throughout the world;
(3) development and use of new media technology;
(4) community service activities;
(5) enhancement in popularity and revenue growth among those Clubs that are
or have been Payee Clubs under Article XXV during the term of this Agreement,
with particular attention to the interests of cities and communities in the
retention of Major League Clubs (provided that funds are distributed based on
investment criteria and not as automatic supplements to revenue sharing
pursuant to Article XXV); and
(6) any other joint activities deemed by the Parties to be in furtherance
of the purposes of IGF.
C. ADMINISTRATION
(1) Board of Directors.
(a) Within 30 days of the execution of this Agreement, the Parties shall
appoint a Board of Directors of IGF ("the IGF Board"), consisting of seven
members. The Executive Director of the Asso-
-102-
113
ciation and the Chief Labor Negotiator of the PRC, or their designees, shall
serve as Co-Chairs of the IGF Board. The Association and the PRC, on behalf
of the Clubs, shall each appoint two additional members ("Association
Members" and "Club Members", respectively). One additional member
("Independent Member") shall be appointed jointly by the PRC, on behalf of
the Clubs, and the Association. The Independent Member shall not be a current
employee, vendor, contractor, partner, member of, or consultant to, any Club,
the PRC, the Association or any other centrally-operated Baseball entity. The
IGF Board shall consist of the two Co-Chairs, the two Association Members,
the two Club Members and the one Independent Member.
(b) It shall be the responsibility of the IGF Board to oversee the
operation and activities of IGF. The IGF Board shall meet in person at least
three times each year. The IGF Board may also hold conference calls and
receive reports and other information about the activities and operation of
IGF.
(2) Co-Operating Officers.
Within 30 days from the date of execution of this Agreement, the
Association and the PRC, on behalf of the Clubs, shall each appoint one
Co-Operating Officer for IGF. The responsibilities of the Co-Operating
Officers shall be:
(a) to work together in the operation and administration of IGF on a
day-to-day basis;
(b) to formulate, plan and agree upon joint activities (including
budgets, contractors and/or vendors therefor) as described in Section B
above;
(c) to consult with the IGF Board regarding joint activities (including
budgets, contractors and/or vendors therefor) as described in Section B
above and as agreed upon by the Co-Operating Officers; and
(d) to otherwise make regular reports to the IGF Board about current
and future IGF activities.
D. DISPUTE RESOLUTION
(1) Disputes Concerning Joint Activities.
Any dispute concerning a decision whether or not to participate in a joint
activity, including disputes over budgets, the selection of
-103-
114
contractors and/or vendors therefor, shall be resolved by the Co-Chairs of
the IGF Board and, absent resolution by them, such joint activity shall not
be undertaken. Decisions by the Co-Chairs with respect to this type of
dispute shall be final and binding upon the Parties.
(2) Disputes Subject to Resolution by the Independent Member.
Any dispute regarding the day-to-day operations of IGF (other than the
disputes described in paragraph (1) above) shall be subject to resolution by
the Independent Member. Either of the Co-Operating Officers shall have the
right to bring such a dispute to the attention of the Independent Member by
written notice within seven (7) business days from the date such dispute
arises, with a copy simultaneously to the other Co-Operating Officer. The
Independent Member, within five (5) business days from receipt of such
written notice, shall render a decision resolving the dispute. In reaching
the decision, the Independent Member shall accord paramount consideration to
the objective and purposes of IGF, as described in Section A above, as well
as to the funding available to IGF, as described in Section E below. The
Independent Member's decision resolving the dispute shall be in writing with
a brief explanation of the reasons therefor. The decision of the Independent
Member shall be final and binding upon the Parties.
(3) Other Disputes.
Except for disputes subject to paragraph (1) or (2) above, nothing in this
Article XXVI is intended to affect either the substantive rights of the
Parties under this Article XXVI or the application of the Grievance Procedure
in Article XI to any other complaint involving the existence or
interpretation of, or compliance with this Article or any provision herein.
E. FUNDING
(1) Initial Funding.
Until such time as there is adequate funding for IGF activities as a result
of the operation of paragraphs (2) through (4) below, the Clubs and the
Association shall each make available to IGF up to $3 million for use in the
activities described in Section B above. Funding under this paragraph (1)
shall be made available by the Clubs and the Association in equal amounts
based upon a request by the Co-Operating Officers.
-104-
115
(2) Luxury Tax Proceeds.
All Luxury Tax proceeds remaining after the operation of Article XXV,
paragraphs C(2) and C(1)(b) and Article XXIII(H) (including any interest
collected pursuant to Article XXIII(B)(6)) shall be made available to IGF for
use in the activities described in Section B above.
(3) Payroll Tax Proceeds.
All Payroll Tax proceeds remaining after deduction of the amounts called
for in the Strike Settlement, the operation of Article XXV(C)(3)(b) and
C(4)(b) and the operation of Article XXIV(E) shall be made available to IGF
for use in the activities described in Section B above.
(4) Additional Voluntary Contributions.
In addition to the funding otherwise called for by this Section E, either
the Association, in its discretion, or the Clubs, in their discretion, may
contribute additional amounts to IGF for use in the activities described in
Section B above.
F. OPTION EXERCISE
Notwithstanding any other provision of this Article XXVI, and only if the
Association exercises its option under Article XXVII to extend this Agreement,
the following provisions shall apply with respect to 50 percent of the Luxury
Tax proceeds available in IGF as of the date the Association exercises the
option.
(1) The Club Members, in consultation with the other Members of the IGF
Board, shall select activities of the type described in Section B(5) above
and such activities shall be funded with the Luxury Tax proceeds subject to
this Section F.
(2) The consultation requirement in paragraph (1) above shall not prevent
the funding of any activity selected by the Club Members so long as the
activity is of the type described in Section B(5) above.
G. CONTINUATION OF IGF AFTER THE TERMINATION OF THE BASIC AGREEMENT
Subject to Section F above, if, as of the termination of this Agreement, there
are funds available for use by IGF as a result of the operation of Section E
above, for activities described in Section B above, then notwithstanding
termination of this Agreement and any rights of the Clubs under the National
Labor Relations Act, IGF
-105-
116
shall remain in existence and in operation as if this Agreement had not
terminated, until such funds are exhausted through use in activities described
in Section B above, or until the Association and the PRC agree to terminate
operation of IGF, whichever is earlier.
ARTICLE XXVII-TERM
A. DURATION OF THE CONTRACT
This Agreement shall terminate on October 31, 2000 or the day following the last
game of the 2000 World Series, whichever is later; provided, however, that if
the legislation described in Article XXVIII is not enacted into law on or before
December 31, 1998, this Agreement shall terminate on December 31, 2000.
B. ASSOCIATION OPTION TO EXTEND THROUGH THE 2001 SEASON
Notwithstanding Section A above, the Association has the unilateral option to
extend this Agreement. If this option is exercised, this Agreement shall
terminate on October 31, 2001 (or the day after the last game of the 2001 World
Series, whichever is later). The Association may exercise the option by giving
the PRC written notice. Such notice shall be given no later than August 31,
2000; except that if the scheduled termination date is December 31, 2000, then
the notice that the option is being exercised shall be given no later than
October 31, 2000 (or the day after the last game of the 2000 World Series,
whichever is later).
C. EVENTS AFFECTED BY THE OPTION TO EXTEND
(1) Division Series Pool.
For the 1997 through 2000 Division Series, the figure arrived at by taking
the difference between the amount that represents 80% of the total gate
receipts from the first 3 games (4 if the Division Series is expanded to the
best of 7 games) of each Division Series and the amount that represents 60%
of such total gate receipts ("the Annual Option Amount") shall be paid to an
account maintained by the Commissioner's Office and redistributed to all
Clubs pro rata on an annual basis.
(2) Creation of the Fictional Option Pool Account.
The Clubs shall maintain a fictional account based on the assumption that,
for each of the years 1997-2000, the Annual Option Amount was placed in an
account within 30 days after the
-106-
117
end of the World Series and the entire balance in said account earned
interest, compounded annually, at the medium quality corporate bond rate as
published in the Wall Street Journal on the November 30 following each World
Series. The amount that would have been in this fictional account on the
later of the 31st day after the end of the 2000 World Series or December 1,
2000 shall be referred to as the "Option Pool Amount."
(3) Events That Occur if the Association Exercises its Option.
If the Association exercises its option to extend, then the Association
shall make a payment to an account maintained by the Commissioner's Office of
Two Million Dollars ($2,000,000) on or before December 31, 2000 and that
amount shall be distributed to all Clubs pro rata. In addition, the Clubs
will no longer be obligated to maintain the fictional account referred to in
paragraph (2) above.
(4) Events That Occur if the Association Does Not Exercise its Option.
If the Association does not exercise its option to extend, then funds equal
to the Option Pool Amount shall be distributed in accordance with the
Association's instructions, within 50 days after the end of the 2000 World
Series. The Association will provide such instructions within 35 days after
the end of the 2000 World Series.
ARTICLE XXVIII-ANTITRUST
The Clubs and the Association will jointly request and cooperate in lobbying the
Congress to pass a law that will clarify that Major League Baseball Players are
covered under the antitrust laws (I.E., that Major League Players will have the
same rights under the antitrust laws as do other professional athletes, E.G.,
football and basketball players), along with a provision that makes it clear
that the passage of that ▇▇▇▇ does not change the application of the antitrust
laws in any other context or with respect to any other person or entity. If such
a law is not enacted by December 31, 1998 (the end of the next Congress), then
this Agreement shall terminate on December 31, 2000 (unless the Association
exercises its option to extend this Agreement as set forth in Article XXVII).
ARTICLE XXIX-COMPREHENSIVE AGREEMENT
This Agreement represents a complete, full and final understanding on all
bargainable subjects covering Players during the term of this
-107-
118
Agreement, except such matters as may become bargainable pursuant to the
reopener provisions of this Agreement or under the terms of the following
agreements:
(a) The Major League Baseball Players Benefit Plan;
(b) The Agreement Re Major League Baseball Players Benefit Plan; and
(c) The Agreement regarding dues check-off.
All rights to bargain with one another concerning any subject whatsoever
regarding Players for the duration of this Agreement are expressly waived by the
Parties, except to the extent permitted in said Agreements and in the reopener
provisions of this Agreement. Should this Agreement be reopened pursuant to the
provisions hereof, each of the Parties shall have the right to take concerted
action in support of its position.
It is further agreed by the Parties that during the term of this Agreement they
will use their best efforts to ensure that all terms and conditions of all
Uniform Player's Contracts signed by individual Players will be carried out in
full.
ARTICLE XXX-EXECUTION OF THIS AGREEMENT
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, and such counterparts shall constitute but one and
the same instrument.
This Agreement is executed by the undersigned acting solely in their respective
representative capacities and not in their individual capacities.
IN WITNESS WHEREOF, the Parties have hereunto subscribed their names as of the
day and year first above written.
-108-
119
MAJOR LEAGUE
BASEBALL PLAYERS
CLUBS ASSOCIATION
ATLANTA NATIONAL LEAGUE ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
BASEBALL CLUB, INC. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
CHICAGO NATIONAL LEAGUE ▇▇▇▇▇ ▇▇▇▇▇▇
BALL CLUB, INC. ▇▇▇▇▇ ▇▇▇▇
THE CINCINNATI REDS ▇▇▇ ▇▇▇▇▇
COLORADO ROCKIES BASEBALL ▇▇▇▇ ▇▇▇▇▇
CLUB, LTD. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
ENTERPRISES, L.P. ▇▇ ▇▇▇▇▇▇
HOUSTON ▇▇▇▇▇▇ CO., INC. ▇▇ ▇▇▇▇▇▇
LOS ANGELES DODGERS, INC. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
FLORIDA MARLINS BASEBALL ▇▇▇▇▇▇▇ ▇▇▇
CLUB, LTD. ▇▇▇▇▇ ▇▇▇▇▇
MONTREAL BASEBALL AND ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
COMPANY, LTD. ▇▇▇ ▇▇▇▇▇▇
THE PHILLIES ▇▇▇▇ ▇▇▇▇▇▇
PITTSBURGH ASSOCIATES ▇.▇. ▇▇▇▇▇▇▇▇▇
ST. LOUIS CARDINALS, L.P. ▇▇▇ ▇▇▇▇▇
PADRES, L.P. B.J. Surhoff
SAN FRANCISCO BASEBALL ▇▇▇▇ ▇▇▇▇▇
ASSOCIATES, L.P. ▇▇▇ ▇▇▇▇▇▇
AZPB LIMITED PARTNERSHIP
BALTIMORE ORIOLES LIMITED
PARTNERSHIP
THE BOSTON RED SOX
BASEBALL CLUB
CALIFORNIA ANGELS, L.P.
CHICAGO WHITE SOX, LTD.
CLEVELAND INDIANS BASEBALL
COMPANY, LIMITED PARTNERSHIP
DETROIT TIGERS, INC.
KANSAS CITY ROYALS BASEBALL CORP.
MILWAUKEE BREWERS BASEBALL
CLUB, LIMITED PARTNERSHIP MINNESOTA TWINS PARTNERSHIP THE NEW YORK YANKEES
PARTNERSHIP ATHLETICS INVESTMENT GROUP, LLC THE BASEBALL CLUB OF SEATTLE, L.P.
TEXAS RANGERS BASEBALL PARTNERS TORONTO BLUE JAYS BASEBALL CLUB TAMPA BAY DEVIL
RAYS, LTD.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Major League Baseball ▇▇▇▇▇▇ ▇. ▇▇▇▇,
Player Relations Committee Executive Director
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Labor Negotiator and General Counsel
-109-