In accordance with the 1981 Strike Settlement Agreement, clubs that lose free agents without appeal receive professional players in compensation as well as an amateur draft pick. A pool of players is formed to compensate teams that lose free agents. No more than five teams can claim exclusion status for a period of three years, unless they select or sign the Free Agent Type A. Other clubs can protect 24 (if they have lost a Type A) or 26 players in their organizations. No team can lose more than one pool player each year. A wage-limitation system could impose a minimum wage that would provide baseball versions of middle-class jobs for middle-class jobs, but why force small teams in the market to increase their pay slips? The Tampa Bay Rays made the playoffs with the lowest paycheck in the major leagues. All of these rules are negotiated and contained in a collective agreement. Because of collective bargaining, regulation is immune from review under Section 1 of the Sherman Antitrust Act. This is important for MLB. While MLB enjoys a historic exemption from federal agreement law, the exception was limited by the Curt Flood Act of 1998. It no longer protects the MLB from controlling the removal of major league players` salaries. To be clear, the players` union has no intention of proposing a salary cap, let alone approving, as both sides prepare to negotiate before the current collective bargaining agreement expires after the 2021 season. Term Edition: 1970 – December 31, 1972.

The new basic agreement applies to the 1970, 1971 and 1972 seasons. All provisions, including new payments for spring training, are retroactive to early 1970. Minimum wage: the minimum wage rises to US$12,000 for 1970, US$12,750 for 1971 and US$13,500 for 1972. Reserve Clause: The issue of the reserve clause is filed until the Curt Floods cartel action is settled by the courts. Once the flood deal is over, the problem can be reopened for negotiations between seasons. Arbitration: Arbitration is amended with an impartial arbitrator “nuts and bolts” of work claims that do not include “integrity of the game” issues. The Commissioner retains his role as the last arbitrator after a formal hearing in cases involving “integrity” or “public confidence” in the game. The Commissioner had previously been the court of last resort to resolve virtually all differences. Wage reduction: the maximum salary reduction remains 20 per cent compared to the previous year`s salary. The new contract adds an additional requirement: no player can reduce his salary by more than 30 percent in two years. Severance Pay: The agreement expands the number of players eligible for severance pay, players dismissed during spring training receiving 30 days` salary (one first), players who were laid off after opening day and who receive 60 days` salary (one third of their salary) and players made redundant after May 15 will receive full salaries for the year. Right of representation: Owners recognize the right of players to hire an agent to negotiate a contract/salary with management.

Tender time: The deadline for teams to offer contracts for the following season for unsigned players is January 15. Winning Actions: Owners agree to increase the pool of money paid to players for their clubs` place in the table and after the season by US$250,000. (Players receive money for first, second or third place in their division as well as for the rise or victory of the World Series.) Operating Rules: The 1970 agreement prevents changes to baseball operational rules, such as exceptions, options or schedule, without prior negotiations and agreements with the union.