MLB Rumors: Luxury Tax Remains Biggest Obstacle To Agreeing On New CBA
Peter G. Aiken/USA TODAY Sports

MLB and the players’ association have essentially gone the distance, as the current collective bargaining agreement is set to expire at 12:01 a.m. ET on Thursday. If a new CBA is not agreed upon, it will halt all baseball activities.

The threat of a potential lockout was thought to be inhibiting free agency and other offseason transactions thus far. Beyond the deadline to get a new CBA in place, the next important date on the MLB calendar is Friday, when clubs must make decisions on whether to tender contracts to arbitration-eligible players.

The annual Winter Meetings are scheduled to begin days after. While the MLB and players’ association have held discussions on a new CBA over a prolonged stretch, those were said to have intensified in recent weeks.

A work stoppage at one point was said to be likely, though that’s since given way to a more optimistic sentiment around baseball.

According to ESPN’s Buster Olney, the primary issue at this point is centered around the luxury tax:

With both sides inching closer to an accord, hope is emerging that a new labor deal will be put in place.

The last big hurdle for MLB and the union in CBA talks is the competitive balance tax, sources said.

The luxury tax threshold is of particular interest to the Los Angeles Dodgers, who have led the Majors in payroll since 2014. Los Angeles has moved to lower that figure by relying on home-grown prospects.

Expected changes in a new CBA are active rosters expanding to 26 players, while September call-ups capping that number at 28 or 29, instead of 40. In addition, more travel and off-days are expected to be built into the regular season schedule, and the qualifying offer system is unlikely to remain part of free agency.

The current CBA has been in place since December 2011, while the last MLB lockout came in 1994.