MLB’s new CBA and What It Means for the Indians: Part 1 – League Minimum Players

Last week, MLB’s owners and players agreed to a new collective bargaining agreement that is guaranteed to extend MLB’s labor peace for another five years.  Generally speaking, this is a good thing.  After watching the ugliness unfold in recent months around the NFL and NBA, I feel lucky that my favorite sport seems more or less immune to labor unrest these days.

That doesn’t mean, of course, that new CBA is all puppies and daffodils—especially for a team like the Indians.  This week I’m going to examine a few facets of the new deal and how they might impact the Indians.  I’ll warn you up front, it’s not pretty.  Most of the changes to the CBA work against smart teams who are trying to exploit loopholes in the system, and if we’re honest, that’s exactly what the Indians have been for the last 10 years.

Today, I thought we’d look at one of the most basic changes to the new agreement: the drastic increase in the league minimum salary.  The new CBA contains a raise for all players making the league minimum, from $414,000 in 2011 to $480,000 in 2012.  If that doesn’t sound drastic to you, it’s a 16% raise.  I, for one, would love a 16% raise.

But why does this affect the Indians more than any other team?  Well, there aren’t many teams in baseball who rely so heavily on the shallow end of the spending pool like the Indians do.  Here’s a list of every MLB team and their corresponding number of league minimum players (defined as making less than $500,000) as of the beginning of the 2011 season (numbers taken from Cot’s Baseball Contracts):

There is no team in the American League who had more league minimum players on their opening day 40-man roster than your Cleveland Indians.  And keep in mind that that list doesn’t include players like Travis Buck and Adam Everett, who were quickly replaced by league minimum guys.

Those 16 players combined to make about $6.97 million in 2011.  Tack on a 16% raise, and that figure jumps to about $8.1 million.  It’s not a huge jump, but it’s the sort of move that makes it harder for the Indians to maintain the financial advantage they’ve built by relying on young, pre-arbitration players.

To take a real world example, this weekend Terry Pluto suggested that the Indians might have another $3 million to spend this off-season (I assume this accounts for the arbitration raises the club has to hand out).  Based on the new CBA, you can cut that figure to $2 million.

And that’s really the point here: to most teams, an extra million bucks here or there is no big deal.  But when you’re the Indians and you have significantly limited revenue streams, a move like this can be the difference between adding a complementary player and holding pat.  Moves like these disproportionately affect the small market teams, and it’s hard to see how an increase like this will make things any easier on Antonetti and crew as they begin their ascent in the AL Central.

Next time, we’ll begin looking at the changes to the draft.  If you thought the increase in the league minimum was tough, you ain’t seen nothing yet.