TERMS OF THE NEW BASEBALL CONTRACT

Here are the terms of the collective agreement reached Wednesday between major league baseball owners and the Major League Players Assn. Agreement to run five years through the 1989 season. Players agreed to yield to owners’ demand that players wait three years, rather than two, before becoming eligible for salary arbitration. This becomes effective 1987 and involves no active players. Owners had insisted on this concession as a way of to stall the rise in player salaries. Salaries have increased 800% since 1974. Owners gave in on their demand for a limitation on the amount of salary that can be awarded in arbitration. They had been asking for a cap which would limit the arbitration award to no more than twice a player’s previous year’s salary. Owners agreed to double their contribution to the players’ pension plan, raising it from $15.5 million per year to an average of $32.6 million per year. Players had demanded $60 million. The free agent re-entry draft, which began in 1976 and led to several exorbitant contracts, will be abolished. Professional compensation for free agents is gone. Compensation for free agents will now be amateur draft picks. Minimum annual salary for major leaguers is increased from $40,000 to $60,000. Minor leaguers will receive a minimum of $20,000 annually. The agreement also includes a new requirement that deferred salaries be funded upfront. This had become an issue of concern to players because of the clubs’ weakened financial status.