AP source: MLB players, owners have verbally agreed to a new labor deal

IRVING, Texas (AP) — Negotiators for baseball players and owners have a verbal agreement on a five-year labor contract, a person familiar with the talks told The Associated Press on Wednesday night.

The person spoke on condition of anonymity because the sides were still putting the deal in writing. They hoped to have a signed memorandum of understanding later Wednesday.

The deal extends the sport’s labor peace to 26 years since 1995 and was reached about 3 1/2 hours before the expiration of the current collective bargaining agreement.

As part of the deal, the luxury tax threshold rises from $189 million to $195 million next year and to $210 million in 2021, the person said. There also will be a new penalty for signing certain free agents that could affect a team’s draft order.

Negotiators met through most of Tuesday night in an effort to increase momentum in the negotiations, which began during spring training. This is the third straight time the sides reached a new agreement before expiration, but in 2006 and 2011 the deal was struck weeks in advance.

Talks took place at a hotel outside Dallas where the players’ association held its annual executive board meeting. The luxury tax was among the final issues in talks that included topics such as compensation following the loss of free agents and management’s desire for an international draft.

While there were no games to be lost at this point, without a deal or an extension of the current collective bargaining agreement, baseball faced the prospect of a hold on transactions and other offseason business only hours after the Mets finalized their $110 million, four-year contract for Yoenis Cespedes.

Baseball had eight work stoppages from 1972-95, the last a 7 1/2-month strike in 1994-95 that led to the first cancellation of the World Series in 90 years. In 2002, an agreement was reached just before players were set to strike.