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MLBPA: 'Milestone' and 'personal services' contracts no longer allowed

By Matt Snyder | Baseball Writer


You might recall that Albert Pujols has a 10-year, $10 million "personal services" contract with the Angels once he retires. You might also recall that he could be paid up to $10 million in marketing bonuses should he break Barry Bonds' all-time home run record. Moving forward, such inclusions in contracts will no longer be allowed, an MLBPA representative told ESPN.com.

"Both clauses raise questions under the Basic Agreement, and both parties felt they should not be a subject of individual negotiations," MLBPA head Michael Weiner told ESPN.com -- which also noted the Nationals' extension of Ryan Zimmerman contained a personal-services clause as well.

Reportedly, MLB and MLBPA started discussing the elimination of these types of inclusions in the aftermath of the Pujols and Zimmerman contracts.

Why is this an issue? Well, ESPN.com reports that MLB is trying to close loopholes in which teams could sign high-salaried players with colorful language in the contract that allows them to avoid paying the luxury tax. Bonuses and "personal service" contracts are not included in payroll calculations because they aren't considered "guaranteed money," therefore it is a loophole. So this new structure closes that loophole.

To reiterate, the rule is reportedly only going to be moving forward, so all current contracts will remain intact.

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