New York (AFP) - Major League Baseball and its players association agreed on a new collective bargaining agreement on Wednesday, beating a midnight deadline to ensure five more years of labor peace.
The deal, which must still be ratified by owners and players, would extend through 2021, MLB said in a statement, adding that both parties "continue to draft the entirety of the agreement".
A five year deal would take the game to 26 years without a strike or lockout.
Baseball saw eight work stoppages in the prior 24 years, including the damaging 232-day players' strike that wiped out the 1994 World Series and delayed the start of the 1995 season.
After the sides met at a hotel outside Dallas, where the Major League Baseball Players Association held its annual executive board meeting, MLB announced that the tentative deal had been reached.
That was hours before the old agreement was to expire at midnight Eastern time (0500 GMT).
Despite the deadline, a lockout of players looked unlikely with both sides eager to continue negotiating and avoid any shutdown of a sport that generates $10 billion a year.
The deal reportedly raises the luxury tax threshold from $189 million to $195 million with further gradual increases.
Teams that spend well over the threshold on player salaries could see their tax rate jump to as high as 90 percent.
Also, clubs that sign a premium free agent will not have to yield a first-round draft pick to the team that lost the player. Clubs that exceed the luxury-tax threshold, though, would lose a pick later in the draft.
Other provisions of the new deal expected to be announced in coming weeks include changes to baseball's domestic violence policy and tougher sanctions for players who violate drug rules.