- Associated Press - Friday, November 18, 2011

NEW YORK (AP) - Baseball players and owners have reached a tentative verbal agreement on a five-year labor contract and hope to have a signed deal by next week.

Negotiators reached an understanding when they met late Thursday at the InterContinental O’Hare in Rosemont, Ill., a person familiar with the negotiations told The Associated Press. The person spoke on condition of anonymity Friday because the agreement still was being drafted.

The sides hope to sign a memorandum of understanding in time to announce the agreement Monday or Tuesday. The last item to fall in place was the luxury tax on high payroll teams.

The agreement, the first for the union since Michael Weiner succeeded Donald Fehr as head last year, would replace the deal expiring Dec. 11 and would give baseball 21 years of labor peace since the 1994-95 strike.

Under the agreement, there will be a new restraint on the amount of money a team spends each year to sign selections from the amateur draft, with teams going over a threshold being penalized with a type of luxury tax.

In addition, there will be a separate restraint on the amount of money spent to sign international amateur free agents from nations such as the Dominican Republic, Venezuela and Cuba. There also will be a committee established to review the system for international signings, leaving open the possibility of a new system during the term of the deal.

Negotiators also worked to lower the percentage of major league free agents who require the highest form of draft pick compensation for the teams losing them.

As part of the deal, players and owners are agreeing to add an extra wild-card round to the playoffs. The extra round will be one game, winner take all.