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Report: MLB Proposes $100 Million Salary Floor, Stiffer Luxury Taxes

Nick Selbe
SI.com

As the expiration of the current collective bargaining agreement between the league and the Players Association looms this offseason, Major League Baseball made its initial proposal to the MLBPA on Wednesday. The pitch reportedly included a new salary minimum of $100 million for each team, according to Evan Drellich and Ken Rosenthal of The Athletic. Coupled with that change would be a lowered luxury-tax threshold of $180 million, with a steeper penalty than teams currently pay now.

The current rules have three luxury-tax tiers that include steeper penalties the higher a team's payroll climbs. The first tier takes effect at $210 million, with a 20% tax. The new proposal would reportedly keep the three tiers intact, and add a fourth, lower tier that begins at $180 million with a 25% tax. The penalties would increase from there with each tier.

Though the details are not yet clear, money from teams that are taxed at the $180 million tier would be used to fund teams that spend below the $100 million minimum. There would also, however, presumably be some sort of penalty levied against the teams who fail to reach the $100 million threshold.

Per Cot's Contracts, seven teams started the year with 40-man roster payrolls below $100 million, which is the metric used for luxury tax purposes: the Pirates ($62.9 million), Cleveland ($63.2M), the Orioles ($76.5M), Brewers ($78.5M), Rays ($83.0M), Mariners ($92.3M) and Tigers ($97.8M).

Though further details are not yet known, Drellich and Rosenthal report that the reaction from the players to this proposal is not expected to be positive. It is expected players want luxury-tax thresholds to be raised, not lowered, to encourage teams to spend more money. Teams are extremely cautious about passing the luxury-tax threshold, treating it almost as if it were a salary cap. MLB is the only North American sport to not have a salary cap, something the players have historically been adamant against incorporating.

The players reportedly made an economic plan proposal in May that included an emphasis on getting more players to arbitration in fewer than three years of service time. Owners would presumably be against such changes. The current CBA is set to expire on Dec. 1.


https://www.si.com/mlb/2021/08/18/mlb-proposes-salary-floor-lower-luxury-tax-mlbpa

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What might make this work is that it pits the "Haves" vs the "Have Nots" on both sides of the negotiations. Owners of high revenue teams will resist, but the majority of the owners who don't have broadcast revenues like the Yankees, Mets, Cubs, Dodgers, and a few others will most likely approve. In the same vein, rank-and-file type players stand to benefit from a salary floor, while superstars will most likely have to settle for less than the kind of deals we've seen go to guys like Betts, Lindor, and others in the last couple years. Its almost a de facto salary cap. We'll see how the MLBPA spins it. My guess is they'll be against it, but I see it as a chance for a new era of baseball with a much more level playing field among all the teams.

Let's see, high payroll teams would be taxed, with that(or part) used to fund teams with a payroll, under $100 mil, but those teams under $100mil would be fined for not meeting the floor.

I am having a hard time making sense of that.

Anything to limit player pay

The luxury tax receivers would have to use it for salaries, not to line the owner's pocket or to pay other expenses, like happens now.

It would raise most player's pay, while the high end player salaries would be suppressed somewhat.

WOW! I haven't watched baseball for 25 years.
Can't they just shut down the league, didn't they go to the moon for like 10 percent of that cost.

It seems astronomical now that I never watch it anymore. Last week, HA, I heard the Pirates had a flippni dynasty, 3 world series in 5 years,
are you $#%%$%% me, it's the Pirates, I don't believe it.

NFL average was 200 million per salary. per team per year.

I read that as 100 million per player, in baseball.
Every baseball player gets 100 million per year, Floor!
Not yet give the left a few more years in charge of inflation, though.

If every baseball players salary was 100 million, floor, you'd think that'd be enough to go to Mars or further. (if you believe in outer space that is

Time for your meds, TL.

I understand that.

In a way it does line the owners pockets. You get better players without using your own money.

But, that is OK because there is too wide a gap in what some teams can afford and what some teams can't.

Sounds like communism to me. The richer a team is the more taxes they pay. Then that money goes to those with less money. That just doesn't sound Murican does it?

... following the parallel, it probably won't work. There will still be the have's and have-not's in baseball.

MLB is not analogous to the economy of an entire country. Its really more of a corporate entity whose "divisions" are not on an equal economic footing, yet still forced to compete with each other on the field. MLB's teams are interdependent and need each other for the league to survive. The Yankees, Dodgers, Mets, and Cubs could not have a viable league without Cleveland, Tampa, Kansas City, Pittsburgh, and all the other small/mid market teams. The NFL, NBA, NHL are not socialist/communist by having degrees of profit sharing and either luxury taxes or salary caps. What they realize, and what MLB - at this point - does not realize, is that a rising tide raises all boats. They also realize that while their teams compete on the field, court, or ice, they do not need to compete financially. Who they do need to compete with is all the other sports leagues, along with all the other entertainment venues where consumers might spend their money.

Mmmmm hmmmm.....