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Did MLB institute a "salary cap" in the new CBA?


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9 replies to this topic

#1 soxhop411


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Posted 22 January 2012 - 07:02 PM

http://www.cnbc.com/...olossal_Mistake



This could explain why the sox and the yankees have every intent to get under the luxury tax, and stay under there. Because looking at what it would cost the sox (or any team) every time they go over the lux tax would be counterproductive then the reward a team gets for staying under

#2 soxhop411


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Posted 23 January 2012 - 11:42 AM

IMO it seems like the CBA has screwed large market teams

#3 rembrat


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Posted 23 January 2012 - 11:52 AM

IMO it seems like the CBA has screwed large market teams


I like it?

#4 BucketOBalls


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Posted 23 January 2012 - 12:33 PM

IMO it seems like the CBA has screwed large market teams


Well, it kinda screwed everyone except the very small crappy teams. Unfortunately, this means a team can't spend more when the window is open either. Also, bad(or even even unlucky) contracts will hamstring teams for longer. Neither one of those is really good imho.

#5 OttoC


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Posted 23 January 2012 - 12:39 PM

Because I was unable to find the new CBA on-line, I asked the MLBPA when they were going to post it on their website and heard from them that "The new CBA won't be completed for another couple months. We'll post it as
soon as it becomes available."

#6 Gdiguy

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Posted 23 January 2012 - 08:49 PM

This thought came up in the main forum as well - while most of the angles are already covered, I wonder to what extend the Red Sox were suprised by how many of the other major market teams (NYM, LAD, Cubs) are in such terrible situations right now that they didn't really care whether a de factor cap was implemented.

Other than the Yankees (who are likely in their own class of 'profitible regardless of what the tax amount is'), there's only a handful of teams that can consistently afford to be at/slightly above the luxury tax cutoff, and if many of these teams were actively happy to have an excuse to reduce spending in the coming decade... there may not have been enough owners to successfully push away such a proposal.

#7 MakMan44


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Posted 24 January 2012 - 04:34 PM

What I wonder about is how the fact that player salaries will keep rising and how that is going to be effected by the fact that the Luxury tax cap moves up every three years now, instead of every year. I really feel like this is going to end up hurting the players in some fashion.

#8 Trautwein's Degree


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Posted 24 January 2012 - 08:05 PM

What I wonder about is how the fact that player salaries will keep rising and how that is going to be effected by the fact that the Luxury tax cap moves up every three years now, instead of every year. I really feel like this is going to end up hurting the players in some fashion.

You think?

#9 MikeM

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Posted 24 January 2012 - 10:49 PM

Well, it kinda screwed everyone except the very small crappy teams. Unfortunately, this means a team can't spend more when the window is open either. Also, bad(or even even unlucky) contracts will hamstring teams for longer. Neither one of those is really good imho.



Of course, that's all entirely dependent on the assumption that those teams can/will be spending at or above the proposed cap/s to begin with. Which outside the Yankees (*maybe* Philly too, given it's spending level now and the fact that their revenue stream appears to be improving on a yearly basis) and come 2014 when the cap gets raised up to a fairly hefty $189m, seems like quite the projected non-factor at best for everybody else.

Including the Red Sox there btw, who hardly project atm as a team that's going to be out there spending 189m+ on player payroll.

Edited by MikeM, 24 January 2012 - 10:53 PM.


#10 Sampo Gida

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Posted 28 January 2012 - 06:55 PM

If I understand this correctly, the revenue sharing rebate does not begin until 2013, so this should not affect any teams payroll budget in 2012, at least not directly. Teams would of course consider the impact of any 2012 signings on their 2013 payroll and the potential loss of a rebate in 2013.

In 2013, there will be a 25% revenue sharing rebate (from link at top of thread) for teams that have not paid a luxury tax for 2 or more consecutive years . The 25% rebate is equal to 25% of the revenue shared to 15 large market teams. These 15 large market teams will no longer be eligible to receive revenue sharing starting in 2016.

http://mlb.mlb.com/m...ds/2011_CBA.pdf

The fifteen Clubs in the largest markets will be disqualified from receiving revenue sharing by 2016. The revenue sharing funds that would have been distributed to the disqualified Clubs will be refunded to the payor Clubs, except that payor Clubs that have exceeded the CBT threshold two or more consecutive times will forfeit some or all of their refund


The amount of revenue sharing rebate increases to 50% of the revenue shared to the 15 large market teams in 2014, 75% in 2015 and 100% in 2016 (from link at top of thread)

If a team only goes over the CBT threshold every other year, it still receives the full revenue sharing rebate and pays the minimum 17% tax in those odd years they pay the tax (from link at top of thread), whereas perennial payers of the luxury tax pay up to a 50% rate and receive no rebate (or less than a full share).

We don't actually know how much revenue sharing each team pays, or much much of that goes to the 15 large market teams that will be refundable, so we can only estimate the amount of rebate teams could be expected to receive . I have seen estimates that the Red Sox pay about 80 million revenue sharing a year in total and the Yankees as much as 50% more due to their higher revenues (see notes at bottom). Just guessing here, but the amount of revenue sharing that goes to the 15 large market teams could be as low as 25% of the total paid (the last leak of revenue sharing data was for 2005 so is probably outdated, http://bizofbaseball...&Itemid=178).

It's been said this system favors the Yankees over the Red Sox, and as these are the only 2 teams that tend to go over the CBT threshold. Lets test this.

After 2016, if the Red Sox go over the CBT threshold by 10 million in odd years, about what they go over now, they would pay a 1.7 million tax and still collect a 20 million revenue sharing rebate (100% X the estimated 25% that goes to large market teams X estimated 80 million paid to all teams), or less than a 1% effective tax on total payroll of 180 million. If the Yankees continue to be perennial luxury tax payers, and stay over by 30 million a year they pay 15 million in tax (50% tax) and lose up to 30 million in revenue sharing rebates (estimate 50% above the Red Sox), or a 21% effective payroll tax,

If the Red Sox also become perennial payers of the tax, while going over by the same amount each year (10 million), the cost is 25 million( 5 tax+ 20 rebate)/190, or 13% effective payroll tax compared to the Yankees 45 million (45/210), or a 21% effective payroll tax.

Or looking at it based only on the amount spent on payroll over the CBT threshold, the numbers become 250% tax rate for the Red Sox (25/10) , 150% tax rate for the Yankees (45/30).

Note: Yankees/Red Sox revnues by Forbes in 2010, 266 vs 441
http://www.forbes.co..._MetroArea.html

http://newyork.yanke...yy&c_id=nyy,
Steinbrenner claims revenue sharing + luxury tax cost in 2010 cost Yankees 130 million

Edited by Sampo Gida, 28 January 2012 - 07:03 PM.