Friday, December 2, 2022
HomeMLBMLB owners proposing salary floor subsidized by lower tax threshold

MLB owners proposing salary floor subsidized by lower tax threshold

The MLB Collective Bargaining Agreement is set to expire on December 1, which means labor negotiations will be ongoing over the next several months. One report says representatives from MLB and the MLBPA met on Monday in Denver to discuss alterations to the existing CBA. According to The Athletic’s Ken Rosenthal, the big change proposed by the owners involved a salary floor subsidized by a lower tax threshold.

The report says the owners proposed having a $100 million floor. However, the first tier of the luxury tax would be lowered from its current level of $210 million to $180 million.

The addition of a salary floor would be welcomed. It would force teams to spend a certain amount of money on their roster each year. However, the tradeoff would be a lower first tax threshold. This tradeoff would have an adverse affect on spending, so there might not be much of a net gain to this change league-wide.

The goal of MLB should be to have teams trying to field the best teams possible, not to try to maximize profits by using cheap players. Why? Because the former creates a better product and generates more fan interest, which results in a better, healthier league. Revenues and team values rise when the league is at its best and most competitive. It’s not as fun when just a few teams are willing to spend big, while several teams are content building cheap rosters and being subsidized by the big fish.

We don’t know all the details about how this proposal would work with tax money subsidizing the lower teams. But the salary floor should be well higher than $100 million (at least $130 million). And the first tier for a tax should not be lower than $200 million.

The players would also like to have players be eligible for arbitration earlier than they are now. Such a measure might get money into the hands of the more deserving young players, likely at the cost of veteran free agents.

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