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Competitive Balance Tax Wobbly Floor


Brandon

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I was just thinking about the Competitive Balance Tax in Baseball and the negotiations going on and was thinking about the concept that was proposed of a 100 million floor.  for a lot of small market teams that would be too high of a floor as it makes sense to dip down when doing a rebuild.  but the thought that crossed my mind is.... why does it have to be a solid floor?  I mean with the competitive balance tax on the top end of teams payrolls they have an escalating penalty each year they are above a limit.  

Shouldn't that work if teams drop below a certain limit as well?

I think a better current floor would be between 70 million and 80 million.  Drop below it once and receive a slap on the wrist 10% drop in revenue sharing revenue.  Do it 2 years in a row make it 40% drop in revenue sharing received and a competitive balance draft pick or have that pick drop a round.  do it 3 years in a row loos all revenue sharing designed to boost small market teams and lose all additional competitive draft picks designed to help low revenue teams.  I am sure the exact amounts can be negotiated.  But I would support a floor built the same way a ceiling has been installed so a team can't be brought down to the studs and receive lots of money....

This would also make tanking more interesting because how would you do it?  trading for bad contracts and prospects which teams would probably do.  This would help tanking teams get more prospects and get out of the cellar faster.  This would be a new wrinkle in the game and a benefit for the players.

Weigh in and tell us what you think about a wobbly floor?

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To make it palatable for a rebuilding team to take a salary dump is to entice them with decent prospect. Money for the franchises that are in the luxury tax realm is easier to come by than prospects, so the idea of trading prospects to dump salary is not going to happen unless it is a boatload of high risk, high ceiling, warted out  prospects. 

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The $100MM floor is to eliminate the tank/rebuild cycle. Tank/rebuild is viable method for teams, but it's not viable for the sport as a whole. $100MM is not too much for what MLB considers to be the minimal viable market and the floor would be used to push new stadiums, new ownership or moving franchises like Pittsburgh, Oakland and Tampa Bay. Not to mention the teams who do not engage in the tank/rebuild method are sick and tired of financing the teams who do run unacceptably low payrolls. 

The AL Central is as small market as it gets overall. Here are the max opening day payrolls by team.

  1. Detroit = $200MM (2017)
  2. Kansas City = $143MM (2017)
  3. Cleveland = $135MM (2018)
  4. Chicago = $129MM (2021)
  5. Minnesota = $129MM (2018)
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20 hours ago, bean5302 said:

The $100MM floor is to eliminate the tank/rebuild cycle. Tank/rebuild is viable method for teams, but it's not viable for the sport as a whole. $100MM is not too much for what MLB considers to be the minimal viable market and the floor would be used to push new stadiums, new ownership or moving franchises like Pittsburgh, Oakland and Tampa Bay. Not to mention the teams who do not engage in the tank/rebuild method are sick and tired of financing the teams who do run unacceptably low payrolls. 

The AL Central is as small market as it gets overall. Here are the max opening day payrolls by team.

  1. Detroit = $200MM (2017)
  2. Kansas City = $143MM (2017)
  3. Cleveland = $135MM (2018)
  4. Chicago = $129MM (2021)
  5. Minnesota = $129MM (2018)

Except it won't. If there are teams spending $200M+ a year on payroll, making a $50M payroll team spend $100M/yr isn't going to fly because truly, what is there to gain? Will (should) they be a incrementally better team? Should be. But MLB isn't a game of increments. You either qualify for the playoffs (and its $$$), or you don't.  The only way the floor works is if they expand the playoffs to the point where it minimizes the financial risk of spending the money. Unless, of course, MLB goes "all in" and pools 100% of the television revenue and splits it evenly amongst the teams. Then you're talking bout enough money to restructure the entire league to a whole different pay structure (becomes a true "league" as opposed to a collection of independent contractors working under a pact).

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6 hours ago, Original_JB said:

Except it won't. If there are teams spending $200M+ a year on payroll, making a $50M payroll team spend $100M/yr isn't going to fly because truly, what is there to gain? Will (should) they be a incrementally better team? Should be. But MLB isn't a game of increments. You either qualify for the playoffs (and its $$$), or you don't.  The only way the floor works is if they expand the playoffs to the point where it minimizes the financial risk of spending the money. Unless, of course, MLB goes "all in" and pools 100% of the television revenue and splits it evenly amongst the teams. Then you're talking bout enough money to restructure the entire league to a whole different pay structure (becomes a true "league" as opposed to a collection of independent contractors working under a pact).

 

Other than the Seattle Mariners, I think every single team in MLB has qualified for the playoffs in the past 8 years and a vast majority in the past 5.

  • Atlanta ($127MM) vs. Houston ($171MM)
  • Los Angeles ($286MM) vs. Tampa Bay ($78MM)
  • Washington ($162MM) vs. Houston ($160MM)
  • Los Angeles ($186MM) vs. Boston ($236MM)
  • Los Angeles ($242MM)  vs. Houston ($124MM)
  • Chicago ($117MM) vs. Cleveland ($86MM)
  • New York ($101MM) vs. Kansas City ($114MM)
  • San Francisco ($154MM) vs. Kansas City ($92MM)
  • St. Louis ($115MM) vs. Boston ($151MM)
  • San Francisco ($118MM) vs. Detroit ($132MM)

Over the past 10 years, the median opening day payroll (from Stevetheump.com) for teams in the World Series is $130MM.

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A floor would absolutely make a team like the 2021 Orioles more competitive.

The floor is not designed to turn rebuilding teams into playoff contenders, it's to turn more 65 win teams into 70 win teams. It condenses the outcomes of all teams closer to 500. It's not likely to put an end to 100 win teams or sub-60 win teams, but it will reduce their frequency.

For the league as a whole, there is likely to be more teams in the September race, not from the rebuilding teams suddenly contending, but rather from them winning an extra game every month against teams that are contending, resulting in a tighter distribution in wins from the top to the bottom of every division.

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I was just thinking there should be a similar penalty for not spending the money if they get it.  Plus I hate tanking teams.  I guess teams will still tank but will do so by trading for bad contracts and prospects.  by getting more prospects that usually shortens the tanking time.  

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2 hours ago, Brandon said:

I was just thinking there should be a similar penalty for not spending the money if they get it.  Plus I hate tanking teams.  I guess teams will still tank but will do so by trading for bad contracts and prospects.  by getting more prospects that usually shortens the tanking time.  

So what if teams eat bad contracts and accept prospects and draft picks (competitive balance) to fill out their payroll? It accomplishes the rebuild faster, creates more opportunity for the veteran players, increases total spending and there's a chance the reclaimation/bad contract project has a rebound year and helps competitive play.

I read it as a hard floor so far. 

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14 hours ago, bean5302 said:

So what if teams eat bad contracts and accept prospects and draft picks (competitive balance) to fill out their payroll? It accomplishes the rebuild faster, creates more opportunity for the veteran players, increases total spending and there's a chance the reclaimation/bad contract project has a rebound year and helps competitive play.

I read it as a hard floor so far. 

It is read a s a hard floor.  I was just throwing out this idea and starting a discussion.  

There is nothing wrong with trading for bad contracts.  I was just pointing out that they will be more common with a floor.  My issue is with tanking.  Even if you are only a 70 win team you should still try to win 72 games.  Every win should matter for a team even a losing one.  It tells how close you truly are to the top.

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16 minutes ago, Brandon said:

Even if you are only a 70 win team you should still try to win 72 games.  Every win should matter for a team even a losing one.  It tells how close you truly are to the top.

That doesn't make sense if winning 72 instead of 70, hurts you don't the line. And teams in MLB don't tank in the true sense of the word. They are building for the future knowing there will be rough times, IMO real tanking would be sending out AA type pitchers that have no real change and no future and trying to lose, I don't see that happening.

Also a floor isn't going to do what everybody wants, unless the goal is take money from the owners and give it to the players.

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Perhaps in the competitive balance award money there could be some sort of wins/payroll algorithm where if you aren't spending money and you aren't winning you get less than teams that aren't spending money and are winning. So put some sort of value on regular season wins.  Keeps teams from eating too many bad contracts on injured/bad players just to reach some arbitrary 'floor'.

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First, I think the idea is okay, if a floor will be imposed without a solid cap, why have a solid floor.  I think the penalties would need to be different for players to like it though.  One, the revenue sharing should get split up to players somehow, not just left in the league or with the large market teams, and maybe even just shared with the players on the team.  

I would also think there should be something based on how many players are on pre-arb timelines.  Meaning, if a team has a lot of pre-arb players they should not be as punished, if at all.  The reason I have issue with a floor, without a hard cap, is it will force some teams to spend more on players just to get above the floor.  That will lead to lower talent players getting paid more, which is what the players want, but then the high level players will start to point out they are so much better than the lower talent guys and they now need to earn more.  It will not help with competitive balance, it will just cause some teams to pay more for less.

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