DiamondCentric Roundtable: What Do We Do About Financial Inequality in MLB?

[Matthew Lenz]

After three authors delved into the promises and pitfalls of various approaches to bridging the gaps between small- and large-market teams last week across our websites, tonight, we offer a discussion among them about what was learned.

Image courtesy of © Brad Rempel-Imagn Images

Matt Trueblood: So, first of all, I want to hear whether any of you changed what policy prescriptions (if any) you advocate or oppose now that you didn’t before digging into this. Did anyone see a new dynamic in the positions of big- and small-market teams or the union that they could particularly appreciate, or an unintended consequence of a change they didn’t expect?

Brandon Glick: I went into this project expecting to advocate—hard—for a salary cap and floor. The NFL operates pretty strongly with it, and the NBA is probably the paradigm example of a league that has year-round player movement and strong parity sourcing from a (soft) salary cap.

What I found was that not only does baseball have much stronger parity, both in terms of playoff performers and champion variety, but that it also spawns more trade and free-agent activity thanks to its existing systems that make up for not having a salary cap and floor (like the qualifying offer and prospect industry). There’s obviously a push and pull with this discussion—owners would want a hard cap with no floor, while the players would want the opposite—and that extends to the players as well, where superstar players are willing to give up the safety of a floor for the avoidance of a cap, while role players would suggest the opposite. Now, I feel pretty strongly that baseball needs tweaking, rather than a seismic overhaul to its economics.

Matthew Lenz: This project required me to adopt a more objective perspective, moving away from a fan's viewpoint. Before my research, I was of the (partially educated… and that might be generous) opinion that there needed to be a complete overhaul of MLB's Competitive Balance Tax (CBT) and revenue-sharing systems. My perspective was dually flawed, as I was only thinking of the implications of any change from a fan’s point of view and, moreover, as a fan of a small- to mid-market team. Now, after my research and reading Brandon and Jake’s articles, my (more educated) opinion is that the current system just needs some tweaks, specifically related to stiffer CBT penalties and deferrals.

Like Brandon, I think the parity in the league speaks for itself. That said, while deferrals aren’t new, the amount being deferred in some cases is unprecedented. We also have back-to-back seasons where there have been a record number of teams willing to pay the luxury tax, so my question back to the group would be: how long can we expect this parity to last, and will only minor tweaks maintain this level of it? 

BG: Look, spending money DOES help you win. Objectively speaking, buying better talent makes your team more talented. And when your team is more talented, you can start to attract guys like Roki Sasaki, who is very talented and also very cheap.

I think the parity of baseball exists mostly because of the randomness of it. No matter how good a pitcher on a mound is, any hitter can run into one against him. And even the best hitters can get unlucky against the worst pitchers. Unlike the NBA, where singular stars can fundamentally alter the course of an entire franchise, and the NFL, where the “haves” and “have-nots” are separated merely by the quality of their quarterback, individual stars cannot propel teams to championships in baseball. Over a 162-game season, they absolutely do—given a large enough sample size, the cream of the crop will rise to the top. But in a seven-game series, there’s just too much randomness to ever guarantee an outcome.

I think a reckoning is coming for baseball, not in terms of parity, but in terms of fan interest. There’s a palpable sense of burnout among fans this offseason as they watch the Dodgers nab every superstar on the market. If revenues start to dip, or television ratings start to decline, the league may be forced into action.

MT: Let’s imagine that we do achieve a measure of financial parity, where spending power differences between teams shrink significantly. We’d still want a way to discourage players from forming super-teams and clustering up to chase rings at the expense of everyone else, right? Does anyone have an interesting idea in that vein?

Jake McKibbin: One of the beautiful things about baseball is that any team can win on any given day. I have no problems with players chasing rings in free agency. This can be offset by strong drafting and development of players. Six or seven seasons of team control is a lot to work with, if you have the right talent coming through, so the main thing I’d want to see is every team have the ability to have three players locked into $20-million AAV deals and beyond. That’s not a huge sum, in this market, but I think it’s an achievable one. If players want to take reduced/deferred salaries to join one particular organization, that should be their right, but the cyclical nature of baseball powerhouses will likely result in a period in which these teams are paying heavily for aging, underperforming veterans.

ML: Totally agree with Jake here. An idyllic world in sports, as unachievable as it might be, is one where nobody cares about money and everyone just cares about winning. At the end of the day, there will be some balance between players who prioritize money and those who prioritize winning. While that balance may not be even close to 50/50, I don’t think we can force players into a spot where they have to go play for poverty organizations like the Chicago White Sox because the Los Angeles Dodgers and New York City teams are too stacked.

I think the other thing that will help balance is that these guys are competitors and want to play ball. Unless their skills are worsening and a smaller role is warranted, their ego and natural competitive edge aren’t going to allow them to join a super team just to sit on the bench—although the Dodgers' starting rotation may be a counterpoint to this argument.

MT: To have a cap and floor, we’d have to define the baseball revenues of the game to the satisfaction of both the owners and the union. Can the owners be trusted to honestly report what they make, and how, such that players would accept their estimates? Should owners have to count money made from real estate and other investments whose value clearly derives from the baseball venture as revenue of which a percentage must go to players? Would certain teams demand that, at the expense of others who make especially gaudy amounts outside the gates of the park? How do you solve that problem?

BG: Yet again, Matt throws me a curveball while I’m sitting on the heater (clearly, Matt never played for Lou Brown).

I could wax poetic about this topic for a while, but the short of it is, no, you obviously cannot trust owners to properly report what they’re making, whether it’s purely team revenue or their entire portfolio. By day I’m a sportswriter, but by night I moonlight as a filmmaker, so trust me when I say this: There is no industry more corrupt than “Hollywood Accounting”. Those studio executives are the greediest people to ever walk the face of the earth. They make the biblical version of avarice look like a child who won’t share his Play-Doh. Behind them are politicians, and in a close third in the greedy column are sports team owners.

As a Cubs fan, I know all too well about Tom Ricketts’s habit of claiming that all team revenue is funneled back into baseball operations. No, it isn’t. The Cubs have an annual payroll in the $200-$250 million range. Their revenue exceeded $500 million last year. Accounting for all the other expenses that go into owning a baseball team, like paying employee salaries and upkeep for the stadium,, doesn’t come close to making up that $250-300 million gap. Insofar as a salary cap and floor would require revenue reports—which they would, seeing as the figures for those parameters are percentages of the total league revenue—there just isn’t a good way to implement them into the modern age of baseball, where owners have made a business out of lying to their fans.

JM: A revenue report would be fascinating. In the UK, all entities above a certain size are required to submit annual accounts to Companies House, where it can be accessed free of charge by anyone. Sports teams are held accountable, and it prevents any of the siphoning of funds that we suspect happens in baseball while giving a true cost of the operations of running an organization. This system obviously isn’t in place in the US.

Brandon, can you see any way in which the owners could be tempted to air their dirty laundry in public? Or even to an independent adjudicator, perhaps, who reviews total revenue, its source, and dictates how much each team is liable for into the revenue-sharing pool?

BG: Putting aside my (some would say staunch) beliefs that billionaires should be the most public people about their finances, rather than the most private, I want to believe that it’s possible that the league could coerce each owner into sharing information, at least between each other.

Here’s the thing, though: I don’t actually know that a salary cap would be of benefit to baseball in the way some think. Think of what your reaction was when you saw Juan Soto’s contract with the Mets this offseason. If I were to look into my crystal ball and guess, it was probably some variation of “Holy S**t!”. If Soto was locked into signing a max contract of, for example, 10 years and $400 million, it would still boggle the mind, but it wouldn’t come as a surprise. Baseball’s current system is flawed, but I don’t think implementing a salary cap would’ve pushed Soto to the Athletics or Rays or anything, even if there was a maximum he was allowed to earn on his contract. If anything, it may have even led him back to the Yankees or even (gulp) the Dodgers.

Unless a wave of benevolence washes over the ruling class of MLB, I don’t anticipate that we (or even the league) will ever have enough information to properly assess where a cap and floor should lie, and which teams should be responsible for paying what. In that case, I guess we can all just enjoy the funniness of watching people with more money than the human mind can comprehend measure which of their wallets can stretch wider.

MT: Expanding revenue sharing is always easier to swallow when revenues are growing, but because of the slow deflation of the regional sports TV bubble, that hasn’t been the case—or at least, it hasn’t clearly been the case, with a robust and impressive rate of growth—over the last handful of years. Do you think a change in how money is distributed throughout the league has to wait until teams have a clearer collective picture of their future earnings from broadcasts—or should those revenues be shaped and their path forward be set based on a known arrangement with regard to revenue sharing?

ML: Based on what Jake laid out in his article, I think that any changes to the revenue-sharing system need to wait until teams have a better understanding of their revenue from broadcasts. Another miscalculation of team revenue, like the one that has happened before, risks a hundreds-of-millions shortfall for teams to share. While that was in part to bail out a team facing bankruptcy, it’s baffling to me that the situation has never been fully rectified by MLB, in what will end up being a multi-billion dollar blunder.

MT: A major factor in the future financial structure of the game will be the league’s efforts to expand. Now that the A’s are out of Oakland and (they hope) en route to Las Vegas, there’s a bit more certainty to that situation, but the Rays’ sticky stadium situation could create another relocation fight in the near future. Expansion would bring billions to the sport in new franchise expansion fees and increased earnings from televising an expanded postseason, but it will probably also create two new small-market teams. Should that future consideration shape decisions about whether or how to change the fundamental financial structure of the sport?

JM: I think it’s a very apt point, but they should be treated as two separate issues. The challenges of a startup franchise, and the volatility they’ll face (which should ease as they develop their fan base, infrastructure, drafting, etc) are almost entirely separate from creating a balanced ecosystem in the here and now. Exceptional items will need to be made to facilitate any expansion plans, but the benefits of tweaking the revenue-sharing setup at the next CBA to create a more balanced playing field should help those newer, small-market franchises after their initial growth phase.

ML: I agree with Jake. Regardless of the sport and its financial structure, start-up franchises face hurdles that they must overcome through development and time. I don’t know that the financial structure of the league, especially in baseball, has a major impact on the short-term success of a new organization. While you don’t want to make long-term success so much of an uphill battle that it deters new owners from investing, I think you need to prioritize making the best version of the game you can with the existing franchises.

MT: Finally, we know that all of this conversation is happening in the shadow of the next CBA negotiations. A lockout seems likely; lost games seem possible. Which of these possible approaches reduces the friction in labor negotiations best? Would leaning into one approach make it more likely that all parties find something palatable on which to agree and spare us a long, quiet, nervous winter? And is that an overweening consideration, or is getting to the best solution worth big labor trouble?

ML: Referencing my first comment in this roundtable, while the fan in me thought a major overhaul would be best, I think the more objective opinion of “minor tweaks” is the best solution to avoid or minimize a work stoppage. I don’t see how two parties with financial goals on opposite sides of the spectrum would ever be able to come to an agreement to move quickly from where we are to that grand destination, even if it’s the “best solution” for baseball. I do think change needs to happen, but I think everyone (owners, players, fans) needs to be realistic about how much change will actually happen, if the priority is to play ball on Opening Day 2027.

BG: I agree wholeheartedly with Matt (Lenz) here, and I want to remind readers what happened during the last CBA lockout and the COVID-induced “lockout” in 2020. The players go into negotiations with specific goals, and the owners refuse to budge. It’s only once the threat of losing revenue starts to hit home that their side begins to negotiate in “good faith”—and, from the players’ perspective, the threat of losing salary convinces them to move the goalposts on their own wishes.

Unless baseball is willing to punt on an entire season (or more), there just isn’t the time and space to completely revamp how the system works. And while that may sound defeatist to those hoping to see significant change, that’s also the reason why we won’t see baseball cancel a season or postseason again, like it did in 1994. This conversation is, ultimately, about money, and both sides want it. They may not see eye-to-eye on most things, but they do understand each other on that matter. Needling and prodding the status quo may not be in the best interests of the long-term health of the game, but in an effort to keep eyes focused on the field rather than risk ears pressed up against the closed doors of the CBA negotiations, I firmly believe both sides will continue to kick this timebomb of a can down the road.

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[tony&rodney]

The simplest solution going forward will be a monstrous difficult task. All attendance and media revenues need to be combined into one pot and distributed evenly. Stadium advertisements, executive boxes, adjoining real estate income, etc. will still give large market teams a big advantage but Milwaukee will no longer need to pretend that running their team perfectly, selling out their stadium, and maxing out their media contracts puts them on anything close to a fair level as the large market teams. It takes two teams to play the games. There are zero reasons why a New York, Houston, LA, or Boston team makes more money off of their media than an opponent. No opposing team, no TV or radio.

[Vanimal46]

Idk if any of the TD writers caught this recent interview from Hal Steinbrenner…

If the Yankees are trying to join the group of teams with actual revenue/payroll limits, then baseball is doomed. The Yankees are the 4th most valuable franchise in all of professional sports with a $7.5 billion estimated value. 

The lockout coming in 2027 is going to be the most intense fight in the sport’s history. We may lose the entire season to fix the health of the sport moving forward. 

[darin617]

The solution is something we don't want to think about. It will be a lockout/strike in 2027 I believe. 

I just hope they don't lose the whole season. But they need to fix this nonsense. The Dodgers can't just buy everyone. Granted that doesn't guarantee a championship. 

[HerbieFan]

Revenue sharing....Salary cap

[UpstateNewYorker]

MLB has parity only in the sense that the current playoff system of 12 teams making the playoffs produces somewhat random results in terms of championships. The Yankees have qualified for the postseason in 11 of the last 15 seasons. And here are the Dodgers recent win totals excluding the Covid year: 98, 100, 111, 106, 106, 92, 104, and four more seasons in the 90s. The big market teams have a decent chance every year to make the World Series. Even well run small market teams struggle to make the playoffs on a consistent basis, and when they do, they have an uphill road to the World Series. The Brewers have qualified in six of the last seven seasons but have not played in the WS those years. 

[NotAboutWinning]

Great, informative content! Thank you!

[Otaknam]

These guys can slice and dice it any way they want to claim the system isn’t really broken. Yes, an excellent minor league player development program is crucial to small and mid market teams. But the fact is that when there is a handful of teams spending 2 to 4 times more on player salaries than the rest, it does create a distorted market favoring the big spenders. Right now the Dodgers are the bullies in the playground, with the Yankees, Red Sox, Phillies, Cubs and a couple of others close behind. The rest of us are left with the discouraging belief that our team really has no chance to make a strong playoff run. When even the Yankees, who historically have outspent everyone else by a wide margin, are whining about the spending of the Dodgers, you know the system is unstable. 

[NYCTK]

13 hours ago, Vanimal46 said:

Idk if any of the TD writers caught this recent interview from Hal Steinbrenner…

If the Yankees are trying to join the group of teams with actual revenue/payroll limits, then baseball is doomed. The Yankees are the 4th most valuable franchise in all of professional sports with a $7.5 billion estimated value. 

The lockout coming in 2027 is going to be the most intense fight in the sport’s history. We may lose the entire season to fix the health of the sport moving forward. 

Hal just offered a $750 million contract to Soto. Don't believe him when he's crying poor. 

[Killer Rod Tony]

Talking baseball player money means talking ownership revenues and massive cost to see a game. I read so often where someone says oh that's not much he's only 2 million dollars do you like going to a game where a person makes two million dollars just to play a game while you are making nowhere near that calling it cheap oh that salaries cheap none of it is cheap it's extraordinarily crazy money and Derek Jeter said that one time on the David Letterman show when he was making 15K a year. The first free agent signing made $350,000 for the season unheard of. I have not been to a game in 7 years and I will never go to a game again because of this crazy money and seemingly we the fans don't mind throwing big money at watching a game if you have it so only 5% of the public can actually go to a game with a decent seat. Boycott baseball don't anybody go to a game for an entire season let these greedy players understand they can play for $500,000 a year and be happy

[NYCTK]

12 minutes ago, Killer Rod Tony said:

Talking baseball player money means talking ownership revenues and massive cost to see a game. I read so often where someone says oh that's not much he's only 2 million dollars do you like going to a game where a person makes two million dollars just to play a game while you are making nowhere near that calling it cheap oh that salaries cheap none of it is cheap it's extraordinarily crazy money and Derek Jeter said that one time on the David Letterman show when he was making 15K a year. The first free agent signing made $350,000 for the season unheard of. I have not been to a game in 7 years and I will never go to a game again because of this crazy money and seemingly we the fans don't mind throwing big money at watching a game if you have it so only 5% of the public can actually go to a game with a decent seat. Boycott baseball don't anybody go to a game for an entire season let these greedy players understand they can play for $500,000 a year and be happy

It ain't the players that are greedy. You started off right, blaming the do-nothing, welfare queen owners. You think the owners are going to suddenly charge a nickel a ticket if the players decided not to take a salary? 

[Twodogs]

12 minutes ago, Killer Rod Tony said:

Talking baseball player money means talking ownership revenues and massive cost to see a game. I read so often where someone says oh that's not much he's only 2 million dollars do you like going to a game where a person makes two million dollars just to play a game while you are making nowhere near that calling it cheap oh that salaries cheap none of it is cheap it's extraordinarily crazy money and Derek Jeter said that one time on the David Letterman show when he was making 15K a year. The first free agent signing made $350,000 for the season unheard of. I have not been to a game in 7 years and I will never go to a game again because of this crazy money and seemingly we the fans don't mind throwing big money at watching a game if you have it so only 5% of the public can actually go to a game with a decent seat. Boycott baseball don't anybody go to a game for an entire season let these greedy players understand they can play for $500,000 a year and be happy

I mean the owners aren't going broke?  I mean the entertainment dollar is obviously there?  Tom Cruise made 100 million for Top Gun 2 and that's all pretend?  I mean who deserves more money someone who pretends or someone who has to work his butt off to make it?  I mean yeah compared to me they all make too much money.  But maybe I should have worked harder?  I guess have you stopped watching TV or streaming movies because the actors get paid so much?  Have you stopped listening to music because the artists make so much?  I mean watching the local baseball team has roots in the good ole days, but the good ole days are gone, this is what stuff costs now and I don't blame anyone for not wanting to spend to watch it.  But I just see some hypocrisy, not necessarily from you because maybe you don't watch movies or listen to music for the same reasons.  But the reasons that many people bring up as to why they won't watch another baseball game happens exactly the same way in other industries and many of them don't have a problem with Adam Sandler making 73 million per year for again pretend stuff.  

 

So my point is if the money is there, why should the owners get all of it and not the guys busting their butts?  

 

On another note, I feel like the Dodgers are trying to force critical mass with all of their deferred contracts.  I feel like they are trying to force a strike, so when salary caps happen they are going to try and say, hey we signed these deals before the salary cap so we can't be held responsible for these old contracts so now we need a reset.  But in the meantime, they are going to try to win every world series until that strike happens.  You watch, the 68 million per season they are going to owe Shohei when he's not even playing anymore is going to get wiped out as part of the new collective bargaining agreement.  Just my prediction.

[tony&rodney]

26 minutes ago, Killer Rod Tony said:

I have not been to a game in 7 years and I will never go to a game again because of this crazy money

This is an interesting take. I am wondering if you listen to music or watch any television shows or go to movies or have ever been to a Walmart or bought a car or buy gas or have any type of insurance?

Professional sports are one of the only professions that require excellence to get to a top salary. While plenty of people (probably the majority) earn their way in all walks of life, there is a ton of wealth that is inherited by idiots (not all who inherit are morons) and a ton of people gain high positions due to their knowing someone. Additionally much of the wealth of most companies comes from government aid.

I can't think of a single baseball player who was paid because they were cute or earns a top salary because they knew somebody or inherited the shortstop position. If you want to reward hard work when you seek out entertainment that is professional you can't do any better than going to a baseball game.

However, if you just don't support anyone making more than say $500,000 per year and prefer to watch amateur sports, that I can support because if we take away all wealth in the country above that limit a ton of problems could be solved. Maybe that was your point.

[jmlease1]

Isn't Atlanta part of a publicly traded company and so have their books more available? i haven't had the wherewithal to try and dig that out, but I'd be curious to know whether it actually gives real information on their finances.

 

[tony&rodney]

3 hours ago, Otaknam said:

When even the Yankees, who historically have outspent everyone else by a wide margin, are whining

In a way the Yankees have a good reason to whine about the Dodgers. The Dodgers only shared their revenue based on what MLB estimated the next media contract during the debacle of the 2011 (?) bankruptcy proceedings. The Dodgers then (right after the signed agreement) negotiated a massive media deal and saved about $600 million of money that should have gone to the revenue fund in the next decade. The Yankees would have liked to have saved $600 million too. The terms were not on a level field even for the wealthy teams. A  can of worms or Pandora's box resulted. 

The problem will be the next step and it will be very difficult unless the 18-20 smallest markets stand together. That has never happened yet in baseball history..

[Cris E]

2 hours ago, Twodogs said:

On another note, I feel like the Dodgers are trying to force critical mass with all of their deferred contracts.  I feel like they are trying to force a strike, so when salary caps happen they are going to try and say, hey we signed these deals before the salary cap so we can't be held responsible for these old contracts so now we need a reset.  But in the meantime, they are going to try to win every world series until that strike happens.  You watch, the 68 million per season they are going to owe Shohei when he's not even playing anymore is going to get wiped out as part of the new collective bargaining agreement.  Just my prediction.

Perhaps you worded that poorly, but they are clearly going to be paying Ohtani what is in his contract, full stop. The way they calculate deferred payments when measuring payroll may change, but he's getting the money promised on the schedule agreed to.

[Vanimal46]

3 hours ago, NYCTK said:

Hal just offered a $750 million contract to Soto. Don't believe him when he's crying poor. 

Couldn’t agree more. I was playing the world’s smallest violin when I heard the press conference. I even thought about starting a Go Fund Me to help out the ownership group of a $7.5 billion organization. 

[Cris E]

Back in 1994 it was a big step to add the luxury tax and they did increase the types of shared revenue and what we got was 30 years of peace among the owners. It really was a beautiful period of relative calm and equality in baseball's long history. 

The new revenue sharing model is going to take some serious owner compromise to keep this thing running or we'll be back to the 1977-1993 period where only some teams had a realistic chance of assembling a championship roster. Remember the standard step of trading your top players once they reached free agency? Did you notice that once the money was spread a bit more evenly you saw franchise players signing huge hometown deals because every team could afford at least one of them?

I think the next deal is going to have to focus on managing the remaining large money teams that still have lucrative cable networks. It's not clear how things are going to shake out for the rest, but those guys are going to have to share the money in ways they aren't going to like.  Maybe set a level (200% median revenues?) where they just get luxury taxed harder than the regular rates. That way if the ailing Padres owner wants to take a run at a title before he dies his luxury rate is lower than the Dodgers, which could encourage other teams to spend above their ranking.  Similarly, perhaps cap or reduce the revenue sharing monies sent to any team not at a calculated floor (50% of median payroll?) so that every team can afford it but you really are spending nothing for roster construction reasons rather than simple profit.

But all this will take a serious cage match between the owners. As mentioned above, the current system isn't too bad and the main topic to be dealt with, the 80000 lb elephant in the luxury suite, is reporting and sharing revenue accurately. it's going to be very hard to solve and I don;t think the players have a lot of say in things this time.

[Vanimal46]

5 minutes ago, Cris E said:

But all this will take a serious cage match between the owners. As mentioned above, the current system isn't too bad and the main topic to be dealt with, the 80000 lb elephant in the luxury suite, is reporting and sharing revenue accurately. it's going to be very hard to solve and I don;t think the players have a lot of say in things this time.

This is a great point. The last CBA debacle was a clear players vs. owners debate. This one coming up in 2027 will likely be between the large market owners vs. medium/small market owners. And they may take the entire year to sort it all out. 

[NYCTK]

3 minutes ago, Vanimal46 said:

This is a great point. The last CBA debacle was a clear players vs. owners debate. This one coming up in 2027 will likely be between the large market owners vs. medium/small market owners. And they may take the entire year to sort it all out. 

And they'll still try to blame it on the selfish players, and will succeed with the rubes. 

[bean5302]

A hard salary cap is not necessary, and it will never be accepted by players. The impact on long term contracts would be more than a little chilling. Dead cap in terms of performance could render a team non-competitive for years and years with the kind of contracts baseball teams hand out right now.

The biggest contract in NFL history is 2020's extension of Pat Mahomes which was a 10 year $450MM deal. Of that, ONLY 3 years and $63MM was guaranteed at signing. 

Other than Deshaun Watson's catastrophe, Joe Burrow's $147MM guarantee is the largest in NFL history with only 11 contracts in NFL history ever hitting the $100MM guarantee mark.

While the participants in this evaluation have undoubtedly gained a new perspective from the exercise, the us (fans + players for some reason) vs. them (owners) still lingers on.

[FargoFanMan]

Money is always the talking point. Maybe instead of a luxury tax and everything revolving around money let’s tweak the approach taken in the last CBA. To a degree. Rewarding smaller market teams with more draft picks and penalizing the luxury tax teams by relinquishing draft picks. Make the draft budgets higher and lower based on the payrolls. Get away from punishing teams for tanking. Teams aren’t doing that in the sense of the word. If they are don’t slap them on the wrist for one year. Investigate it heavily and if they are penalize them. Harshly! Put the luxury tax money into developmental budgets possibly and not just a check to the team for whatever they want to use it for. That money should go into developing players to achieve better players for the game itself, not just for a team. Tie more of the money to improving the game by developing more higher quality players. Every action has a reaction but to simply argue money based on free agency completely ignores so many other facets of the game. Salary caps and floors are silly. Centralized money created by salary caps and floors leads to a mockery as seen by the NFL and NBA. As an outsider to other sports I stopped watching years ago simply because I believe baseball and to some ends hockey are the only true “sports” left in this country of the major sports leagues. The NBA and NFL have been subjected to mere “entertainment” leagues because of the centralized controls of the money. Keeping teams independent and more privatized to do what they want keeps baseball in the “sports” category. It keeps MLB as a corporation honest to the fans as much as it can be. Deferred contracts are are a black eye but we’ll see how that plays out when these guys get into they’re late 30’s or get injured. Time will tell how those contracts age. The dodgers can buy all the talent they want. As long as small market teams can develop and produce teams of younger hungry players small markets will always compete. Good young players will always be a hotter commodity than good aging players. As long as the rules don’t change and the bigger market teams pay big dollars for what a player has already done rather than paying younger players big money for what they could do the system will balance itself out. I’d take $20M in good young talent rather than $250M in aging talent any day. And that’s the equalizer. 

[Vanimal46]

59 minutes ago, FargoFanMan said:

Get away from punishing teams for tanking. Teams aren’t doing that in the sense of the word

Good post overall and sorry for picking on one thought here… But what would you describe the 2024 White Sox? That was a clear tank job. 

[Twodogs]

12 hours ago, Cris E said:

Perhaps you worded that poorly, but they are clearly going to be paying Ohtani what is in his contract, full stop. The way they calculate deferred payments when measuring payroll may change, but he's getting the money promised on the schedule agreed to.

Oh for sure, Ohtani will get paid, but what I meant is that I think the Dodgers will try to find a way to not have any of his future deferred payments count against the future salary cap/luxury tax system that potentially gets put in place.  I think they are hoping that they can get MLB to help them work around that.  

[NYCTK]

9 hours ago, Twodogs said:

Oh for sure, Ohtani will get paid, but what I meant is that I think the Dodgers will try to find a way to not have any of his future deferred payments count against the future salary cap/luxury tax system that potentially gets put in place.  I think they are hoping that they can get MLB to help them work around that.  

Well, it probably shouldn't. It's counting against their current salary/tax thresholds so it doesn't make sense to double penalize them. 

People need to start thinking of it as a retirement account instead of salary payments. Ohtani is getting "paid" $47 Million; $2 Million in cash, with an additional payment of $45M into a retirement account that is guaranteeing a 4.25% return. 

[Twodogs]

5 hours ago, NYCTK said:

Well, it probably shouldn't. It's counting against their current salary/tax thresholds so it doesn't make sense to double penalize them. 

People need to start thinking of it as a retirement account instead of salary payments. Ohtani is getting "paid" $47 Million; $2 Million in cash, with an additional payment of $45M into a retirement account that is guaranteeing a 4.25% return. 

I thought when they deferred the payments that it didn't count against the salary luxury tax thresholds?  I mean why defer 68 of the 70 million for 10 years?  So the million dollars that the Mets owe Bobby Bonilla every year because they deferred it back in the day doesn't count against their salary threshold??  I thought they got to push that into the future?

[NYCTK]

1 minute ago, Twodogs said:

I thought when they deferred the payments that it didn't count against the salary luxury tax thresholds?  I mean why defer 68 of the 70 million for 10 years?  So the million dollars that the Mets owe Bobby Bonilla every year because they deferred it back in the day doesn't count against their salary threshold??  I thought they got to push that into the future?

The Dodgers have a 46 million salary hit for Ohtani for tax purposes. 

https://www.spotrac.com/mlb/los-angeles-dodgers/tax/_/year/2025

 

[Twodogs]

11 minutes ago, NYCTK said:

The Dodgers have a 46 million salary hit for Ohtani for tax purposes. 

https://www.spotrac.com/mlb/los-angeles-dodgers/tax/_/year/2025

 

So I'm not 100% familiar with how Ohtani's 70 million per season affects their seasonal payroll, because I am assuming that the Luxury tax that they owe at the end of the season to the other teams is based on the seasonal payroll? 

 

So if they are paying him 2 mill and have deferred 68 million per season.  They are being affected at a rate of 46 million on their seasonal payroll? When do the Dodgers have to put the other 24 million on the payroll? When do they get taxed on the other 24 million?  And, now I really don't get why they deferred 68 million dollars if 46 million of it is counted against the payroll? 

 

It really doesn't make sense to me as to why they would defer it, since they can obviously afford it?  I thought if they deferred a bunch of money that it wouldn't count against them until they actually paid it?  Sorry about the questions, but now to me the water is a lot more murkey if they have to show the deferred money on the current payroll?

[NYCTK]

1 minute ago, Twodogs said:

When do the Dodgers have to put the other 24 million on the payroll?

They don't. Time value of money. That 70 million is discounted to a present day value. 2 now + 68 million in 10 years = 46, or at least so says MLB. 

[Twodogs]

3 minutes ago, NYCTK said:

They don't. Time value of money. That 70 million is discounted to a present day value. 2 now + 68 million in 10 years = 46, or at least so says MLB. 

Oh, ok that is sort of making some sense, now my next question is, with the time value of money will it still equal 46 or at least close to it in years 10 through 20 when they are still paying him the 68 million per season?  I wonder how will that work?  Only being counted at 46 million per season would only be 460,000 million, so on the back half I wonder if they will then be responsible for the 240,000 million left over??