Based on what the league deemed as its best proposal, MLB decided one issue, perhaps above any other, is worth losing games: the competitive balance tax.
The CBT, also known as the luxury tax, was set at $210 million in 2021 — where it settled after $2 million annual increases since 2017. In their final offer to the MLBPA after nine straight days of negotiating in Jupiter, Fla., MLB proposed a $220 million threshold for each of the next three years.
There’s no way the league slipped those numbers across the table and possibly thought the players would tolerate it.
The players union was asking for the threshold to start at $238 million and rise from there. They argue clubs have used the CBT as a de facto salary cap and that it depresses salaries by de-incentivizing spending. In the final year of their proposals, the luxury tax thresholds were $33 million apart.
MLB’s offer was so detached from reality, so disingenuous and insincere, Rob Manfred had no choice but to lie about it in his press conference announcing canceled games.
“I think it’s important to look at the pattern of increases in the CBT thresholds in the last several agreements,” Manfred said. “I think the proposal we made is right in line with the agreements we’ve made in the past.”
Manfred was answering a question about why the CBT threshold hasn’t risen in reflection of the league’s revenue, or even in relation to general inflation. But even humoring him and limiting the conversation to previous collective bargaining agreements, Manfred’s defense still holds as much water as Scottsdale desert sand.
In the first eight years of the CBA, the luxury tax threshold increased by 52%, according to Baseball America Editor-in-Chief JJ Cooper. Over the past two CBAs, from 2012 on, it’s increased just 18%. And going from $210 million to $220 million is just a 5% raise.
And to answer the question Manfred fielded for him: in the last 10 years, the dollar has increased by a cumulative price of approximately 22% by inflation. If the CBT mirrored MLB revenue from 2003 to 2019, the CBT would approach $300 million, according to The Score’s Travis Sawchik.
How did we get here, to owners blatantly rigging the luxury tax in an effort to limit how much teams spend on players?
MLB is the only major US professional sport without an official salary cap. The league tried to implement one in 1994, which led to the worst work stoppage in MLB history — a strike that cost the 1994 World Series. The league didn’t give up, and then-commissioner Bud Selig eventually negotiated the competitive balance tax with the union, implementing it in 2003.
Five teams in 2021 came within $4 million of the CBT threshold. The penalties for dipping into the luxury tax have become too harsh that clubs refuse to spend extra, hurting player salaries.
“We look at the competitive balance tax as a breakaway spending mechanism. That’s how this thing was originally negotiated,” union executive subcommittee member Max Scherzer said. “We’re seeing it act as a salary cap.”
The owners contend the CBT is the only thing helping small market teams like Pittsburgh compete with big market clubs like the Yankees. But that too can be easily mythbusted.
Since 2003, 13 MLB franchises have won the World Series and 19 have played in it, ESPN’s Jeff Passan pointed out. In the championship years before the CBT, those numbers were 14 winners and 20 World Series participants.
The last eight years have seen eight different World Series winners. The Kansas City Royals won in 2015. The Rays, Cardinals, Athletics, Tigers and Cleveland have been relatively consistent playoff contenders with low budgets during the current CBT. Payrolls do not equal winning. And the luxury tax has no impact on teams like Baltimore bottoming out by spending $42 million on their roster.
The players know all this. That’s why they were so resolute in their unanimous rejection of MLB’s final offer in Jupiter.
On Twitter, Cardinals pitcher Jack Flarety said (presumably) of the deadline day disaster: “this is just another episode of Succession.” If Rob Manfred offered Logan Roy something like a $220 million CBT, he’d spit in his face before hurling a minuteslong diatribe of heinous expletives.
But the owners’ offer was worse than just unserious. It was straight up disrespectful.
Ross Stripling, the Blue Jays’ player representative, told Sportsnet.ca that the league tried to “sneak” new loopholes into their CBT proposal early Tuesday morning after 16-plus hours of negotiating.
“It got to be like 12:30 and the fine print of their CBT proposal was stuff we had never seen before,” Stripling said.“They were trying to sneak things through us, it was like they think we’re dumb baseball players and we get sleepy after midnight or something. It’s like that stupid football quote, they are who we thought they were. They did exactly what we thought they would do. They pushed us to a deadline that they imposed, and then they tried to sneak some shit past us at that deadline and we were ready for it. We’ve been ready for five years. And then they tried to flip it on us today in PR, saying that we’ve changed our tone and tried to make it look like it was our fault. That never happened.”
So not only was MLB’s offer a joke on substance, it was proposed in poor faith. Then they had the audacity to accuse the union of changing their tone.
The MLBPA conceded on issues like free agency eligibility, expanded arbitration and revenue sharing reforms. The league has hardly moved on their priorities, particularly the CBT. Add the nefarious negotiating style Stripling described and it’s easy to tell who’s to blame for the lost two series of the season.
“I don’t think (canceling games is) necessary,” Giants player rep Austin Slater told the San Francisco Chronicle. “But that’s their prerogative and Rob’s bargaining strategy was to push up past this deadline and see if they could shove a deal down our throats.”
The players want a fair deal, and they want to play. Their claims of those two goals are incredibly more convincing than MLB’s similarly stated objectives. Maybe if the league got real on the luxury tax and leveled with the union, Opening Day could’ve been saved.
