The MLB – Players Association talks before Tuesday’s deadline to play all 162 games (which wasn’t met) revolved around several things, like minimum salary, expanded playoffs, the bonus pool for pre-arbitration players, and the draft lottery, mainly.
Perhaps the most important one, however, was the competitive balance tax (CBT).
The CBT is baseball’s version of a salary cap: it’s not a hard cap that can’t be exceeded, but the penalties for teams who do pass it are harsh and involve millions of dollars.
For the 2021 baseball season, the CBT threshold was set ay $210 million, and only a handful of organizations exceeded it.
It remains one of the toughest items on the negotiation agenda.
The Scenario Looks Complicated
MLB insider Andy Martino of SNY explained the situation.
“Regarding the CBT threshold, a person at Feb. owner meetings says there was a contingent that wanted it to “not go up one penny” from $210 million. Manfred/Halem got it up to $220 in “best and final” offer but players need at least $230. Tough one,” he tweeted.
Regarding the CBT threshold, a person at Feb. owner meetings says there was a contingent that wanted it to "not go up one penny" from $210 million. Manfred/Halem got it up to $220 in "best and final" offer but players need at least $230. Tough one.
— Andy Martino (@martinonyc) March 3, 2022
“A club exceeding the Competitive Balance Tax threshold for the first time must pay a 20 percent tax on all overages. A club exceeding the threshold for a second consecutive season will see that figure rise to 30 percent, and three or more straight seasons of exceeding the threshold comes with a 50 percent luxury tax.”
As a result of those penalties (which the owners somehow wanted to increase before finally dropping their request late in negotiations) most owners are afraid of the CBT.
They want it as low as possible, to pay less in salaries.
Players, naturally, want it to be much higher so they have a shot at better contracts.
Owners will hardly improve their $220 million offer and players won’t go lower than $230 million.
It’s definitely something that could keep delaying an agreement.