A lot of discussion on the impending CBA negotiation and the concept of a salary cap is gaining momentum. Of course MLBTR’s poll is more of a fan poll. However, one of the best and most respected journalists as it comes to the business of baseball is The Athletic’s Evan Drellich. He is well connected, and is reporting that many of the owners are now ardently pushing for a salary cap.
https://www.nytimes.com/athletic/6005721/2024/12/19/mlb-lockout-2026-salary-cap/
Believe it or not, but a MLB salary cap has been an issue. Dont think it is a big issue between the Owners and MLBPA? A fight over a cap sat at the center of the ugly 1994-1995 strike, which lasted 232 days and led to a canceled World Series, and almost cost games in 2022.
IMO, if MLB/MLBPA agree to initiate a ceiling cap, then revenue sharing has to be eliminated. How many owners would be okay with LAD, NYM, NYY…spending north of $300MM every year as long as they get to keep their revenue sharing $$$, which they in turn refuse to spend on their team.
The concept will be brought up again in the next CBA negotiations, but MLBPA will absolutely say no. But, if any cap is implemented, and includes the elimination of revenue sharing, there will be too many owners who will say no as well.
Let’s continue with “what ifs”:
No penalty for teams signing a free agent.
No more Qualifying Offers.
Allow teams to trade their draft picks. They can trade their competitive balance picks now. Why not their regular draft picks?
Rules that could help MLB teams? With the increased interest in a 6-man rotation, and/or the continued management of pitchers’ innings, how about an increase in the MLB regular season roster to 27 or 28. Of course that would mean that teams would need to spend more on development, not to mention two additional players at MLB minimum on the roster. MLBPA would love this. Owners not so much.
Most of these changes are non-starters, but a change that some teams may be pushing for is a % cap on the amount of salary that can be deferred per player. What if MLBPA senses that this would change the Dodgers perspective on signing larger multi-year contracts? How eager do you think they will be the change the status quo. This could be one of those pesky compromise issues.
A salary floor has more of a chance to pass than a salary cap.
Maybe they change the rules so that posted foreign players are considered true free agents and can offer their services to the highest bidder, if that is what they want. To be honest, I do not see this as a serious problem. There are now two professional players that have come through the Amateur International rules process instead of total free agency: Shohei Ohtani and Roki Sasaki. I do not think that there was the magnitude of concern with Ohtani as much as there was with Sasaki this year. I do not like rules that are made for such a small number of potential players. How many under 25 year old Japanese or Korean players are ready to play in the US?
Throw in the potential draft of the international free agents. The owners want this, but MLBPA does not. But after the last set of negotiations, they are not as adamant about saving the current system vs a draft. MLBPA would relent if MLB compromised on another issue.
Teams and MLBPA need to be negotiating now to get a skeleton of a deal before the next deadline. The game is thriving again, and it does not need a shutdown to slow the growth of interest. Hire negotiators who are more aligned with the growth and success of MLB baseball vs the extremes on both sides of the negotiations. Extremes do not compromise, and unless the sides are truly willing to compromise, there will be a work stoppage for 2027.
List of 2024 payrolls:
https://www.spotrac.com/mlb/payroll/_/year/2024/sort/cap_total2
The MLBPA is probably the strongest pro sports union. They will fight against a cap as they always have. At some point in time, salaries will peak. What I see coming sooner than later, is that the minimum MLB salary will reach at least 1 million dollars a year.
I did not include it, but the robot umps will be a discussion as well. Although the ASB system is schedule to be tested in 2025 ST games at 13 sites (including Camelback) and ready to be tentatively semi-resolved by 2026, or at least those are the plans. The players will have a lot to say about the challenge system before being implemented in full in 2026. I can see this as being one of those decisions that is postponed until the new CBA.
Anthony Santander signs a 5 year guaranteed $92.5MM contract, with > $35MM in deferrrals. It could grow to 6 years $110MM. I would rather have the Teoscar contract.
It was reported that LAD was in contact with Kirby Yates before the Tanner Scott deal, and there are some who believe that LAD still has interest in Yates.
The Cubs offered Scott 4 years and $66MM, no mention of deferrals. If $$$ was the only consideration, all the Cubs had to do was offer 4 years $72MM with no deferrals. But we all know that $$ is not the only consideration.
Is it true that Rojas gave his number 11 to Sasaki and will wear 72?
it is true, yes
I hope Rojas’ wife gets a Porche
I hope she gets a Porsche, those Porche are just cheap knock offs
I’m already in shock. If they signed Kirby Yates also, I might never recover
I do not think they will, but I did not think they would sign Tanner Scott.
I’m also still in shock they signed Scott at the price they did.
Why?
Because historically Friedman built the bullpen on cheap options (Brasier, Vesia, Banda, Evan Phillips, etc.)
Because they’ve NEVER paid top dollar for FA relievers.
Because they’ve NEVER really paid top cost for anyone (Ohtani’s cost being mitigated by massive deferals)
Ok.
But it’s been made abundantly clear to me that money doesn’t matter to the Dodgers.
Not true at all. Money matters greatly to the Dodgers owners. They are businessmen. They aren’t running the team on a lark.
But I’m not talking about the owners, and I’m not sure you mean to be.
We are talking about Friedman. He doesn’t set the budget. He operates within it. To do so, he has, in my eyes, a process and value system in running the team that really worked amazing.
Pursue superstars hard.
Seek value everywhere.
Don’t overpay for non-superstars.
Process > Everything is my POV.
This signing broke from that process.
You know what I meant. SPENDING money doesn’t matter to the Dodgers.
But that’s not true and not the case.
If it doesn’t matter they wouldn’t seek deferrals. If it didn’t matter they would have spent more when Seager was on the verge.
It’s my contention that there are budgets. That Guggenheim run the Dodgers as a business. A unique business with long-term value more important than cashflow and whatnot.
I have this very strange feeling that the Dodgers know exactly what they are doing. They are spending money because they understand how to turn that investment into a profit. They are business men and are getting a very healthy return on the investment.
Small market teams without multibillion dollar owners shouldn’t have both low draft picks and a salary cap.
A salary cap won’t reduce the price of tickets or Extra-Innings subscriptions, or parking.
Obviously athletics are unique, but I am usually against all types of salary constraints.
If anyone cares.
Also, per Ben Badler:
The Los Angeles Dodgers today signed leftthander Adrian Torres from Panama.
For some scouts, he’s the best LHP in the 2025 international class.
I think it comes down to what some leagues consider the health of their industry. I don’t know the details of the explanation but with salary caps teams from states like Missouri, and Tennessee, and cities like Pittsburgh, Tampa Bay, OKC and Green Bay actually have a shot.
Sacrificing an individuals ability to earn his/her most? Seriously? Some of these guys make more money on shoe endorsements and selling insurance as they do playing ball. They are all doing just fine.
Butte Montana residents. That’s funny. You ever been there? I have. Scary place.
“Doing fine”?
Seriously?
“Doing fine” is subjective. “Doing fine” is irrelevant. They should be doing as well as possible.
Everyone should. Nobody should be denied that.
Who gets to decide, in your paradigm, how much is enough and can be dismissed with a hand wave and a “just fine”?
Yeah, a good friend lives in Montana. We used to go up there before kids came into our lives.
Come on man. They all ARE doing as well as they can. They are making millions. I don’t hear any of them complaining.
There are places in Montana that are beautiful. Butte isn’t one of them.
We live in a society that values entertainment above all else, therefore the big bucks.
@Badger This is my point you are making. The players ARE doing as well as they can. Don’t change it.
@Cassidy
It’s not that.
It’s that there are so few people who can throw a ball like Snell or Ohtani. Very few. Like count on 1 or 2 hands few.
Plenty of finance, tech and law professionals make that much money. They don’t entertain.
Don’t feel sorry for any of them. Even if a harcore salary cap were put into place, the majority of players would still earn more than most people will ever in their entire life.
How many people will even earn 1 Million dollars in their lifetimes?
I say institute a hardcore draconian salary cap. No player can make more than 250 million dollars, and no contract can exceed 7 years in length. Deferrals are unimportant IMO. If you don’t like it….GO PLAY FOOTBALL.
Just MO
The idea that skills at one sport translate to another at the same level is laughable
I know, the whole “go play football” was a joke said in tounge and cheek.
Bluto, would you be more amenable to a team cap instead of a player cap? Say, $300,000,000 plus annual inflation increases?
No, a team cap is a player cap.
It’s a restraint.
Is there a cap on how much an owner can sell his/her/their team for? Is that being proposed?
Don’t feel sorry for the billionaires either
From the article Jeff posted above.
“We have now got billionaires buying teams in all sports. That’s what’s changing,” Boras said. “You’re going to have not one person buying it. You’re going to have multiple people, contingents buy it. … The prior generation of owners will receive massive wealth from that.
“It is a billionaire business. It is not a local, regional-shop business anymore, and that, I think, is the adaptation we have to look at. Not the rule structure of the game and how we work. We all know what cap systems have brought in other sports, and frankly, it’s not been particularly exciting.”
We all know what cap systems have brought in other sports and it’s not been particularly exciting? The NBA isn’t exciting? The NFL isn’t exciting? Up yours Bora$$. You and your billionaires, a pox on all your houses.
With Tony Clark’s statement- “we will never agree to a cap”, baseball has a tug of war going on between a handful of billionaires and a small group of organized millionaires with fans paying for all of it.
“For greed, all nature is too little”. Lucious Annaeus Seneca
I don’t know where all of this is going but I do know there’s a stench in the air. This is different. All of it.
As salary’s climb, the average fan will not be able to afford going to many games. Back in the day, I went 10-15 times a year because I could sit in the pavilion for a couple of dollars. Parking was a lot cheaper than too. It is much cheaper for me to pay the 100 dollars for the entire season, with a discount for being a veteran, than it is to even attend one game at Dodger Stadium. That is one reason that the last time I was out here during the season, rather than go to Dodger Stadium, we went to Rancho and watched the kids play. Just a ticket, parking, a beer and a couple dogs will run you 100 bucks. Far too rich for someone like me on a set income.
So, I find this interesting.
personally? I’m not a huge fan of going to games. Parking and traffic.
baseball is pretty good to follow on the computer or TV. Football is arguably perfect for TV.
But should going to a game be for every fan? Young kids don’t care. Would they if it were cheaper?
Stadiums are increasingly in suburbs, harder to get to. Kids are online or playing video games. Both arguably more fun.
What is the downside to making “going to games” a more exclusive or special event?
Will it impact future fans?
https://www.mlb.com/press-release/press-release-mlb-finishes-2024-season-with-highest-attendance-in-seven-years#:~:text=MLB.TV%20set%20a%20new,days%20taking%20place%20in%202024.
Viewing just keeps going up. When you make money off of addicts, keep feeding them.
I tend to agree, but it’s interesting.
We’re signing Kirby Yates!
He was spectacular last yr but kind of unnoticed.
The Dodgers and reliever Kirby Yates have reached a “tentative” agreement, reports Bob Nightengale of USA Today.
Wow! This is getting ridiculous. I think the Dodgers have half their BP with closer capabilities.
AF definitely doesn’t want to be subject to trade deadline BP acquisitions. Again, another strategy lead by the best front office in baseball. Buy now and get what you want (need) and not be forced into a typically strong sellers market at the deadline for relievers. It’s spending money as opposed to trading top prospects.
Well now I’m pissed AF didn’t get Burnes and Williams!
Cassidy, you have every right to be! Lol.
Nightengale has also reported that Kopech has suffered an undisclosed injury and might miss the first month of the season, hence the Yates signing.
Yates isn’t the greatest signing as he’ll be 38 in March and has been injury prone and has a high walk rate. They can’t be giving him much money; probably an ‘I want to win a ring before I retire’ signing.
My bad, thinking of someone else! Yates had a great season last year; 1.17 ERA!
Disappointed in AF bring asleep at the wheel and missing out on Santander.
There’s a big trade brewing….
Who was it, a couple of years ago in the Dodgers’ front office, that said “We’re going to be pigs” in regard to signing top players? Maybe this is the year that fits that quote. Are they done now? Who Knows? Nothing surprises me any more.
Kopech had “forearm issues” during the post season but was given the go-ahead to pitch through it.
Not sure if that’s the same problem they’re referring to now and they just want to have him rest it for a while longer, something similar to what Glasnow went through last year.
Or………………………we could hear later today that Kopech will be having TJ. Not something the Dodgers would have likely shouted from the highest rooftop while trying to sign more relievers.
Looks like Kopech will miss the first month of 2025.
Relievers ended up shouldering 60.8 percent of the postseason innings, playing a pivotal role in the team’s championship run.
With the addition of Yates, the Dodgers’ payroll is now projected to surpass $380 million.
At what point after exceeding a $300M payroll is a team foolish for not shoreup any and all weaknesses. The Dodgers will face at least two deep great pitching in the playoffs and can’t afford to lose a game in the late innings after spending as much as they have.
Was refreshing my memory with watching some Kirby Yates highlights. Sure looked good last year. Got one of the best splitters I’ve ever seen. How can one not think this is the best Dodger team ever, I sure think it is. If everyone stays healthy be hard not to repeat. I can’t wait to watch this team play. It’s going to be fun. The season can’t start soon enough for this kid
I’m trying to come up with a ballpark number on the amount of luxury tax we will owe at the end of 2025.
My problem is I don’t know if we will be taxed and a 50% rate, a 60% rate or 110% rate on the dollars over the Luxury Tax Threshold. And I can’t seem to find the answer online anywhere.
Maybe some of you guys more versed in this area can coach me up.
Being over the CBT threshold for 3 or more consecutive years puts
us in the 50% tax bracket.
There’s also a surcharge threshold for clubs that exceed the base threshold by $60 million or more: a 60% surcharge.
So were both taxes in effect that puts the Dodgers penalty at 110% of any payroll over $237 million in 2024?
Is that how we got to a $103 million tax bill?
I see tax numbers for the Dodgers in 2024 of $340 to $353 million.
So the luxury tax threshold for 2025 is $241 million. The Dodgers’ payroll is projected to surpass $375 million in 2025 or $134 million over the threshold.
So is that taxed at 50%, 60% or 110%?
This gets expensive in a hurry not that the Dodgers give a rat’s ass.
Clubs that are $40 million or more above the threshold shall have their highest selection in the next Rule 4 Draft moved back 10 places unless the pick falls in the top six. In that case, the team will have its second-highest selection moved back 10 places instead. I assume the Dodgers will be subject to this penalty as well?
Help
Phil, the current luxury tax for the Dodgers (pre Kirby Yates and Clayton Kershaw) is $123.5MM.
You can find the estimated luxury tax here:
https://docs.google.com/spreadsheets/d/1YX_O-LZuYfE9n8u3s3EICLAjp1hixwovsrTIJaaAXng/edit?gid=1520401900#gid=1520401900
Apparently this is not a sufficient enough of a deterrent to slow down the spending. The problem is not just this year. For 2026, the Dodgers are already committed to $283.6MM for only 12 players. They are at $273.1MM for 2027 for 11 players. We do not know what the luxury tax will be in 2027.
Thanks Jeff. That’s quite a table loaded with information.
Line 62 on this table, the Competitive Balance Tax Threshold numbers
and 64, the projected CB Tax %, I think answers my question. That one shows the rate of 110%.
That would indicate that the answer to my questions is YES, the 50% Tax is in effect as well as the 60% surcharge, to get to 110% for 2025.
Am I reading that right?
Yes you are.
The surcharge is as follows:
$20MM – $40MM > CBT Threshold ($241MM this year) has a 12% surcharge.
$40MM – $60MM > CBT Threshold has a 45% surcharge
Everything $60MM or more > CBT Threshold has a 60% surcharge.
So every LAD contract henceforth will have a 110% lusury tax.
“This gets expensive in a hurry not that the Dodgers give a rat’s ass.”
That’s what I’ve been trying to say.
Sasaki cannot be signed until Thursday. With Yates being signed, someone will have to be cut from the 40-man. Grove seems like a likely candidate.