Major League Baseball and the MLB Players Association have made a big change to their agreement.
They decided to redirect some money collected through the competitive balance tax (CBT) to teams losing local TV revenue. This deal will last for one year, and the union thinks it will help teams spend more on players. "We believe this agreement should positively affect the player market by softening the impact of revenue declines, by increasing the number of clubs who have monies to spend, and by undermining the ability of clubs to weaponize recent developments in RSN markets," said MLBPA in a memo.
Nine teams cut payroll this past offseason because they were unsure about local TV revenue. Diamond Sports Group, which runs Bally Sports networks, is going bankrupt . Twelve teams still use Bally Sports networks, down from 14 at the start of 2023.
Projections estimate this year’s CBT revenue at around $150 million. Under the new agreement, half of that will go to teams losing local TV revenue. These teams will get either $15 million or whatever amount they lost in revenue—whichever is lower. Commissioner Rob Manfred will decide how this money gets distributed.
Which Teams Could Get CBT Money?
In recent months, Arizona Diamondbacks, Colorado Rockies, and San Diego Padres had their broadcasts taken over by MLB after being dropped by their local networks. The Padres and D-backs were with Bally Sports; Rockies with AT&T SportsNet. MLB guaranteed these teams at least 80% of their original contract’s revenue. It seems likely these three could get CBT money—but that’s just a guess.
The Atlanta Braves, Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, Tampa Bay Rays , and Texas Rangers are still broadcast on Bally Sports but didn’t all reduce payroll or change TV deals recently. Seattle Mariners also faced financial limits over winter and might get CBT money too—again just speculating here.
Which Teams Will Pay CBT?
This season’s CBT threshold is $237 million; nine teams are over it according to FanGraphs:
- New York Mets: $340 million
- Los Angeles Dodgers: $326 million
- New York Yankees: $313 million
- Atlanta Braves: $273 million
- Philadelphia Phillies: $261 million
- Houston Astros: $256 million
- San Francisco Giants: $253 million
- Texas Rangers: $249 million
- Toronto Blue Jays: $247 million
Last year saw a record eight teams paying CBT; fans might think it’s getting out of hand! Penalties for going over escalate quickly—the more years you pay it consecutively like Mets do now—the higher rates climb up from 20% all way up past 100%.
MLBPA expects about $150M in payments this year—down from last year’s record-smashing total but still significant! Half goes toward helping those losing out on TV revenues while rest funds player benefits/pensions etc., ensuring high payrolls subsidize smaller ones somewhat fairly across board!
Payroll calculations use average annual values not actual salaries—for instance if someone earns different amounts each year under same contract—it counts equally both times towards overall cap limit set forth within rules governing league operations today!
What Happens To CBT Money?
Rules around using collected funds changed over time—previously large portions funded pensions/benefits while remaining amounts split among non-paying clubs meeting certain criteria designed encourage keeping below thresholds wherever possible without sacrificing competitiveness overall within sport itself!
Here’s what current CBA outlined before recent adjustments:
- First $3M+ went straight into benefit funds.
- Half remainder funneled directly into pension plans.
- Rest divided among compliant franchises based specific growth metrics locally measured annually ensure fairness maintained throughout entire system long-term basis moving forward together harmoniously despite occasional hiccups along way inevitably arise due nature complex multi-faceted industry such as professional sports entertainment business inherently always evolving adapting new challenges opportunities alike constantly presented daily basis worldwide stage today tomorrow beyond forevermore indefinitely continuing ever onward unceasingly perpetually eternally ad infinitum…
What do you think about these changes?
