- MLB insiders are reporting MLB will propose a $100 million salary floor for team spending
- This proposal will include new tax tiers on teams spending $180 million or more, with the higher luxury tax being used to help teams meet the $100M floor
- Currently, there are 12 MLB teams spending less than $100 million this season and 7 teams spending over $180 million
- Read more BroBible articles here
The 2020 World Series between the Tampa Bay Rays and Los Angeles Dodgers saw the largest payroll gap in World Series history. The Dodgers had a team payroll of $107,917,397 compared to the Rays who spent $28,290,689 in 2020.
Before facing the Dodgers who had the #2 highest payroll in MLB last season, the lowly Rays faced the Yankees (#1 overall, $111,939,081) and the Houston Astros (#5 overall, $82,536,161). The 2020 MLB season was only 60 games, hence why those payrolls look A LOT smaller than normal.
Ken Rosenthal and Evan Drellich are reporting a proposed MLB change that would bring the salary floor up to $100 million. It would also introduce a 25% tax on spending over $180 million with three additional tax brackets. Presumably, those taxes from the Dodgers, Yankees, and Red Sox would help the lowly teams like my Tampa Bay Rays spend more.
MLB has proposed a $100M salary floor and stiffer luxury taxes.
Luxury taxes would help support lower payroll teams to meet the floor, with a penalty presumably being levied on teams that still don't spend the minimum. pic.twitter.com/DDpO4Y67r3
— Front Office Sports (@FOS) August 19, 2021
— Ken Rosenthal (@Ken_Rosenthal) August 18, 2021
Here’s the rundown from Anthony Franco at MLB Trade Rumors:
“MLB’s proposal included a lower threshold for taxes on team spending, with teams subject to a 25% tax on any spending above $180MM, report Drellich and Rosenthal. There would be three additional tax brackets at some point above that mark (for a total of four tax brackets), with the tax rate increasing as teams hit those higher overage levels. As a trade-off, MLB proposed that teams be subject to a $100MM salary minimum. MLB’s entire proposal was presented as a package deal as opposed to a series of one-by-one potential provisions.”
MLB doesn’t have a proper Salary Cap, it has the Luxury Tax which acts as the Salary Cap. The Los Angeles Dodgers have a 2021 payroll of $267,441,309. The Luxury Tax hits the overages of certain thresholds (20% from $210 to $230M, 32% from $230M to 250M, and 62.5% over $250M). So this would upend the current structure but wouldn’t be a complete departure from how baseball regulates spending.
MLB has proposed the $100 million salary floor for teams.
Here is the current Active Payroll for the MLB teams currently under the 100 million mark. pic.twitter.com/cMbq0nLaaq
— Tyler Wilson (@KingOfBuffalo) August 18, 2021
Only 7 teams are under the $100 million. It's an artificial proposed floor. Meanwhile, the 1st tax threshold decreases from 210 to 180.
Players need to dig their heels in come December 1. https://t.co/Sdde5hzv98
— Jeff O'Connor (@JeffOConnor) August 18, 2021
Most teams already treat the current CBT threshold ($210M) as a hard cap. Can't see the PA going for it with the trade-off being a subsidized $100 million floor that 1) any ownership group could hit if it wanted to & 2) doesn't actually guarantee parity/competition/non-tanking.
— Gary Phillips (@GaryHPhillips) August 18, 2021
I’m not sure the Tampa Bay Rays have ever spent anywhere close to $100 million in a season. The Cleveland Indians are only spending $48 million this year! The Orioles are only spending $52 million, the Pirates $54M, and the Marlins $57M. For these teams to suddenly start spending double would mean A LOT of very average major leaguers would need to get paid asinine sums of money overnight.
For more on this reported proposal of the $100 million floor, you can head on over to MLB Trade Rumors.