How would you setup a fair and balanced financial plan for MLB?

[gehringer_2]

2 hours ago, chasfh said:

As long as there is no requirement to spend the money on payroll—how could that effectively be proven, anyway?—at least half of the luxury tax will always be a transfer from the biggest spending teams directly into the pockets of the teams that are purposefully not spending. Who wouldn’t want to buy a business where the competition is compelled to give you money as a reward for not spending to improve your product?

IDK what the 'right' answer is. We point to the NFL as the model for parity, and the one virtue in the NFL is that good ownership wins by being good ownership, without having to worry about the other guys having more resources. The Lions have been the poster child for this - years of failure under WCF because he didn't know or maybe just wouldn't run his football team the way it needed to be run to win. Shiela comes in, cleans house, and puts a winning team on the field with exactly the same resource base. Now the question is, if you are a fan, is it any worse to live in a major market NFL city and be doomed by a bad ownership (say the NYG) or be a baseball fan in a small market city doomed because despite good management your team doesn't have the resources to compete? It's futility for the fan either way. And in at least one sense you can argue that the MLB system is better because by making fans in big markets happy more often you are making more fans happy. That is an argument, but of course that the NFL's cash flow now dwarfs MLB's that argument hasn't really proven out overall.

Edited January 2 by gehringer_2

[Edman85]

15 hours ago, gehringer_2 said:

just for context, ESPN is reporting that 9 teams are paying at total of ~$400M in luxury tax this season, led by the Dodgers with a $169M levy. 

What I didn't know about the LuxTax  is that the first 50% goes to the MLBPA pension funds, not the low revenue teams. So that only leaves about $9M per team in LuxTax revenue payments, and even that money is distributed not equally, but based on some formula by the commissioners office that rewards teams that are building their fan base. (See Wikipedia https://en.wikipedia.org/wiki/Major_League_Baseball_luxury_tax ). Basically LuxTax transfers amount to about 1 WAR of payroll per receiving team. IOW -  hardly moves the needle. 

According to the same Wiki, MLB's main revenue share system requires teams to pool 48% of their non-media income (basically gate revenues) after deducting "stadium expenses" and that is then split equally 30 ways. Very roughly, a team that sells 3M ~$50 tickets would have $75M more gross gate revenue, maybe call it $100M since rich teams probably make a bundle more on luxury boxes as well,  than a team that sell 1.5M tickets, but who knows what is left net after what the teams are allowed to deduct as 'stadium expenses'.

Be careful using Wikipedia. Best to just go straight to the CBA itself.

[Tiger337]

2 hours ago, Edman85 said:

Be careful using Wikipedia. Best to just go straight to the CBA itself.

tldr

[Tiger337]

Just looked it up now.  426 pages.  

The constitution is less than one tenth of that.  

Edited January 3 by Tiger337

[RedRamage]

On 12/19/2025 at 8:03 AM, chasfh said:

That sounds fine and all to us fans, but how would they actually manage the payrolls of currently $300MM+ teams like the Dodgers and Mets and Yankees and Blue Jays to bring them into compliance with that payroll band? Grandfathering current rosters and working toward the cap across an X year period sounds like a solution, but there is probably an entire competitive parade of horribles lurking within a solution like that, one that might disadvantage the Dodgers and Yankees on the field for some period of time, and I promise you Baseball would have explicit antipathy for that idea. That itself might be enough for them to continue rejecting the idea as being completely unworkable in the real world.

 

This would definitely be an issue, but, at least in my opinion, a rough few years of figuring out how to get to a better system is not a reason to abandon the better system... that assumes the new system is better of course.

And my idea to handle this would be to make the band huge to start with, then year-by-year close the gap. Let's say your numbers are right and the cap would be 202 and floor 181.5 for 2026 if the implemented it right away. So, instead of that let's set the cap at 352 and the floor at 101.5 for 2026.

In 2027 the cap goes to 342 and the floor to 111.5. In 2028 the cap goes to 332 and the floor to 121.5... and so on.

This gradual approach would allow for teams with super bloated salaries to have time to get some of the major contracts off the books and allow smaller market teams to ramp up their spending rather than just needing to add 40 or 50% of the payroll so throwing it at undeserving players just to meet the floor.

[chasfh]

19 hours ago, RedRamage said:

This would definitely be an issue, but, at least in my opinion, a rough few years of figuring out how to get to a better system is not a reason to abandon the better system... that assumes the new system is better of course.

And my idea to handle this would be to make the band huge to start with, then year-by-year close the gap. Let's say your numbers are right and the cap would be 202 and floor 181.5 for 2026 if the implemented it right away. So, instead of that let's set the cap at 352 and the floor at 101.5 for 2026.

In 2027 the cap goes to 342 and the floor to 111.5. In 2028 the cap goes to 332 and the floor to 121.5... and so on.

This gradual approach would allow for teams with super bloated salaries to have time to get some of the major contracts off the books and allow smaller market teams to ramp up their spending rather than just needing to add 40 or 50% of the payroll so throwing it at undeserving players just to meet the floor.

OK, but I also would also think they’d need to close the gap a lot faster than the ten or fifteen years it would take to get there under your illustrative example. I think the longer they make that period, the more likely they abandon it along the way as being unworkable or undesirable.