Four franchise owners voted against the last proposal Major League Baseball submitted to the MLB Players Association on Tuesday, according to SNY's Andy Martino. The Athletic's Evan Drellich identifies the four owners: Bob Castellini (Reds), Chris Ilitch (Tigers), Ken Kendrick (Diamondbacks), and Arte Moreno (Angels).
When the union unanimously rejected the league's proposal, commissioner Rob Manfred made good on a preexisting threat by canceling the first two series of the season, thereby ensuring the owner-imposed lockout would leak into a third month.
Per Martino's sources, even more owners would have joined the "nay" side if the league's proposal offered a Competitive Balance Tax threshold higher than $220 million. As Martino and Drellich note, that could prove to be an issue heading forward, given that it takes only eight "no" votes to derail the ratification of a new CBA.
Drellich also notes MLB tried to include standard expenses such as per diem meal money into the CBT payroll calculation, which would artificially lower the threshold since less money could be spent on player salaries. That did not sit well with the MLBPA. From Drellich:
One of the league's efforts that irked the players was a proposal to incorporate meal money and the stipends players receive into the luxury-tax calculations. MLB, in other words, wanted to count the amount of money players receive for food against the amount of money teams can spend before they are taxed.
The luxury tax already includes some player benefit costs — it's not just a strict accounting of player salary. But players were angry, sources said, the league would try to add something as fundamental as the cost of food as a reason to spend less on payroll. MLB also tried to include stipends paid to players who participate in the All-Star Game, the Home Run Derby and other special events, sources said.
Earlier this week Blue Jays pitcher Ross Stripling said MLB tried to sneak things into the fine print of their latest proposal. "They did exactly what we thought they would do. They pushed us to a deadline that they imposed, and then they tried to sneak some shit past us at that deadline and we were ready for it," Stripling said.
Among the four teams whose owners voted against MLB's latest proposal, only the Angels came anywhere close to the $210 million CBT threshold in 2021. They finished the season with a $199.0 million payroll for CBT purposes. Anaheim regularly hands out large contracts, though Moreno's unwillingness to exceed the CBT threshold hamstrings the front office as it built the rest of the roster. The Angels have made the postseason once in Mike Trout's 10 full seasons.
Ilitch took over as the Tigers' control person from his late father, Mike, in May 2017. Since then Detroit has started a rebuild that saw the team slash payroll from $199.8 million in 2017 to $80.9 million in 2021. The Tigers signed Eduardo Rodriguez and Javier Báez to long-term deals prior to the lockout, though their projected $133.4 million payroll in 2022 is still well south of the payrolls the team ran when Mike was the control person (averaged $190.6 million for CBT purposes from 2013-17).
"Well, I'm supposed to be a good boy and not go over (the CBT threshold), but again, if I'm gonna get certain players that can help us a lot, I'm going to go over it," Mike Ilitch, who passed away in Feb. 2017, told ESPN in Nov. 2015. "Oops, I shouldn't have said that."
Drellich cites "three people briefed on an owner-wide call held this week" in identifying the four owners who voted against MLB's latest proposal, and the motivations behind the leaks are unclear. Are others in the ownership ranks trying to pressure those four into supporting a proposal with a higher CBT threshold? Is this an attempt to embarrass commissioner Rob Manfred, who has obviously failed to unite ownership to this point and is not universally beloved even within MLB's walls?
The CBT has become a hot-button topic in negotiations for reasons that CBS Sports explained elsewhere. The short version is that the CBT was originally introduced as a luxury tax, but owners have since bent it into a salary cap. While there's no evidence that either improves parity, both are proven to be effective tools of wage suppression. Few teams have shown a willingness to exceed the CBT, and even fewer have dared to cross the threshold on a consistent basis. By any honest analysis, the hardliners are treating breakaway spending as an existential threat when it is not.
"We look at the competitive balance tax as a breakaway spending mechanism. That's how this thing was originally negotiated, and we're not seeing that function as breakaway spending. We're seeing it act as a salary cap," MLBPA executive subcommittee member Max Scherzer said earlier this week. "No better way can that be shown -- point blank, plain and simple -- than the San Diego Padres having a higher payroll than the New York Yankees."
The league's proposal would have set the lowest tax threshold at $220 million and then increased it to $230 million by the end of the CBA in five years. The union, conversely, proposed setting it at $238 million and eventually topping out at $263 million.
If, as Martino reported, four owners were against raising the CBT higher than $220 million, then the league could have trouble securing enough votes to pass a new CBA if they so much as meet in the middle and agree to set next year's number around $230 million.
Of course, that's a problem for Manfred, the league, and the other owners to figure out -- not the players. A new CBA could include an expanded postseason and the introduction of advertisements on helmets and uniforms, a combination that could generate more than $200 million in additional revenue. The league could then create an even greater windfall by making deals in the streaming and broadcast arenas.
In other words, there's plenty of money waiting to be made in a new CBA -- provided, that is, Manfred and the rest of the owners can convince four-plus parties they're seeing ghosts.
