I Would Like to Talk About the Report on MLB’s Willingness to Finally Move on the Luxury Tax

I’ve been thinking about Ken Rosenthal’s late-night report for a while. It dropped after the players’ latest proposal, which was publicly shat upon by an MLB spokesperson, which sent me spiraling into confident despair about just how long we’re going to be without baseball.

Here’s the report:

Rosenthal’s report gets very specific on what his sources (“people with knowledge of the league’s thinking”) say MLB would want in order to move on the luxury tax: “For the league to move closer to the union’s desired thresholds, which start at $238 million, it would want a variety of adjustments, including a pre-arbitration bonus pool lower than the union’s latest proposal of $80 million and sharp penalties for teams that exceed the thresholds by the highest amounts. Perhaps most important, it would want the union to accept a streamlined process for implementing rules changes beyond the 2023 season.”

I find this report more interesting than most of its kind because of the timing and the reporter.

Let me try to explain my thinking.

There are any number of explanations for why this is coming out, though I could speculate that the most plausible is it is originating with a frustrated owner or group of owners that have had trouble getting other owners to move. If so, they were probably hoping the players moved more so that they could have a good reason to lean on those reluctant owners to finally move on the luxury tax.

Since that didn’t happen, this group of owners are frustrated – with the players, yes, but with their own group, too – that they feel like the negotiation is increasingly out of their control. So that would be an explanation for why this winds up in the hands of a reporter who has definitely NOT been a mouthpiece for ownership this offseason (heck, Rosenthal got bumped from MLB Network for MILDLY criticizing Rob Manfred!).

Also, I trust Rosenthal implicitly when it comes to CBA-related reporting. That means I believe there are indeed very high-level MLB sources (gotta be owners) who are accurately describing MLB’s bargaining position behind the scenes. The owners are ready and willing to move on the luxury tax thresholds if the players moved first on dropping the pre-arb bonus pool, agreeing to more unfettered rules change ability after 2023, and sharper penalties for the third tier of the luxury tax.*

Does any of that *matter* though? For one thing, if you’re the players, are you trusting anything that leaks from ownership these days? Would you actually move on your bargaining positions without a counter from owners beforehand? How could you bid against yourself on the basis of a single report? You couldn’t. And I’m sure the source(s) for this report know that, and, again, are frustrated.

I guess the other thing I’d add on this report is that we don’t know to what extent the source(s) are getting into the nittiest of grittiest of details on what exactly they’d want from the players. What about the playoff setup? The draft? The minimum salary? And critically, what about the RAISES in the luxury tax over the years of the CBA? In other words, it could be true that these sources believe that first year and first tier of the CBT could move if the players did X, Y, and Z first (of which only X and Y were mentioned to Rosenthal). But how do we know that’s enough for the players to actually do the things the owners want?

So I come back to the place I’ve been increasingly landing: it isn’t the *players’* problem that Manfred and the owners cannot get their side on the same, reasonable page. And it CERTAINLY isn’t the *fans’* problem. I do not have any sympathy for frustration on that side, to the extent it exists. There was clearly a group strategy not to make even remotely reasonable offers back in November, and then six weeks of lockout passed before an offer was even made. What’s happening now is the byproduct of those group decisions to delay. Everyone on the MLB side has to own that part.

Thus, it’s up to the owners – however many of them Manfred can get on board – to make the first big move. It has been for MONTHS. The players *have* made dramatic concessions. They are not seeking the kind of fundamental overhaul to the compensation system that a lot of us outsiders believed was appropriate to seek. The owners have yet to make one, single, solitary move that made me go, “oh, hey, that’s actually really significant!” Not once during this lockout that they initiated to “spur negotiations.” The only thing I could even point to as reasonable thus far is the minimum salary bumps. I don’t think they’re quite enough, but I do think they are at least a reasonable level to be offering. Certainly far from a big move, though.


*(A side note on the report: it mentions that the league would want “sharp penalties for teams that exceed the thresholds by the highest amounts,” a reference to the highest tier of the luxury tax. Here’s the thing, by accepting the non-monetary penalties yesterday – a big give by the players, despite MLB’s claim to the contrary – that top tier DOES HAVE sharp penalties. At last check on the offers, exceeding the third tier of the luxury tax would not only reach the highest tax level, it would cost the team its FIRST and SECOND round picks. I can scarcely think of a team that would not treat that tier, at that point, as the hardest of hard salary caps. So what the heck else does the league want? A higher tax rate, I guess? Fine. Whatever. Who cares at that point, if you’ve already said yes to the extreme draft pick costs?)

written by

Brett Taylor is the Lead Cubs Writer at Bleacher Nation, and you can find him on Twitter at @BleacherNation and on LinkedIn here. Brett is also the founder of Bleacher Nation, which opened up shop in 2008 as an independent blog about the Chicago Cubs. Later growing to incorporate coverage of other Chicago sports, Bleacher Nation is now one of the largest regional sports blogs on the web.

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