The New Luxury Tax Threshold Means The Top 11 Salaried Clubs Will All Be Affected In The Present + Future
Hunter Stokes (Chief Writer/Part Owner) Follow @stokes_hunter21
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With the new CBA being tentatively signed yesterday through 2021 – the lower payroll teams will finally see some steeper enforcement of higher payroll squads.
With several penalties that range up to a 90% max penalty for spending over the limit, the dollars finally make sense for the MLB to curtail a team going rogue on their payroll spending.
Under the new deal, the format will jump from a team’s AAV (Average Annual Value) limit of $189 MIL to $195 MIL in 2017, $197 MIL in 2018, $206 MIL in 2019, $208 MIL in 2020 and $210 MIL on 2021.
The penalty for a 1st year abuser went from 12.5% to 20%, The 2nd year Still remains at 30%, the 3rd season escalates from 40% previously to 50% already. Each campaign the team is over following 3 years, the team is nailed for 50% of money spent over the limit.
Additionally, the franchise will pay a fee of 12% for spending between $20 MIL to $40 MIL over the Threshold.
If a organization goes $40 MIL over, they are faced with a surcharge of 42%.
3rd time abusers will pay 45% for every dollar doled out past $40 MIL over.
This means a 1st time penalty would still spank a team to the tune of 60% if a club spends more than $40 MIL over the limit. Read the rest of this entry