Atlanta Braves don’t consider the CBT a barrier to adding players
Atlanta Braves payroll will exceed the first tier of the competitive balance tax in 2023 for the first time, but it could cost more than money.
Three weeks ago, I wrote that the Atlanta Braves looked poised to thunder past the first competitive balance tax threshold in 2023, a prediction supported by a story in yesterday’s Atlanta Journal Constitution.
Justin Toscano’s report repeated the numbers you’ve seen here and said that the Braves were already working on ways to manage the impact.
Internally, the Braves . . . don’t see the threshold as a hard-and-fast limit . . . the penalty for first-time offenders – a 20% tax for the overages – isn’t seen as debilitating.
Owners understood that taxing teams who surpassed the tax thresholds wouldn’t deter teams with deep pockets. After all, if you’ve spent $233M and remained below the second tier, the cost is only $4M, which is pocket change to a Major League team.
To deter owners with deep pockets, MLB added other, non-monetary, penalties to restrain the richest from crushing the less-wealthy teams with the weight of their checkbook.
CBT limits and penalties
The new, and as yet unpublished, collective bargaining agreement changed the way the CBT is calculated, the tax brackets, and penalties. The payroll level for each bracket increases each year.
| Tier | 2022 | 2023 | 2024 | 2025 | 2029 |
| 1st | $230M | $233 M | $237 M | $241 M | $244 M |
| 2nd | $250 M | $253 M | $257 M | $261 M | $264 M |
| 3rd | $270 M | $273 M | $277 M | $281 M | $284 M |
| 4th | $290 M | $293 M | $297 M | $301 M | $304 M |
Tax penalty percentages go up when teams are CBT payors in consecutive seasons.
| Tier | 1st-time payor | 2nd-time payor | 3rd-time payor |
| 1st | 20% | 30% | 50% |
| 2nd | 32% | 42% | 62% |
| 3rd | 63% | 75% | 95% |
| 4th | 80% | 90% | 110% |
The new CBA also includes a progressive surcharge for significantly exceeding the basic tax level. Teams that exceed the first-tier tax level by:
- $20 million to $40 million: 12% surcharge
- $40 million to $60 million: 42.5 % surcharge for the first year; 45% for each consecutive year after that, and
- Have their highest selection in the next Rule 4 Draft moved back 10 places
- A pick in the first six is protected; team’s incurring this penalty with a top-six selection will have the second-highest pick moved back 10 spots.
- $60 million or more: 60% surcharge
But wait, there’s more!
The qualifying offer penalty
Had MLB and the MLBPA agreed on an international draft, the qualifying offer (QO) would have ended, but to no one’s surprise, they didn’t agree, so the QO and its draft-pick-penalties for signing a player who rejected a QO are still in play.
Beginning in the season after a team becomes a CBT payor, signing a player who rejected a qualifying will cost the team one or more selections after the first round of the next year’s Rule 4 Amateur Draft.
Teams are divided into three levels of forfeiture based on the team’s financial status.
- Teams that exceed the CBT in the prior year lose their second and fifth selections and $1M from their international bonus pool.
- If the same team signs a second player with a QO, it also forfeits its third and sixth draft picks.
- A team receiving revenue-sharing money loses its third-highest selection. If the team signs two, it loses its fourth pick as well,
- Teams not included in the first two tiers lose their second-highest pick and $500K from the international bonus pool.
- Signing a second player costs the team its third-highest pick and another $500K of international pool money.
The Atlanta Braves traded away or graduated some of their best prospects over the last two seasons. Winning the division pushes them toward the back end of the first round already makes it difficult to select from the best prospects; losing early selections and international pool money makes restocking the minor league system even more difficult.
An Atlanta Braves example
Numbers and lists of penalties can get confusing; here’s an example of the way the rules might affect the Braves.
Fangraphs projection of the Atlanta Braves CBT payroll commitment for 2023 at $227.9M, including estimates for arbitration and minor league salaries, and the team’s contribution to the player benefits plan, pre-arb player bonus pool, and 26-man payroll.
What would happen If the Braves were to bring Dansby Swanson back for the MLBTR estimate of seven years and $154M, an AAV of AA’s favorite contract amount, $22M, and added a RHH left fielder for one year and $10M.
To keep it simple, I’m rounding the Fangraphs’ estimate to $228M and saying that the team will create roster space by designating minor-league players who would make the league minimum of $720K.
Gory payroll numbers
The Braves CBT payroll would increase to $258.6M, putting the team above the second tier and more than $20M above the first CBT tier. According to an AP story in early September, the Braves are first-time payors, so they would pay:
- A 30% tax on their $25.6M overage ($7.68M),
- A 12% surcharge ($3.07M because they exceeded the basic threshold but more than $20M, and
- Have their first pick in the 2023 Rule 4 draft moved back ten picks, i.e., from 20 to 30.
That example shows why they want to stay under $253M. The Braves’ success comes from building a strong farm system, which makes a lower draft pick as impactful as the extra $7M they pay because they passed the 253 mark.
It’s also doubtful that the club signs a player who rejected a qualifying offer because losing two draft picks and $1M in international pool money hit at the heart of rebuilding the farm system.
Can the Atlanta Braves Lower payroll?
The Braves have few moves available to lessen the impact of those theoretical signings. Trading Manny Piña makes sense because the d’Arnaud-Contreras tag-team works so well, he’s out of options, and he’s a well-thought-of catcher in a market that needs them.
However, Eric wrote about the Braves’ interest in Sean Murphy, so it’s possible they could trade Pena and d’Arnaud and acquire Murphy to save about $9M. I doubt it happens because Murphy will bring the Athletics more from other teams than the Braves are likely to offer, but why would you check on him if it wasn’t an option?
That’s a wrap
The Atlanta Braves face the hardest part of becoming a perennial championship contender, rebuilding the farm system with enough high-ceiling talent to add depth while keeping the 26-man roster manned with championship-caliber players,
Next. Is Mikey the real thing?. dark
Fans clamored for the Braves to open the checkbook, and when the time was right, they did. Now comes the hard part.