The Atlanta Braves are a bit of a unicorn in the game of baseball. They spend plenty of money, but are never cited as one of the big spenders that are apparently ruining baseball. They don't have the best farm system, but their minor league ranks continue to churn out big leaguers, and that remains an organizational focus. In an era when it feels like teams are trying to find more and more ways to cut costs (besides the Dodgers and Mets, anyway), the Braves have been building a real estate empire in addition to a sustainable contender. Oh, and the Braves have been doing all of this while also being MLB's only publicly traded team in the US.
Being publicly traded means that the Braves have had to be much more transparent than other teams when it comes to their finances. For the most part, that has proven to be perfectly fine for Atlanta as they have gotten to brag about all the money they are making with little in the way of downsides.
However, it sounds like that could be changing soon. Amidst a report on the Braves' latest announcement of surging revenues, The Athletic's Evan Drellich noted that the Braves could be the only team in the league that could have to pay a hefty tax bill if no changes to the law happen, and that could be a problem.
Braves' status as a publicly traded US company could mean they are about to be stuck with a hefty one-of-a-kind tax bill
According to the report from Drellich, the Braves' publicly traded status seems to put them in line to pay a new tax due to a recent tax law change that limits how much publicly traded companies can deduct from highly paid employee salaries. While the law was likely written targeting CEOs who are getting huge compensation packages, MLB player salaries appear to reach the threshold as well.
Normally, you would see the team or MLB be able to get an exemption for players. However, a difficult political landscape has made the Braves' attempts to be grandfathered in unsuccessful. There is still time for fixes to be made, but right now, it seems like the Braves may have to pay as much as $19 million or more starting next year in new taxes.
As the only team in baseball that would be subjected to such a tax payment, that could put the Braves at a significant financial disadvantage. $19 million a year won't make-or-break the team per se, but it is enough money that future payrolls could be more restricted and organizational investments could be pushed further down the line.
Fans shouldn't be too concerned just yet, however. Upcoming CBA negotiations could bring about changes to accommodate publicly traded teams like the Braves and limit the impact of these new tax changes. There is also a chance that Congress will make changes that allow Atlanta to operate normally. However, the trend right now is towards another hefty expense amidst declining TV revenues, and that may not end well.