Baseball in the Future, Tense

Image credit: © Brad Penner-Imagn Images

Now, don’t get the wrong idea here, but there are some MLB teams that actually do try to win. Maybe not as much as they truly could, but compared to a huge chunk of the league, they’re practically giving it their all out there. The 2023 season featured eight teams that surpassed the luxury tax threshold, and the 2024 season, while final, official calculations aren’t available yet, looks like the number of penalized teams will be right around the same mark.

The Mets, already well over that threshold, signed Juan Soto to a deal that will pay him $51 million per year, and if it took offering him a $1 billion contract to get him into the orange and blue for the long haul, maybe Steve Cohen would have printed up that contract, too. The Dodgers, who won the World Series in 2024, are still spending and spending, in a way that made quite a few fans and analysts lose their minds. This is all happening while about one-third of the league worries about their broadcast revenue streams, in the wake of Diamond/Bally/Fanduel Sports Network emerging from bankruptcy court with a plan that might have resulted in paying all of those teams less going forward. At least, the ones that stuck with the RSN, anyway: some went to MLB, and we already know they aren’t pulling in quite as much, not through these individualized streaming plans being sold.

There is always a tale of haves and have-nots in MLB, and it’s always exaggerated. That it exists and persists, though, tells us that, as fictional as it might be, it’s a fiction that the league as a whole has been willing to put out there for good reason. Let’s rewind to 2019, for a moment, and a piece of mine from Deadspin titled “How MLB’s Luxury Tax Became A Salary Cap Because Of Decades Of Failures,” and this section in particular:

And teams are avoiding going over the tax: just eight clubs have ever even paid the competitive balance tax since it changed to the 2003 model; in 2018, only the Red Sox and Nationals did. There was still incentive to spend heavily, even if it was below the tax, during most of that period, but that’s because teams like the Yankees and Dodgers (and the Red Sox) were, if not ignoring the tax outright, not overly concerned with paying it. Now, though, with the Yankees publicly saying they don’t want to go over the luxury tax for obviously bullshit reasons they hope you’re not smart enough to understand, and the Dodgers putting together a five-year “let’s avoid the luxury tax” PowerPoint for investors, there’s less incentive for other clubs to go big on free agency. If teams know that they aren’t competing against the heavyweights, they can compete with each other at a lower level. The three biggest spenders in the game are already essentially out on Bryce Harper and Manny Machado, two of them because they’ve told you with their actions (and sometimes their words), and the Red Sox because they already crossed the brand new penalty marker once and are less than a Bryce Harper contract away from doing so again.

The luxury tax is an arbitrary anchor point, and if the Yankees and co. are defining “Yankees money” as a level below that tax threshold, then the rest of the league is going to follow suit. This is just business, but it also fits baseball’s personal kayfabe, in which no team can compete financially with the Yankees.

We went from eight teams crossing the luxury tax ever, over nearly two decades since the 2003 model was instituted, to eight in a single season going over in 2023. And in much higher amounts than they used to, as well. The Red Sox still aren’t spending like they should—a $700 million offer to Juan Soto he was never in danger of accepting looks good if your goal is to say “we tried,” but it’s not spending—but the Yankees and Dodgers are. The Yankees, not as much as they could or should (though, unlike the Red Sox, it’s easy to believe they actually did try to get Soto), while the Dodgers are trying more than anyone else besides the Mets, if you go by the percentage of their revenue that they’re spending, and how much of tomorrow’s cash they’ve already committed to players through those deferrals. That’s a huge shift from 2020, and these changes with spending at the top have resulted in more teams spending to or over the luxury tax threshold since the new collective bargaining agreement went into effect.

Which is to say that the Braves, Blue Jays, Phillies, and Rangers have less excuse to sit on their reserves of cash when the traditionally wealthy teams are spending like the Yankees—who had a nearly $300 million Opening Day payroll in 2024—and Dodgers and Mets are going all-in. Maybe they can’t go dollar-for-dollar with the Yankees, no, but when the baseline of what Yankees Money is goes up, so too does the spending of other clubs. As said nearly six years ago now, the rest of the league follows what they (and the other wealthiest teams) do.

Much of the rest of the league, anyway. Back when that Deadspin piece was published, 19 clubs were at least $50 million under the then-$206 million luxury tax threshold. Seventeen of those teams were at least $75 million under, and nine of those were at least $100 million below. The 2024 luxury tax threshold—the lowest one—came in at $237 million. While more teams are over the tax, and quite a few are closer to it, there are still many below, and some cartoonishly below it.

To use the same benchmarks as above, 16 teams were at least $50 million below the first threshold (it’s actually 15 teams, but the Angels were at $48 million below, so they’re going to be lumped in here since that’s more accurate in the grand scheme of things than leaving them off would be). Of those 16, 13 of them were at least $75 million below the threshold, with two of those—the Rockies and Mariners—$70 million and $74 million under, respectively. Once again, nine teams were at least $100 million below the tax threshold, with the Guardians ($97 million) nearly making it an even one-third of the league. The Rays, by the way, were $148 million below the tax threshold, while the A’s were $156 million under it.

So, we’re seeing more teams spending closer to or over the luxury tax than we were before what looked to be a near league-wide shutdown heading into what were always going to be tense collective bargaining sessions. That much is true! Having eight teams crossing the luxury tax threshold is good, and having another three clubs within $10 million of it is great, as is another three clubs within $25 million—that’s 14 clubs spending over $200 million on their rosters, by luxury tax calculations, anyway. The other 16, however, are at least as much of a problem as they were six years ago, if not more so. The gap is widening, but as we’re reminded when we see that teams like the Tigers, Rays, and A’s spent about one-third of their revenue on their roster in 2024—for comparison’s sake, even the still-not-spending-enough Guardians managed 48%— it’s not because this is a have not vs. haves issue. It’s a will spend vs. won’t spend one. Yankees money—or even “Yankees Money” isn’t an option for “small-market” teams, no, but these clubs are also funded, in addition to their actual local revenues and national television deals and all that, by a revenue-sharing program that gets part of its total pool from luxury tax payments. So when Steve Cohen decides he doesn’t mind paying twice as much as what’s on the contract for the latest star, that additional money is going into the coffers for the rest of the teams that aren’t sniffing the luxury tax threshold, meaning it’s there to help them play catch up. Which, as evidenced by those figures showing little has changed for a massive portion of the league even as the luxury tax is paid by more clubs, is not what’s happening with that cash.

Anyway, this is all a long preamble of sorts. If there are more teams willing to spend heavily—or, at least, more teams willing to admit that they can spend heavily—then there are going to be repercussions of some kind in the next CBA, which will be negotiated in 2026, before the expiration of the current one in December of that year. Bob Nutting and Dick Monfort and others are going to decide that the Cohen Tax didn’t go far enough, if it’s not dissuading the man it’s named for. They’re going to go after deferred money—again, by the way, it’s the players who didn’t want to get rid of it last time out when that was attempted, to the Dodgers’ eventual great delight—and it’s likely going to cause an issue. If not in the 2026 CBA talks, then surely by the next set, and with a couple of real good reasons.

For one, this next CBA is going to exist in a before/after time period with regards to the future of MLB’s local broadcasting changing forever. That CBA is going to start out under the existing rules for broadcasting, with Diamond or Bally or whatever it’s going by at that point still in the picture, as well as the existing national deals with ESPN, TBS, and so on. When everything expires in 2028, however, and a new deal is negotiated, it’s likely going to be one that focuses heavily on streaming, and possibly with a partner like ESPN handling local broadcasts on whatever their new subscription streaming app is. (That’s not a guess at the existence of one; they just haven’t named the thing yet.)

When this happens, and MLB gets their wish of packaging as many local broadcasts together as they can into a single service, the “small” vs. “big” market divide is going to feel even more significant, at least as far as the wallets of the latter go. They’re going to have to further subsidize the smaller media market teams to make this whole thing work, and that’s going to take even more severe revenue-sharing, which is going to make it that much harder for Cohen or whomever to not call Bob Nutting a bunch of words you won’t find in the Bible to whatever journalist wants to jot them down after ole Bob just keeps pocketing revenue-sharing dollars instead of investing them into his team.

Commissioner Rob Manfred has been able to maintain Bud Selig’s legacy of keeping the owners united and barely ever sniping at each other in the papers, but Manfred’s big finale as commish is going to be this new broadcasting deal: it will be signed in 2028, and he’ll be out the door, his final term over, in January of 2029. Which means the fallout from the contract, which will surely impact the owners’ relationships with each other and into the subsequent CBA discussions a few years down the road from then, will be the responsibility of another commissioner. Will that one be able to keep the owners in line and on the same page? Will they have anywhere near the three decades of experience Manfred does in keeping Selig’s vision alive, or will they drift just far enough from all of that to allow disunity to take over once again? The same lack of unity that powered the hundreds of pages of John Helyar’s The Lords of the Realm, when it was pretty clear most of these guys hated each other and had no problem saying it, to their detriment against the unified, unionized players?

To circle back a bit: is this influx of spending from the Dodgers, Mets, and more a preemptive reaction to the future that’s coming? One that will likely provide harsher (for teams like them) revenue-sharing cuts to further subsidize teams with a passing interest in winning anything? Are they going for it now, attempting to build some kind of legacy now, because the option might not be as available to them going forward, at least not in these kinds of dollar amounts?

It’s a question worth asking, especially when we’re watching something similar go down in the National Basketball Association: their new “second apron” rule essentially cuts out all possibilities for adding players, all the little tricks and exemptions that created additional space in a salary cap system, once a team passes a certain threshold. The Boston Celtics—the current defending champions—decided to work around this pending change to player acquisition by signing essentially every core member of the team to long-term, highly lucrative extensions that would keep them together for years. They’re way over the cap, but they’re allowed to be that way, because player acquisition is what’s hampered by the new rules: extending players you’ve already got is fair game, so that’s what they did, in a way that let them run back a championship roster with opportunities to do it again in the future, at a time other teams were dealing away key players just to get some flexibility under the “apron.”

Maybe those MLB teams spending in extreme, noticeable ways right now are doing something similar, working within the bounds they can before the rules change and they’ll have to figure something else out besides the brute force of the dollar. If so, it’s probably only going to enrage the anti-spending clubs that much further, but what does that matter? They’re going to act like this no matter what, and their crusade is always to limit spending around the league, not just their own. The teams that want to try might as well do so in spite of them while it’s an option.

This is all a long way of saying that there’s been something of a united status quo among MLB’s owners for decades now, but, as the shift to streaming and packaged local broadcasts and a new commissioner who wasn’t Selig’s right-hand man all come at the same time, things might be changing. Whether it’s for the 2026 negotiations or 2032’s remains to be seen, but the current state doesn’t seem like it’s going to hold for much longer.

Marc Normandin currently writes on baseball’s labor issues and more at marcnormandin.com, which you can read for free but support through his Patreon. His baseball writing has appeared at SB Nation, Defector, Global Sport Matters, Deadspin, Sports Illustrated, ESPN, Sports on Earth, The Guardian, The Nation, FAIR, and TalkPoverty, and you can read his takes on retro video games at Retro XP.