Gene Orza, former players’ union chief operating officer who was involved in the negotiations that established MLB’s competitive balance tax (CBT) in the 1996 collective bargaining agreement (CBA), spoke with Ken Rosenthal of The Athletic where Cohen’s name wasn’t far from his mind.
“I’m sure clubs are afraid of Steve Cohen,” Orza said. “If we lose some restraints on salary, the Mets will spend $300 million or something like that. You always have that small-market, big-market battle. He has to be sensitive to that.”
The CBT is one of the core economic issues that is keeping MLB and the players’ union so far apart in the fruitless talks that have already delayed Opening Day and canceled the first two series of the 2022 regular season.
What it does is provide an unofficial salary cap, of sorts, dictating how much a team can spend on its roster during the season without incurring penalties — whether that’s having to pay fines or losing draft picks.
Last season, the CBT was at $210 million — a number that many figured would increase considering Major League Baseball’s revenue and profits continue to skyrocket behind escalated ticket sales and exorbitant TV rights deals. It’s simple logic.
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But the league is unwilling to meet the players’ demands, which started at $245 million and sank to $238 million while increasing incrementally to $263 million by 2026 in their latest offer. MLB countered with slight increases that began with $220 million in 2022 and ended with $230 million in 2026.
In terms of that logical standpoint that the CBT should increase as the league brings in more money, the owners do have a point in that it’s not a necessity — at least speaking from a historical standpoint. Per Rosenthal, previous CBA’s “included no specific mention of the thresholds rising in accordance with revenues.”
That doesn’t mean it’s right, however.
Small-market teams — which there really is no such thing as anymore considering a large constituent of MLB team owners are billionaires — that are unwilling to spend big bucks to either retain their star players or improve their roster would see their chances of being competitive take an even larger hit under a sizably increased CBT.
If big-market teams like the Mets can spend even more without being penalized, Cohen would likely be more inclined to dole out more big contracts.
According to Spotrac, the Mets’ 2022 payroll is already at $235 million, which means penalties could be just around the corner depending on negotiations.