The Brewers Are Getting More Cash For 2025 Than You Might Think

[Jake McKibbin]

On top of the new TV deal with FanDuel Sports Network, the Brewers' share of proceeds from the league's competitive-balance tax should provide a nice infusion of spending power—but how much of a difference will it make?

Image courtesy of © Benny Sieu-Imagn Images

Excuse me while I get slightly nerdy to begin with (I do love me some numbers).

The current competitive-balance tax limit penalized teams who spent over $237 million on player salaries and benefits in 2024, using various tax rates on any amounts spent beyond that and the higher thresholds. The greater the degree by which you surpassed the limit, the higher your tax due, up to a maximum of 90% taxation for the top bracket—with repeat offenders facing escalating penalties. It's a big reason why teams like the Dodgers are trying to defer as much money as they can, in order to reduce their CBT obligations.

The tax thresholds for 2024 are:

Amount Payor Exceeds Competitive Balance Tax	First Year	Second (Consecutive) Year	Third (Consecutive) Year
Less than $20m ($237.1m-$257m)	20%	30%	50%
Between $20m - $40m (Between $257.1m-$277m)	32%	42%	62%
Between $40m - $60m (Between $277m-$297m)	62.5%	75%	95%
Over $60m (Over $297m)	80%	90%	110%

The system punishes big spenders both for being consistently over the "luxury tax" threshold, and for exceeding the limit by significant amounts. In 2024, there was an MLB record of nine payers, who should pay roughly the balances below:

The 2023 total was a record at $209.8 million, so the 2024 iteration has blown past that number. These funds must be paid by Jan. 21 each year, and are redistributed by the Commissioner's Office in a process defined by the most recent Collective Bargaining Agreement. The first $3.5 million goes to fund players' benefits, with half of the remaining money going to the MLB Players Association to fund individual players' retirement funds. Here's where it gets interesting: the other half gets dispersed amongst revenue sharing payee clubs (effectively markets with below-average revenue earnings). And yes, that includes the Milwaukee Brewers.

The method through which funds are shared depends on a team's efforts to build up their own product. Increases in ticket sales, merchandise sales, and other factors are used to assess if a team is making positive steps to be competitive and self-sufficient, without unduly rewarding teams who "tank". So in total, $153 million and change will be put into a supplemental commissioner’s discretionary fund and distributed among revenue sharing recipient teams who have grown their (non-media) local revenue over a pre-determined number of years.

The Brewers drew 2,537,000 fans in 2024, just 14,000 lower than their 2023 numbers, but Rick Schlesinger commented on lower "no-show" rates. Meanwhile, TV ratings are amongst the top three in baseball. It's hard not to believe that the buzz around Jackson Chourio impacted off-field sales somewhat, while a fuller ballpark (due to the lower no-show rates) will have aided the concessions and stadium surroundings sales.

All in all, it's highly likely the Brewers are recipients of the supplemental commissioner's discretionary fund, and have been for some time. As a result, they probably have nearly $10 million more than we've been accounting for, and every incentive to roll it back into the team. It might not sound like much, but combined with the return of the FanDuel TV deal, the Brewers may have found around $12-$14 million more in their pockets this offseason. From what was a very tight payroll approaching the new year, it seems some additional funds have materialized. Can they use it to reinforce their infield mix? Add some thump to their lineup? Who knows, but the funds are now there to make a move.

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Might they see fit to spend it on the type of one-year, take-a-chance deal they've been known for over the last six years? If so, who would you see them spending it on? Let us know your thoughts in the comments below!

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[SF70]

I’d like the team to just continue to be smart with their money. Not sure if there’s a FA worth adding that can move the needle with the team, but sure maybe a Grichuk or Moncada addition would work if both can be had on 1 year deals.

Otherwise, preserving financial-flexibility throughout the season/trade-deadline to potentially add payroll should be a priority along with investing in infrastructure, where we get the best bang for the buck.

 

[rafa]

SF70, With 5 outfielders and 2 guys at DH, where would Grichuk play?  Beyond that, I think your post makes a lot of sense.

[Underachiever]

Are MLB teams getting any money from all the gambling on the sport?

[brewmann04]

hope if true they can add a bat. 

[wiguy94]

Frame the title as an absolute while the article is entirely speculation. Grade A clickbait Fanatic!

[Jake McKibbin]

22 minutes ago, wiguy94 said:

Frame the title as an absolute while the article is entirely speculation. Grade A clickbait Fanatic!

They absolutely are getting more cash, and most people wouldn't consider the CBT cash increasing, hence the title. The amount is speculation, but I'm confident in being at least in the ballpark

[wiguy94]

23 minutes ago, Jake McKibbin said:

They absolutely are getting more cash, and most people wouldn't consider the CBT cash increasing, hence the title. The amount is speculation, but I'm confident in being at least in the ballpark

It’s entirely speculative. It’s clickbait. Especially putting definitive numbers in the article. 

[Team Canada]

The article is fine. It's true that the headline states it as fact when we don't know exactly how much extra they may be getting. 
I think you're being unnecessarily dismissive and pejorative though.

[CheeseheadInQC]

The CBT calculations were interesting, and there were wrinkles I wasn’t aware of. I wish there was something more concrete on the TV deal. Theoretically there are reasons why it might not have been as bad for Milwaukee as some of the other teams caught up in it (they were one of the few teams that I believe was never dropped but rather the contract just ran out).

[wiguy94]

9 minutes ago, Team Canada said:

The article is fine. It's true that the headline states it as fact when we don't know exactly how much extra they may be getting. 
I think you're being unnecessarily dismissive and pejorative though.

So we've agreed the title was clickbait because the article was speculative and showed there's really no way to know if the Brewers are getting any more money let alone $12-14M additional money.

[Jake McKibbin]

11 minutes ago, wiguy94 said:

So we've agreed the title was clickbait because the article was speculative and showed there's really no way to know if the Brewers are getting any more money let alone $12-14M additional money.

Financial projections do require presumptive numbers without the actual public numbers, however I feel with

A) teams reported going to MLB.tv that they lost ~ 20% of their revenue, which would equate to $7m for the Brewers;

B) a 50% larger CBT, increased by a net $50m (in the portion shared between revenue sharing recipients) and the Brewers meeting the criteria and beyond in order to be at the upper part of that dispersement,

Makes this all quite logical. I can't say for 100% certainty on the figures without a source, but the logic checks out from a fiscal view point and I hope I've made said logic easy to follow in the article.

I maybe should have included a probability adverb, but given no one was considering the revenue boost in particular from the CBT dispersal, I considered it okay to go with a blunt statement, though I can at least see your viewpoint.

Anyway I'll leave it there, I hope you guys enjoy the piece!

[wallus]

Lots of emphasis on a title that may have not been perfect. Below sums that up quite nicely.

[SF70]

6 hours ago, rafa said:

SF70, With 5 outfielders and 2 guys at DH, where would Grichuk play?  Beyond that, I think your post makes a lot of sense.

Without a trade, they’d probably have to option Perkins to get Grichuk’s lefty-killing bat in there