Manfred proposes two Expansion Teams and Re-alignment

[brewerfan82]

57 minutes ago, SeaBass said:

I'm not saying to stop deferrals, that would never happen either, I'm only saying that there should be a limit for tax dodging. Defer as much salary as teams want and a player agrees to but only get a luxury tax benefit up to a certain threshold.

Deferring 97% of a $680M contract and not having to pay luxury tax is a crime in my opinion. The Dodgers already have the most spending power in the game and this loophole just makes them even more bulletproof.

I don't believe deferring the money is dodging any luxury tax. Like you said, agents aren't stupid, the overall guarantee of the contract to the player is the same if you heavily defer a $680M contract vs paying a traditional $460M contract without deferrals (ie. it's not like the player had an option of $680M without deferrals and is just allowing the Dodgers to defer it). That's why the luxury tax hit is $46M either way, based on present-value calculations.

[SeaBass]

21 minutes ago, brewerfan82 said:

I don't believe deferring the money is dodging any luxury tax. Like you said, agents aren't stupid, the overall guarantee of the contract to the player is the same if you heavily defer a $680M contract vs paying a traditional $460M contract without deferrals (ie. it's not like the player had an option of $680M without deferrals and is just allowing the Dodgers to defer it). That's why the luxury tax hit is $46M either way, based on present-value calculations.

When do those luxury tax hits begin? What I'm seeing is that the immediate benefit was lowering their initial luxury tax penalty which allowed them to sign other high profile players. I also got the numbers wrong, it's a $700M total contract and the $680M was the amount deferred.

[brewerfan82]

The luxury tax hits are immediate during the length of the actual contract. So for Ohtani, they're incurring the $46M hit for each year of his actual 10 year contract.

[owbc]

Agreed that salary cap is a pipe dream.

The Brewers operate as a mid-market team salary wise, so I think they have a lot to lose if the ~10-12 teams that are consistently below them in payroll are given more resources or are forced to spend more. 

Equal sharing of ALL TV revenue is the dream, both local and national. We're moving into a two-tiered system with a few rich teams having a separate revenue stream from an RSN and everyone else fighting for scraps. 

[SeaBass]

1 hour ago, brewerfan82 said:

The luxury tax hits are immediate during the length of the actual contract. So for Ohtani, they're incurring the $46M hit for each year of his actual 10 year contract.

Ok, that's fine but without the deferrals he'd have otherwise counted $70M per season. It's still an enormous benefit. They shouldn't be able to dodge $34M per season by deferring money. I don't think it's unreasonable for teams to get some tax relief for deferrals but maybe it shouldn't be that much. It seems reasonable to me that they could cap the deferral benefit at a smaller tax discount.

I get that they're being charged at the current day value, all I'm saying is when one superstar's free agent contract extends beyond a $300M or $400M overall value at signing (which is a number that would change as salaries escalate) the deferral discount shouldn't be as high regardless of current day value.

[SeaBass]

Or maybe the solution is that if you give a player a contract with a $70M AAV you shouldn't be able to only pay him $2M per year for the length of the contract and just defer the remaining $68M.

EDIT: Even if you want to adhere to the $460M current value and think $46M AAV, the $2M salary per season over 10 years is bonkers. If teams were capped at paying a minimum of 50% or even 25% of AAV per season in actual salary it would more effectively restrict their power to significantly minimize luxury tax payments.

2nd Edit: Disregard the above edit, I was getting myself confused since the $46M is already being taxed. I'm done lol. I think most people get what I'm saying, hopefully.

[Jopal78]

2 hours ago, SeaBass said:

Who's to say that the overall guarantee on their contract isn't already higher than it would be if there were no deferrals? Agents aren't stupid. We're just seeing the final number when salaries are reported.

It’s all driven by AAV; agents are actually disincentivized for pushing for deferrals if they get paid when the player does.

The concept of deferring ensures the player misses out on compounding and does nothing to beat inflation. 50 million today in any normal market will outperforms 68 million received a decade later. 
 

In fact. You could argue a deferral makes the player a long term lender of the team at below market rates. 

[igor67]

How many teams would need to distribute through MLB TV for their local broadcasts to the point you could basically still just Broadcast road game feeds in the home market of the home teams and offer a cheaper option?

[brewerfan82]

30 minutes ago, SeaBass said:

Ok, that's fine but without the deferrals he'd have otherwise counted $70M per season. It's still an enormous benefit. They shouldn't be able to dodge $34M per season by deferring money. I don't think it's unreasonable for teams to get some tax relief for deferrals but maybe it shouldn't be that much. It seems reasonable to me that they could cap the deferral benefit at a smaller tax discount.

This is incorrect, because if they didn't do the referrals they wouldn't have offered him $700M for 10 years, they would have offered him $460M for 10 years and the luxury tax hit would have been the same. The teams, players, and agents all understand how referrals affect the value of a contract and their offers, acceptances, and the luxury tax amounts all reflect this.

[SeaBass]

12 minutes ago, brewerfan82 said:

This is incorrect, because if they didn't do the referrals they wouldn't have offered him $700M for 10 years, they would have offered him $460M for 10 years and the luxury tax hit would have been the same. The teams, players, and agents all understand how referrals affect the value of a contract and their offers, acceptances, and the luxury tax amounts all reflect this.

If this is so cut and dried, and I understand what you're saying that they're not escaping the luxury tax, why is the rest of the sports world so convinced that this was a huge benefit for the Dodgers? You'd think by now it should be common knowledge but clearly people are still confused. Including reports of other MLB owners that are not happy about the Dodgers tactics.

I come away still feeling like the Dodgers are scamming the system. Whether the Dodgers avoided luxury tax or not they found a way to negotiate in such a way that other owners could not compete with them. There's always a winner and loser in bidding wars but this feels extra.

[tmwiese55]

While I get the argument being made on the tax I think its still a loophole that should be regulated.  Maybe something like only 25% of total deal can be deferred as a framework.   A factor in my thinking is that I just don't think its true that Ohtani would've only got 460 mil at 46 annual if there was no deferrals.  Guerrero just got 500 at 35ish mil annual.  Soto got $765 at 50ish annual.   Ohtani is a better hitter than both while also being a top 10 pitcher when healthy.   

Granted there is nuance like age, injuries, and perhaps just that Ohtani wanted to play for LAD to win titles and took less to do it.   But if you'd have told me all Ohtani could get at FA was 10/460 I'd have laughed at it.  A top hitter or pitcher at his skills gets 35-40 per year, he's two of them.  So that's where you get to 70 mil annually, then he basically said "yea but I wanna win, so pay me later so we can win now".  Without that perk they'd have to pay him at least over 60 mil per year or he'd have had to just straight up do a discount to help the owners/team 

[sveumrules]

20 minutes ago, tmwiese55 said:

 But if you'd have told me all Ohtani could get at FA was 10/460 I'd have laughed at it. 

MLBTR predicted 12/528, Ben Clemens at FanGraphs came in at 13/527, the median crowdsource at FanGraphs was 10/450.

All much closer to $460M than $700M.

Soto and Guerrero benefitted from Ohtani's deal raising the bar at the top of the market and being three years younger in the first season of their mega-deals.

For all Ohtani's two way talent no bidding team thought they were realistically getting ten years of a pitcher. He was already hurt when he signed which wiped out most of the first two years and odds are his arm won't make it through the remaining eight years intact either.

[brewerfan82]

My understanding on a couple of those fronts is (and I'll admit these are VERY murky):

1.) The main benefit for the organization is they have flexibility in how the deferred money is secured. I'm not clear on how that works, but basically they don't need to secure that money in cash each year, they can do it in other ways including guaranteeing it against their credit. So they have some extra flexibility in how much real cashflow they have year to year and additionally if they think they can invest the money with a higher rate than whatever standard the league is using to calculate the deferred discount amount, they can come on top that way as well.

2.) Part of Ohtani's advantage to deferrals is he may be able to get some tax reductions on those payments if he's no longer in California when he receives them (sounds like he can't completely dodge them, but could get some sort of reduction). But yes, I think the fact that the Dodgers don't care that much about the luxury tax penalties and the referrals help with their real cashflow, and the fact that Ohtani doesn't need the money right now, is part of why he wanted to help the team by deferring a large portion of his contract.

All that said, my point is when it comes to the actual luxury tax implications, I think it's pretty well thought out in a way that isn't giving the Dodgers a huge advantage on that front. Now, the fact that they're still willing to go like $170M OVER the threshold might indicate the real issue is the penalties for going over still aren't strong enough, and that's something I can get on board with.

[tmwiese55]

Trout got 35+ mil per like 10 years ago.   Judge got 40 mil per a year or so before.   Again, I see the argument but I don't buy that he was only getting 46.   Even if close, the reason it wouldn't be more is because of how much paying one person 60-70 per year hurts your ability to build a team around them. Drumroll, thus why its bs to defer it to keep the number down.      The deferral route allowed him to have this high number on paper while allowing the team to win by deferring payments.   Without it being allowed, it hurts their ability to build a team around him and/or he has to take a blatantly lowball deal just because thats where he wants to be and to win.   Which is fine of course if thats his choice, but the deferral allowed it to be a win win.   And its a perk that only the wealthiest teams can afford to risk

[JosephC]

Expansion?  Time for about 16 teams to bail on MLB and start their own league.  If enough owners are sick of the Dodgers, maybe that number can be even bigger than 16.

[Playing Catch]

I think baseball should use more four-team round-robin in-season tournaments that mean something (points applied to wild-card eligibility).

We know that playoff baseball is so much more fun. Just add a couple more teams to the Bristol Speedway Classic and have the winner earn "wild-card" points. Maybe these points can be directed toward wild-card eligibility, or maybe draft-pick considerations or something?

I know the odds of my watching a Cubs-White Sox game in July would be MUCH higher, if I knew the White Sox could prevent the Cubs from earning any extra "wild-card points".

This is merely one hare-brained idea. I just think they need to add some juice to regular season baseball to add rooting interest for casual and hard-core fans alike.

[TURBO]

Adding 2 new teams to an already sinking ship doesn't make a lot of sense right now.

It will just be two more have-not teams to add to the already large pool of have-nots...

The Dodgers have become a King in a cartoon league.  It's pretty disgusting.

[nate82]

Manfred on a possible salary cap in the next CBA.

“But I do get concerned. We try to listen to our fans, and we do hear from fans in a lot of markets that, ‘Gee whiz, when we look at the resources they have compared to the resources that are available in our market, we don’t feel like it’s quite a fair shake,’ and that’s an issue we’re going to have to deal with.”

https://www.nytimes.com/athletic/6986854/2026/01/20/mlb-owners-salary-cap-push-dodgers-kyle-tucker/?source=user_shared_article

I think this dead on arrival and won’t happen.  The owners will not include revenue sharing in the salary cap proposal and the players union will reject it.  The salary cap will then be dropped and nothing will change.  There are other options beyond a salary cap but the owners don’t want to explore it.

[nate82]

I was thinking about a major restructuring of the league.

First, eliminate the American League and National League entirely and replace them with a single league divided into four divisions. In the first year, 32 teams would compete, with 8 teams making the playoffs.

In year two, the system evolves: the 8 playoff teams from the previous season are placed into a new “Championship Division.” The playoffs then expand to 10 teams. Within this format, the top two seeds receive a double bye. In the early rounds, higher seeds would only need to win one game to advance, while lower seeds would need to win two—essentially creating short, advantage-based series where the higher seed has a significant edge.

Teams that fail to make the playoffs while in the Championship Division are relegated back to a lower division the following season.

Divisions would be realigned every year based on performance. There would also be a designated “Losers Division” made up of the bottom 8 teams. If a team remains in this division for more than three consecutive seasons, it would be relegated to AAA, and a AAA team would be promoted to replace it. The promoted team cannot be an affiliate of the relegated franchise.

As for player movement: players on a relegated team who are not under long-term contracts and who have at least five years of experience would become free agents. Players without long-term contracts and with fewer than five years of experience could be assigned to the promoted AAA team, if that team chooses to accept them. If not, those players would enter a mini-draft, where other teams could select them (provided they have available roster space). Any undrafted players would then become free agents.

Just a crazy idea which would never happen so Manfred if you are listening please do this.

[Playing Catch]

I like a lot of the elements you suggested, @nate82. I think tiering baseball would offer more exciting regular season baseball if games/series represented opportunities beyond adding a game in the win column.

I don't think MLB will go this direction, however, choosing instead an easy, boring, flattened 32 team/8 division set-up like the NFL. But there could still be some fun elements. They could have 8 "divisional" all-star teams that compete for divisional playoff advantage, or as I've mentioned before, have small-scale weekend round-robin style tournaments with 4 teams facing off with each other at special venues.

I think that whatever Manfred's vision is, it is going to include big changes that not all of us will like.

[GAME05]

In my OOTP game I created two Leagues, no Divisions, divided roughly by the Mississippi River. Top four in each make the playoffs. It also required a two-team league expansion in the West to make things even. You'd create more fan interest with local rivalries (like Yankees vs. Mets or Milwaukee vs. Minneapolis) and you'd greatly cut down the miles players have to travel during the season. 

I know players have talked about going back to a 145-game season because more rest equals fewer injuries, as well as more doublheaders but they're 7-inning games, but also recognizing neither will happen.

I favor a near-complete revenue sharing with owners keeping something, like a % of gate receipts, to ensure they have a positive income stream and a payroll cap/floor ensuring players get their 52% of revenue. I know teams have argued "Well maybe our good players are young, so we don't need to spend to a floor" but there's always room to add an expensive reliever on a one-year contract to meet that floor. Also the home manager should have the decision on whether or not the teams will use a DH for the upcoming series, but that's unrelated.

There's also certainly some room to allow more arbitration years, too. Guys like Turang should be making more than $4m.

Unless it can be the Brewers, I hope the Dodgers win the next 10 World Series in a row. Payroll disparity is by far the biggest problem in this sport. Short-term it gets you more eyeballs on the World Series because it better ensures NY and LA are involved, but long-term it's going to ruin engagement. Why should a potential fan in Cleveland or KC or Tampa Bay bother?