Brewers Video
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.
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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