Report: MLB Proposes $100M Team Salary Minimum, $180M Luxury Tax Threshold

Rob Goldberg@@TheRobGoldbergFeatured Columnist IVAugust 18, 2021

The Major League Baseball logo serves as the visitor's on deck circle before a baseball game between the Chicago White Sox and the Cleveland Indians Wednesday, April 24, 2013, in Chicago. (AP Photo/Charles Rex Arbogast)
AP Photo/Charles Rex Arbogast

Major League Baseball has reportedly introduced a proposal that would reduce the luxury-tax threshold for teams and also create a salary minimum across the league, according to Evan Drellich and Ken Rosenthal of The Athletic.

The proposal would force teams to start paying a tax after payroll goes above $180 million, down from the current line $210 million. Anyone over that line would have to pay at least a 25 percent tax, up from 20 percent for current violators. 

On the other end of the spectrum, teams would also be forced to keep payroll above $100 million. 

According to Spotrac, 12 MLB teams have a payroll under $100 million for 2021, with Cleveland totaling $48.7 million for the entire roster.

Money was a big story for the organization this offseason as Cleveland traded away big-name players Francisco Lindor and Carlos Carrasco before they could hit free agency.

The new rules could force Cleveland and other small-market teams such as the Pittsburgh Pirates and Miami Marlins to spend more to help improve competitive balance across the league.

It could be a similar system to the NBA, which has both a salary cap and salary minimum, setting at 90 percent of the salary cap. Similarly, NBA teams have to pay a luxury tax if they go over the cap.

In the MLB proposal, the luxury taxes will help fund payrolls for teams at the bottom.

Only three teams (Los Angeles Dodgers, Boston Red Sox and New York Yankees) are currently over the $210 luxury tax line, per Spotrac, but nine teams would have to pay if the line was at $180 million this season.

The tax rate would also climb based on payroll through a three-tier system.

The MLB and players association would have to agree on the policy as negotiations continue ahead of the CBA expiring on Dec. 1.