Competitive Balance Tax

The Competitive Balance Tax (CBT) threshold will be $195M in 2017, $197M in 2018, $206M in 2019, $208M in 2020, and $210M in 2021. 

CALCULATING A CLUB'S COMPETITIVE BALANCE TAX (CBT) LIABILITY

For the purpose of calculating a club's CBT liability, a club's MLB payroll consists of the Average Annual Value (AAV) of player salaries and bonuses earned by players on the club's MLB Reserve List (40-man roster) and MLB 60-day Injured List. 

In addition, MLB Player Benefit Costs (PBC) and the AAV of "legacy salaries" paid to players who are no longer on the club's MLB 40-man roster (such as a player who has been released or outrighted to the minors, or who is being paid a deferred salary after becoming a free-agent) are considered to be part of the club's payroll when calculating the CBT.   

FINANCIAL PENALTIES FOR EXCEEDING COMPETITIVE BALANCE TAX

A club whose payroll from the just-concluded MLB season exceeded the CBT threshold will pay a 20% tax on the portion of the payroll that exceeded the CBT threshold, a club whose payroll from both the just-concluded MLB season as well as from the MLB season immediately prior to the just-concluded MLB season exceeded the CBT threshold will pay a 30% tax on the portion of the payroll from the just-concluded MLB season that exceeded the CBT threshold, and a club whose payroll from the just-concluded MLB season as well as from the two MLB seasons immediately prior to the just-concluded MLB season exceeded the CBT threshold will pay a 50% tax on the portion of the payroll from the just-concluded MLB season that exceeded the CBT threshold. 

A club whose payroll from the just-concluded MLB season exceeded the CBT threshold by more than $20M will pay an additional surcharge of 12% on the portion of the club's payroll in excess of $20M over the threshold, and a club whose payroll from the just-concluded MLB season exceeded the CBT threshold by more than $40M will pay an additional surcharge of 42% on the portion of the payroll in excess of $40M over the threshold.
NOTE: The surcharge for a club whose payroll from the just-concluded MLB season exceeded the CBT threshold by more than $40M will be 45% on the portion of the payroll in excess of $40M over the CBT threshold if the club paid a CBT tax in the both the just-concluded MLB season as well as in the MLB season immediately prior to the just-concluded MLB season.

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  • Arizona Phil 8 hours 16 min ago (view)

    3B Alec Bohm and RHSP Spencer Howard would likely be the Cubs asking price and the Phils probably say no, but if they don't say no, that could be a deal. 

     

  • crunch 11 hours 38 min ago (view)

    Bruce Levine @MLBBruceLevine
    Cubs have had talks with Phils on Bryant. Nothing there at the moment. Service time grievance still an issue.

     

  • bradsbeard 12 hours 14 min ago (view)

    Humerous 30 minutes this morning when both Mark Gonzalez and Gordon Wittenmyer tweeted out that the Cubs would be receiving Conor Lillis-White as the PTBNL in the Tommy La Stella trade as if it were just now happening. 

     

  • crunch 1 day 10 hours ago (view)

    marvin miller and ted simmons are part of the next HOF class.

    long time coming for miller.

     

  • crunch 1 day 15 hours ago (view)

    things that are important to good on-field play like buying up all the property around wrigley field, from rooftops to acerage, isn't going to monetize itself.

    i know some people would love to have a top tier pitcher, but i'm looking forward to more control of rooftop advertising and an open air beer garden near the team owned hotel and resturant complexes.

    i know some people want a solid leadoff man, but i'm looking forward to seeing 10-20 concerts on off-days destroying the playing field so that extra revenue can help a polician in Nebraska or Iowa get some ad buys.

     

  • Hagsag 1 day 16 hours ago (view)

    Their friend Donald will come through for them.

     

  • crunch 1 day 17 hours ago (view)

    remember when the billionaire owners got a huge double digit tax cut?

    maybe the city should do them a favor and give them more tax savings help to let them buy and build another 2-3 revenue projects outside of the park.  that might help these struggling heroes find some extra loot.

    i know this rant isn't fair, but my "dan winkler got a MLB contract fever" is dying down a bit.

     

  • crunch 1 day 17 hours ago (view)

    f'real.  i don't even know why they're going to bother playing games.  i'm over here printing Cubs 2020 World Series Champs banners while others are sleeping on reality.

     

  • Dolorous Jon Lester 1 day 18 hours ago (view)

    Just saw a fun report that the Cubs are telling even budget type free agents they can't currently negotiate until they clear some payroll. So that's a fun start to the winter meetings.

     

  • Dolorous Jon Lester 1 day 18 hours ago (view)

    I'm with you 100% on that. Minor league retreads are fine and all but we don't need to be paying premiums for middle relief.

     

  • JustSayin' 1 day 20 hours ago (view)

    The Cubs have 15-20 extra pitchers in their minor league system due to unbalanced drafting over the last few years.  I am ready to see them err on the side of giving the internal guys too many chances as compared to signing AAA players who had short stints in the big leagues which didn't go too well.  We don't know it the Cubs organization is just that bad at developing pitching, or has too many guys trying to prove themselves in a fixed number of minor league innings.  Bad scouting/development or self-inflicted bottleneck?

     

  • Dolorous Jon Lester 2 days 12 min ago (view)

    Dan Winkler and Jharel Cotton wasn't enough for you? Tough crowd.

     

  • Hagsag 2 days 14 hours ago (view)

    I think we all are ready for some action.

     

  • crunch 2 days 14 hours ago (view)

    winter meetings start tomorrow...guys got into town friday/today.

    the cubs are supposedly looking to tap the trade market for their major moves.  this is the place where it gets done or seeds get planted.

    also, the modern day HOF class will be announced.  marvin miller will most likely get in.  lou whitaker and ted simmons should have some heat, too.

     

  • crunch 3 days 4 hours ago (view)

    semi-interesting winter league note...

    trey mcnutt (yes, that guy) is having a hell of a winter league in mexico (one of the less talented winter leagues) so far as a closer.  15.2ip 8h 4bb 24k, 0.57 era.

    giants signed him to a minor league deal a couple weeks ago.  he never went anywhere.  he's been consistently playing ball in the minors and indie league ball since he was last a noteworthy player.  last season he played in the OAK minor league system.  30 years old now...

     

  • jdrnym 3 days 11 hours ago (view)

    Brad Brach signs with the Mets for $850K but the Cubs are paying $500K, per Ken Rosenthal. Wasn't his 2020 club only supposed to be on the hook for league minimum?