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. 
CoViD-19 EXCEPTION: A club's 2020 MLB payroll is the value of the aggregate contracts prior to salaries being pro-rated due to the truncated season.  

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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  • bradsbeard 1 hour 31 min ago (view)

    Phil, curious if you've seen enough of Jacob Wetzel to offer an initial scouting report. Just from watching some prep video he looked pretty strong and fairly athletic (HS football player and all). Impressive numbers albeit in community college, but he was a division 1 recruit before that so he's pretty intriguing to me. 

     

  • KingKongvsGodzilla 1 day 23 hours ago (view)

    AZPhil, thank you for these updates! It's a nice little pick me up during this dumb year. If you have anything to say on Yohendrick Pinango, Joel Machado, Rafael Morel, or Richard Gallardo, I would love to hear it! Thanks again!

     

  • crunch 2 days 9 hours ago (view)

    jim hickey new nats pitching coach.

     

  • bradsbeard 3 days 3 hours ago (view)

    Several non-prospects ate up spots as well. Ultimately wish they had given a few more Rivas types a shot there. 

     

  • tim815 3 days 4 hours ago (view)

    Only 60 spots in SB. Others benefited more from the time.

     

  • crunch 3 days 7 hours ago (view)

    not phil, but i think everyone is holding off on his potential ceiling until he gains enough weight to not look like someone you want to buy a sandwich every time you see him.

    big upside if his skills can strengthen as he builds his body.

    too early for a solid comp, but i wouldn't feel uncomfortable throwing ian happ's name around (bit better arm than happ, though).

     

  • bradsbeard 3 days 8 hours ago (view)

    Me too. Thought it was weird he wasn't in South Bend at all. 

     

  • Dolorous Jon Lester 3 days 13 hours ago (view)

    I am very, very intrigued by Rivas. If the DH is unfortunately here to stay, he's a prime candidate for that and give Rizzo a day off 1B here and there. If no DH, hopefully he is a passable OF. Big believer in his hitting ability

     

  • Hagsag 3 days 16 hours ago (view)

    Phil, do you think Chris Morel is the real deal?

     

  • tim815 4 days 5 hours ago (view)

    http://www.milb.com/roster/index.jsp?cid=609&sid=milb

    Blue and Red DSL instructs rosters. No Brayan Altuve.

    http://www.milb.com/roster/index.jsp?cid=2270&sid=...

     

  • crunch 4 days 8 hours ago (view)

    yup, they're gonna try.  starts in about a month.

     

  • Hagsag 4 days 15 hours ago (view)

    Has it been announced whether there will be a DR winter league this winter?

     

  • tim815 4 days 21 hours ago (view)

    That's as good of news as we'll get for awhile.

     

  • Arizona Phil 5 days 35 min ago (view)

    TIM: If nothing else, signing a boatload of IFA (35) in the 2019-20 ISP is a pretty good indicator that the Cubs fully intend to run two DSL teams into the forseeable future. 

     

  • tim815 5 days 1 hour ago (view)

    Of the 11 new guys, I'm leaning on Marino Sandy and Jerry Torres to be the most likely to reach full-season ball or get traded 

     

  • Arizona Phil 5 days 2 hours ago (view)

    OF Ian Miller (outrighted to the minors on 9/3) elected free-agency just prior to the 10/15 deadline, and the Cubs have signed RHRP Juan Gamez (who they released on 9/9) to a 2021 minor league contract.