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.

Recent comments

Subscribe to Recent comments
The first 600 characters of the last 16 comments, click "View" to see rest of comment.
  • Hagsag 1 day 6 hours ago (view)

    Ine of my alltime favorites.

     

  • Dolorous Jon Lester 1 day 20 hours ago (view)

    He played in the big leagues longer than he played any other level of organized baseball combined.

     

  • crunch 1 day 20 hours ago (view)

    al kaline has died at age 85.

    from highschool to the majors without touching the minors...22 seasons, all with DET...18x all-star...3000 hit club.

     

  • Charlie 3 days 20 hours ago (view)

    Currently at a near full-time job that just barely covers my monthly expenses if nothing emerges.

    I make more than that.

     

  • crunch 3 days 21 hours ago (view)

    "Ken Rosenthal of The Athletic reports that Major League Baseball is considering opening the season in empty spring training parks -- with no fans and all players quarantined.

    The plan would have all teams stationed in one centralized location -- likely Arizona"

     

  • Arizona Phil 5 days 9 hours ago (view)

    In addition to 40 players signed to 2020 MLB contracts, after releasing 22 minor leaguers this week the Cubs now have 279 players signed to 2020 minor league contracts (plus one minor leaguer on the Restricted List), for a total of 320 players in the organization (181 pitchers, 30 catchers, 60 infielders, and 49 outfielders).   

     

  • JustSayin' 5 days 19 hours ago (view)

    Years of over-drafting pitching shown here.

     

  • Dolorous Jon Lester 5 days 20 hours ago (view)

    Some of the players cut I am not too surprised by. Some of them I think are definitely victims of the minor league pay thing and being squeezed out.

    That said, I am very surprised they gave up already on Riley McCauley and Niels Stone.

     

  • Hagsag 5 days 22 hours ago (view)

    Baseball America is showing a big group of players that have been released.

     

  • Arizona Phil 6 days 12 hours ago (view)

    The Cubs have released minor league catcher Rafelin Lorenzo. He was selected from the Pittsburgh Pirates in the AAA Phase of the 2018 Rule 5 Draft and spent the 2019 season at South Bend. He was eligible to be a minor league 6YFA post-2020. 

     

  • JustSayin' 1 week 21 hours ago (view)

    The organizations will cut rosters down, as if the full-season teams were breaking camp to start the season, THEN pay the remaining minor leaguers $400/week or whatever.  That's similar to what costs would have normally been but the "one last chance" players who got spring training invitations this year and didn't have an obvious roster spot won't be getting their last chance.

     

  • crunch 1 week 22 hours ago (view)

    "According to Jeff Passan of ESPN, all minor league players will be receiving $400 per week from MLB through at least May 31."

    so that's where that promise landed.  the scary thing is that's still more than some in the low minors make on a weekly basis.

     

  • crunch 1 week 3 days ago (view)

    "Jeff Passan of ESPN writes that the players and league agreed that the 2020 season won't start until "there are no bans on mass gatherings that limit the ability to play in front of fans, there are no travel restrictions and medical experts determine games will not pose a risk to health of teams and fans." Passan does add that the two sides "will consider the feasibility of playing in empty stadiums" and also at neutral sites.

     

  • crunch 1 week 3 days ago (view)

    i miss baseball.  it could happen in june...it may happen in late may...it might not happen either way.

    there's so many things getting messed up right now i would get lost making a list.  there's some college guys making a serious "okay, we need to look at that guy" push that's dead.  former cubs draft pick russell smith (2017, LHP highschool) took last season off for injury (TCU college) and returned with a low 90s fastball, impressive control, and a MLB-quality changeup.  his "comeback" was 4 games and done thanks to this current situation...

     

  • JustSayin' 1 week 3 days ago (view)

    COVID 19 + a short draft + Manfred's obsessive drive to shrink the minor leagues will change baseball forever.  It WAS still America's grass roots sport.  Where I live, from June through August, you could see a quality live game any day of the week, within an hour's drive.  I believe that era is over.  What's going on will have ripple effects, contracting serious college ball, college summer leagues and independent pro ball just as much as the MiLB systems.  With those changes, some of the game's charm will also go.  I've seen a kid from Cape Cod play in the Ca

     

  • crunch 1 week 4 days ago (view)

    fyi for anyone who bought MLB.tv

    for "some reason" getting a cancel+refund via phone is like pulling teeth, but if you contact them via a webpage contact request many people are getting a cancel+refund confirmation within an hour or 2...