What MLB’s new CBA means for DET
Major League Baseball and the MLB Players Association reached a deal in principle on a new collective bargaining agreement last night. It not only avoids a work stoppage to the offseason, but for many teams, it will start up the offseason market in earnest. The Tigers have been one of many teams with offseason work waiting for clarity on the new parameters, notably the luxury tax threshold — not just for themselves, but for other teams with which they’ve been talking trades.
The biggest impact for the Tigers is the luxury tax. The threshold for this past season was $189 million. Reportedly, that will go up to $195 million for next season, then progressively upwards to $210 million at the end of the five-year CBA.
It gives a little bit of leeway for teams, but it doesn’t mean the Tigers — whose payroll for luxury tax purposes is at $216 million — can avoid shedding salary. They’re still on track to be over.
The Tigers currently have about $173 million in guaranteed salaries to 11 players on their roster. That does not include the $6 million payment going to cover part of Prince Fielder’s salary, payments agreed to when Detroit traded Fielder to Texas. That does not include a half-dozen players eligible for arbitration, which could cost the Tigers another $12 million according to estimations from Matt Swartz and MLB Trade Rumors. Then come players to fill out the active roster. Player benefits are also thrown in, which is how the Tigers payroll went from just over $200 million to $216 million for luxury tax calculations.
Why can’t the Tigers just ride it out for one more year with J.D. Martinez, Ian Kinsler and Justin Upton (if Upton exercises his opt-out), then recoup draft picks as compensation if they leave as free agents, you ask? Well, the new CBA provides a major disincentive for that, according to a post from ESPN’s Jayson Stark.
As was the case in the old CBA, teams have to make a qualifying offer to a free agent to get compensation back, which would be a draft pick near the end of the first round. Under the new CBA, those free agents will also have to sign a contract worth $50 million or more. And according to Stark, only teams among the 15 smallest markets will get a pick near the end of the first round. The bigger-market clubs will get a compensation pick near the end of the second round. The Tigers have been right around the midpoint between large and small-market clubs; remember, they actually received a competitive-balance pick in 2012 for being considered a small-market club and winning a draft lottery.
But here’s where the the luxury tax gets competitively costly: If a team loses a free agent but is over the luxury tax threshold, they won’t get a compensation pick until the end of the fourth round. So, if the Tigers keep Kinsler, Martinez and Upton for their contract years and they don’t pare down payroll in some other way, all they’ll get if those players sign elsewhere would be picks between the fourth and fifth round. Even a modest return in a trade would be expected to bring back better players.
Long story short, unless something else changes, expect the Tigers to still look to pare payroll, the only difference being a slightly smaller paring needed to get under the luxury tax threshold. They’re still going to busy at next week’s Winter Meetings, which will now go on as normal. The bigger difference will likely be that some teams talking with the Tigers will have more room under the luxury tax, potentially expanding the number of interested teams or the amount of salary those teams can take on in deals. That said, the new CBA might have cost the Tigers a little bit of leverage.
