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Dodger Blue > Featured > Lockout Rumors: Increased Luxury Tax Penalties Part Of MLB’s Latest CBA Proposal
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Lockout Rumors: Increased Luxury Tax Penalties Part Of MLB’s Latest CBA Proposal

Matt Borelli
February 17, 2022
3 Min Read
Rob Manfred
Julio Aguilar/Getty Images
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MLB and the Players Association (MLBPA) met last week for another round of collective bargaining agreement (CBA) negotiations, but as has been the case all winter, there was little to no progress made.

The league reportedly presented a 130-page counteroffer that left the union feeling underwhelmed. MLB only offered slight increases in the pre-arbitration bonus pool, luxury tax threshold and minimum salary over the lifetime of a new CBA.

The league raised the competitive balance tax thresholds by $2 million in the final three years, bringing the totals to $214 million, $214 million, $216 million, $218 million and $222 million.

MLB also proposed to remove the loss of a third-round draft pick for teams that exceed the first luxury tax threshold increased monetary penalties from the last CBA, via Evan Drellich of The Athletic:

MLB maintained a tax rate of 50 percent for teams that exceed the first CBT tier but took away a penalty of a third-round draft pick for doing so. Exceeding the second and third tier remained the same as MLB’s last proposal: 75 and 100 percent, respectively, for the second and third tiers; and the loss of a second-round and first-round pick, respectively. The union considers those tax rates onerous.

Under the previous CBA, teams that exceeded the luxury tax threshold for the first time paid a 20% tax on the first threshold, a 32% tax on the second threshold and a 62.5% tax on the third threshold.

With MLB’s current proposal, first time offenders would pay a 50% tax on the first threshold, 75% tax on the second and 100% tax on the third. Furthermore, teams who exceed the second and third tier will still lose their second- and first-round draft picks, respectively.

It is highly unlikely the Players Association would agree to these penalties, so unless the league makes some concessions, the ongoing lockout doesn’t figure to end any time soon.

MLBPA presented latest CBA proposal Thursday

Five days removed from receiving MLB’s latest offer, the MLBPA provided the league with their counter on Thursday.

The Players Association moved off their stance that everyone with at least two years of Major League service time be eligible for arbitration, but in turn raised their request for a pre-arbitration bonus pool from $100 million to $115 million.

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TAGGED:Collective Bargaining AgreementMLBMLBPA
ByMatt Borelli
Matt Borelli covers the Los Angeles Dodgers as a staff writer for Dodger Blue and holds similar responsibilities for Lakers Nation, a sister site with an emphasis on the Los Angeles Lakers. He also contributes to RamsNewswire.com and RaidersNewswire.com. An avid fantasy sports player, Matt is a former 2014 MLB Beat the Streak co-champion. His favorite Dodgers moment, among a list of many, is Clayton Kershaw's no-hitter against the Colorado Rockies in 2014. Follow him on Twitter: @mcborelli.
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