Luxury Tax

[RchW]

To me you have to look at revenue. The tremendous gap between Boston and NY vs the rest of MLB in revenues gives them a big advantage.

Teams with lower revenues have no wiggle room.

The average MLB revenue from this chart is $227M. Without the evil twins I'd peg the average at $205-$210M.

Edit:

This may not reflect LA Dodger revenue that will show up next season.

[PSUColonel]

Originally Posted by Le Grande Orange

Are you using actual MLB payrolls to figure this? I would argue you can't really do this since I'm not sure to what degree OOTP tracks total player expenditures by the end of the season.

In real life, for example, it counts the 40-man roster. It distributes the pay of traded players through the date of the trade to each team as appropriate. Players outrighted to the minors have their pay included up to the point of the outright assignment. The annual average value of the contract is used, signing bonuses are prorated, etc. There are lots of little accounting considerations. None of which I don't think OOTP recognizes.

Here are the actual 2012 MLB luxury tax payrolls as calculated by MLB itself. The threshold that season was $178 million.

2012 MLB Luxury Tax Payrolls

           Wages and
    Team    Bonuses      Benefits        Total
-------------------------------------------------
 1  NYA   212,639,568   10,799,590    223,439,158
 2  BOS   167,153,233   10,799,590    177,952,823
 3  ANA   165,853,248   10,799,590    176,652,838
 4  PHI   163,723,842   10,799,590    174,523,432
 5  SFN   149,599,538   10,799,590    160,399,128
 6  LAN   147,458,980   10,799,590    158,258,570
 7  TEX   137,714,380   10,799,590    148,513,970
 8  DET   134,431,998   10,799,590    145,231,588
 9  SLN   115,011,681   10,799,590    125,811,271
10  MIL   110,065,731   10,799,590    120,865,321
11  WAS   108,179,349   10,799,590    118,978,939
12  CIN   107,970,471   10,799,590    118,770,061
13  CHA   103,659,970   10,799,590    114,459,560
14  CHN   101,912,251   10,799,590    112,711,841
15  MIA   101,025,043   10,799,590    111,824,633
16  COL    95,402,597   10,799,590    106,202,187
17  MIN    95,060,855   10,799,590    105,860,445
18  NYN    94,904,428   10,799,590    105,704,018
19  ATL    94,518,437   10,799,590    105,318,027
20  TOR    92,926,944   10,799,590    103,726,534
21  BAL    86,256,650   10,799,590     97,056,240
22  ARI    78,092,126   10,799,590     88,891,716
23  SEA    77,590,403   10,799,590     88,389,993
24  KCA    72,662,838   10,799,590     83,462,428
25  CLE    71,826,426   10,799,590     82,626,016
26  TBA    70,406,588   10,799,590     81,206,178
27  PIT    69,517,437   10,799,590     80,317,027
28  SDN    68,017,905   10,799,590     78,817,495
29  OAK    62,273,913   10,799,590     73,073,503
30  HOU    61,465,789   10,799,590     72,265,379
-------------------------------------------------
Total   3,217,322,619  323,987,700  3,541,310,319

Only the Yankees exceeded the threshold in 2012; the Red Sox were just under it.

Right, in my original post, I was stating I believe this to be the new norm. In fact, in the future, I think teams (including the Yankees)are going to be very reluctant to spend beyond the soft cap.

[NYY #23]

Originally Posted by PSUColonel

Right, in my original post, I was stating I believe this to be the new norm. In fact, in the future, I think teams (including the Yankees)are going to be very reluctant to spend beyond the soft cap.

Teams already are reluctant to spend beyond the luxury tax threshold. The Yankees have paid every year, and I believe the Dodgers, Red Sox, Tigers, and Angels are the only other teams that have been paid. The Yankees stated reason for getting under the threshold next year is to reset the penalty from 50% to 17.5%. It hasn't stopped the Yankees the past 10 years, so I doubt it will going forward, including when all is said and done 2014.

The increasing penalties aren't modeled in OOTP though, along with many other items already mentioned.

[Le Grande Orange]

Originally Posted by NYY #23

The Yankees have paid every year, and I believe the Dodgers, Red Sox, Tigers, and Angels are the only other teams that have been paid.

Below is the list of clubs that have paid the luxury tax. The number in parentheses is the number of times that club paid in the given time period.

1997-1999 (initial luxury tax system): BAL (3), NYA (3), ATL (2), BOS (2); LAN (2), CLE (1), FLO (1), NYN (1)
2003-2012: NYA (10), BOS (6), ANA (1), DET (1).

Note: There was no luxury tax in effect for the 2000-2002 seasons. The figures for 2013 haven't been released as yet, as far as I'm aware.

Originally Posted by NYY #23

The Yankees stated reason for getting under the threshold next year is to reset the penalty from 50% to 17.5%.

That seems entirely likely. The penalties for repeat offenders is more simply handled in the current CBA than in the previous one. The initial rate for a club violating the tax threshold was also reduced in the current CBA, from 22.5% in the prior agreement to 17.5%.

[stevew]

120 means 120% of average team player expenses across the league. It is somewhat hard to predict the exact tax line each year. What I would like is to just set it at a number. Not sure why this isn't implemented in the game.

[stevew]

It also is a very ineffective way to share revenue as the money goes to the 15 teams that spent the least and it hits at the end of the previous fiscal resulting in little benefit if a team is at or near cash max.

[PSUColonel]

Originally Posted by stevew

It also is a very ineffective way to share revenue as the money goes to the 15 teams that spent the least and it hits at the end of the previous fiscal resulting in little benefit if a team is at or near cash max.

What would happen to league finances if the cash max were eliminated? (Or mAde so high, that it would be effectively eliminating it)

[rpriske]

All right, this is just me being an ass... but you wrote something that is a HUGE pet peeve of mine.

Originally Posted by PSUColonel

for all intensive purposes.

This is NOT a saying. It it a mis-quote. It is just wrong.


The saying is, "for all intents and purposes"


Pedantic rant over. You may all go back to talking about luxury taxes and salary caps.

[OBSL Commish]

Originally Posted by rpriske

All right, this is just me being an ass... but you wrote something that is a HUGE pet peeve of mine.




This is NOT a saying. It it a mis-quote. It is just wrong.


The saying is, "for all intents and purposes"


Pedantic rant over. You may all go back to talking about luxury taxes and salary caps.

There, their, they're, it'll be all right. . .