At what level do draft penalties such as the ten strike in the first round and increased forfeiture of draft picks for signing a QO attached FA kick in? Is it possible for the Mets to get under this if they don’t sign Yamamoto?
The draft penalties (having your highest pick drop back 10 spots) kick in when you are $40 million or more above the threshold. So in 2024 that would be $277 million, which the Mets are already above. If the Mets don't sign Yamamoto, there is definitely more breathing room to reset the tax in 2025, especially if Verlander doesn't pitch 140 innings this year to trigger his 2025 option.
The initial tax threshold is written into the CBA to increase roughly $4 million each season, and then each additional threshold jumps $20 million on top of that.
are there additional draft penalties (such as losing picks outright) if you're over the tax limit for a certain number of years? I thought that used to be a thing which was part of the reason teams wanted to reset the clock every few years (the Red Sox and Dodgers did this to name ones that I can recall).
There are no additional draft penalties. Teams try to avoid becoming repeat offenders because the surcharges jump each year from 20% the first $20 million over to 50% the first $20 million over as a third-time payor. And they get more expensive from there.
Awesome accounting. Thanks for putting this all together for us.
WOW thats very very detailed accouting and must have taken a ton of time to do. Not usre i understand it all but still very very good info.
At what level do draft penalties such as the ten strike in the first round and increased forfeiture of draft picks for signing a QO attached FA kick in? Is it possible for the Mets to get under this if they don’t sign Yamamoto?
The draft penalties (having your highest pick drop back 10 spots) kick in when you are $40 million or more above the threshold. So in 2024 that would be $277 million, which the Mets are already above. If the Mets don't sign Yamamoto, there is definitely more breathing room to reset the tax in 2025, especially if Verlander doesn't pitch 140 innings this year to trigger his 2025 option.
Thanks! Do the tax thresholds adjust for inflation, or are they fixed for the life of this CBA?
The initial tax threshold is written into the CBA to increase roughly $4 million each season, and then each additional threshold jumps $20 million on top of that.
are there additional draft penalties (such as losing picks outright) if you're over the tax limit for a certain number of years? I thought that used to be a thing which was part of the reason teams wanted to reset the clock every few years (the Red Sox and Dodgers did this to name ones that I can recall).
There are no additional draft penalties. Teams try to avoid becoming repeat offenders because the surcharges jump each year from 20% the first $20 million over to 50% the first $20 million over as a third-time payor. And they get more expensive from there.
Thank God we have accountants.