This article is free for anyone to read, but please consider becoming a Patreon subscriber to allow me to keep writing posts like this one. Sign up to receive articles like this one in your inbox here.
Just a few weeks back, in reaction to one of the few economic proposals Major League Baseball actually bothered to submit while the now-expired collective bargaining agreement was still active, I wrote about how MLB’s pay-for-WAR, algorithmic plan to replace arbitration could not work without revenue scaling. Two days into the lockout, it’s time to give another example as to why any of these plans that rely on bargaining financial thresholds have the same inherent problem, and that’s because of how MLB has treated the raising of the luxury tax threshold during talks so far.
As was reported by Evan Drellich, MLB proposed raising the luxury tax threshold from the 2021 figure of $210 million to $214 million, with it eventually reaching $220 million by the final year of the new CBA. That’s clearly just a starter offer in terms of raising the luxury tax threshold — the numbers would almost surely be at least a little bit bigger if the two sides were finished negotiating by now — but what sticks out to me is that it’s presented as a concession at all. Not by Drellich, who is one of the few writers at a major outlet who is actually nailing the framing and depth of their coverage, but by MLB. Inflation exists. Revenues climb. The value of money changes over time. The luxury tax threshold increasing should just be a thing that is expected to happen, not something that is considered a concession, especially not with the minuscule bumps the league is proposing.