Max Scherzer Uses Yankees to Make Point About CBT

The Mets ace brought up the Yankees and Padres when explaining how some teams view the Competitive Balance Tax as a de facto salary cap.

Max Scherzer echoed familiar criticisms of the Yankees on Tuesday when discussing MLB’s Competitive Balance Tax.

Scherzer spoke as part of a union panel following the league’s decision to cancel games, a choice that was made after owners and the MLBPA didn’t agree on a new collective bargaining agreement before an MLB-imposed 5 p.m. deadline. One of the main issues was the CBT, also known as the luxury tax, and the penalties for teams that exceed its thresholds. Here’s what the two sides proposed regarding the CBT, via MLB Trade Rumors:

• MLB: Base thresholds at $220M in 2022, $220M in 2023, $220M in 2024, $224M in 2025, $230M in 2026

• MLBPA: thresholds at $238M in 2022, $244M in 2023, $250M in 2024, $256M in 2025, $263M in 2026

• Gap: $18M in 2022, growing to $33M in 2026

The CBT threshold was $189 million from 2014-2016 and incrementally increased from 2017-2021. It was $210 million last season.

The CBT was initially seen as a way to limit breakaway spending. However, it has functioned as a de facto salary cap, with big market teams often refusing to exceed the thresholds in order to avoid the costly penalties. The Yankees have been among those teams in certain years, including 2021, a fact Scherzer referenced by noting that the financial behemoths had a smaller payroll than the San Diego Padres.

Scherzer on why the luxury tax system needs to improvement: said it was first implemented to rein in breakaway spending but has become a salary cap. “No other way can it be shown, point blank & simple, than the San Diego Padres having a higher payroll than the New York Yankees.”

— James Wagner (@ByJamesWagner) March 2, 2022

The Yankees were just over $208 million in 2021, per Cot’s Baseball Contracts. With the goal of resetting penalties in mind, they were sure to stay below the $210 million threshold, even when upgrading before the trade deadline. The Padres were over $216 million, per Cot’s. Meanwhile, prior to the lockout, Scherzer signed with Steve Cohen’s Mets, who spent as if the CBT doesn’t exist. Scherzer’s record-setting, three-year, $130 million deal was part of a spending spree that exceeded $250 million before rosters froze.

Such spending used to be expected of the Yankees on a yearly basis, but owner Hal Steinbrenner said he’d be okay with an even lower CBT threshold prior to CBA negotiations.

READ: Brett Gardner Plans to Play in 2022, Prefers to Return to Yankees

While the Yanks have annually remained among the leaders in payroll and have made pricey splashes that force them to exceed thresholds – like signing Gerrit Cole before the 2020 season – there is no question their adherence to the CBT has handicapped their roster construction in certain years. It has also brought about criticism from fans and pundits. New York’s decision to stand pat in free agency prior to the lockout – while other teams splurged – increased skepticism over whether the organization will make necessary upgrades whenever the market re-opens.

GM Brian Cashman previously said that he expects the club’s payroll to increase in 2022, but that was always bound to happen with little money coming off the books and a bevy of high-profile Yankees due for raises via arbitration. New York, following an inconsistent season, has question marks at shortstop, first base, center field and in the rotation, among other positions. Will it spend the money needed to quell some of those concerns?

Recent history warrants doubt, but it will take some time for that question to be answered as MLB and the union prepare for more negotiations. Expect the CBT to remain a sticking point whenever the two sides start talking again.

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