Friday, November 2, 2018

It's Official: Only The Red Sox And The Nationals Exceeded Salary Cap In 2018

Multiple reports indicate that Major League Baseball has officially acknowledged that only two of their thirty franchises exceeded the 2018 payroll threshold of $197 million—kicking in the Competitive Balance ("luxury") Tax. The two are: the World Series Champion Red Sox and the Washington Nationals. The estimated 2018 payroll for the Red Sox is $238.4 million. Because Boston did not exceed the threshold in 2017, they are "only" subject to a 20% tax rate on the amount over $197 million. However, because they also have payroll over $217 million an additional surtax of 12% kicks in on that overage. But wait, MLB's not done taxing The Carmine Hose yet! There's an additional 42.5% surcharge assessed on payroll beyond $237 million. It gets better! In addition to all these monetary penalties, the Red Sox will also have their next draft pick moved back ten spots. But they do get a lovely set of steak knives from Commissioner Rob Manfred. Yikes! Good thing they won the whole enchilada—which kind of makes it worth it!