Competitive Balance Tax

[NJ Ave]

I offer the Jordan Zimmermann deal, seriously.

I doubt they want to give that kind of long-term commitment to an injury risk when they don't yet know if the team is taking a step back next year or not. Why not just wait and see who's available at the trade deadline at the end of their deal?

[HalfSmokes]

I doubt they want to give that kind of long-term commitment to an injury risk when they don't yet know if the team is taking a step back next year or not. Why not just wait and see who's available at the trade deadline at the end of their deal?

there are players worth giving up deadline flexibility for- Jake Arrieta is not one of those players

[varoadking]

I offer the Jordan Zimmermann deal, seriously.

Look how well that turned out for the Tigers...

I haven't done the same research you did, but I say move on...this guy is not the answer...in my mind-fact way of thinking...

[varoadking]

Where is ZDK when we need him? 

[bluestreak]

Forbes: the bastion of baseball analysis....

[Mattionals]

there are players worth giving up deadline flexibility for- Jake Arrieta is not one of those players

The team needs a long term catcher AND another starter. I feel Lucroy is another Matt Wieters waiting to happen. I think a number 3 starter will cost more in trade than Realmuto, and the team has stated that they aren't trading Robles or Soto, and that limits what they can get back in return.

[NJ Ave]

The team needs a long term catcher AND another starter. I feel Lucroy is another Matt Wieters waiting to happen. I think a number 3 starter will cost more in trade than Realmuto, and the team has stated that they aren't trading Robles or Soto, and that limits what they can get back in return.

This team doesn't need another starter right now. We have 3 starters who are projected to be worth more than Arrieta in the regular season (including damn Gio) and Roark is projected at 2.2 wins.

It would be preferable not to enter the playoffs with Gio as a 3rd starter, but that doesn't mean Arrieta is the answer at 5 plus years and $100 million plus. And just because we'd prefer not to use Cole/Fedde/Jackson as our 5th starter in the regular season, again - that doesn't mean we need to sign a 5th regular season starter who costs $100 million.

Anyways, I don't blame you for wanting another pitcher considering we have a couple starts who've underwhelmed in the playoffs (to put it mildly), and I'm not necessarily saying you're wrong. I'm just pointing out an alternative viewpoint.

[dcpatti]

The team needs a long term catcher AND another starter. I feel Lucroy is another Matt Wieters waiting to happen. I think a number 3 starter will cost more in trade than Realmuto, and the team has stated that they aren't trading Robles or Soto, and that limits what they can get back in return.

Kieboom has started hitting better. He’s always had a good glove and good arm. He’s never going to run fast but that’s true about most catchers. If he can continue to put his swing together, he might be an option, although personally I think a 2019 arrival might be pushing it. Assuming Wieters is not flat-out awful this season, it’s going to be interesting to see what they do with Kieboom.

[PowerBoater69]

Forbes: the bastion of baseball analysis....

They do a lot of reporting on the business side of sports.

[bluestreak]

They do a lot of reporting on the business side of sports.

That’s the problem though. They are focusing on the business and not the baseball analysis, which would explain why the Nats don’t want to sign Arrieta.

[PowerBoater69]

What 42% tax?

After passing $20 million over the cap the tax increases by 42%. So the Nats would pay 72% if they went that far over. Not bad if you go just a little over, but high enough to discourage teams from blowing past the cap.

[PowerBoater69]

That’s the problem though. They are focusing on the business and not the baseball analysis, which would explain why the Nats don’t want to sign Arrieta.

Seems like a legitimate topic for a sports business writer to discuss the tax impact of a high dollar signing, regardless of projected future potential of the individual player.

[Mattionals]

After passing $20 million over the cap the tax increases by 42%. So the Nats would pay 72% if they went that far over. Not bad if you go just a little over, but high enough to discourage teams from blowing past the cap.

OK, I see it now, it goes up to 42% if they spend over 217 Million. It isn't 72%, that only happens if they exceed 237 Million.

That changes things considerably, and I didn't realize that escalator was in there. That means with Arrieta on top of current payroll at 205 ish CBA Tax, that is an additional 10.5 Million dollars, or one more Wieters in salary.

Forget the Zimmerman contract, Arrieta would have to take something around 12M annually in order for everything to work, and that likely won't happen. In order for anything to really work out, another team would have to take on significant salary of Wieters AND Kelley to free up enough room under the CBA.

Well, nevermind then. 

[bluestreak]

Seems like a legitimate topic for a sports business writer to discuss the tax impact of a high dollar signing, regardless of projected future potential of the individual player.

Oh, no, I’m not saying that they shouldn’t write about it or that it’s not an interesting business topic. I’m just saying that their lack of baseball perspective leads them to the wrong conclusion. If Clayton Kershaw were available for what Arrieta was asking, they would sign him tomorrow, regardless of the tax implications. This article implies the luxury tax is the reason Arrieta isn’t signed. The real reason is he is a 30 year old pitcher already in decline.  The lack of actual baseball insight makes them miss this nuance and causes them to make the completely wrong point.

[dcpatti]

Oh, no, I’m not saying that they shouldn’t write about it or that it’s not an interesting business topic. I’m just saying that their lack of baseball perspective leads them to the wrong conclusion. If Clayton Kershaw were available for what Arrieta was asking, they would sign him tomorrow, regardless of the tax implications. This article implies the luxury tax is the reason Arrieta isn’t signed. The real reason is he is a 30 year old pitcher already in decline.  The lack of actual baseball insight makes them miss this nuance and causes them to make the completely wrong point.

 

[PowerBoater69]

Oh, no, I’m not saying that they shouldn’t write about it or that it’s not an interesting business topic. I’m just saying that their lack of baseball perspective leads them to the wrong conclusion. If Clayton Kershaw were available for what Arrieta was asking, they would sign him tomorrow, regardless of the tax implications. This article implies the luxury tax is the reason Arrieta isn’t signed. The real reason is he is a 30 year old pitcher already in decline.  The lack of actual baseball insight makes them miss this nuance and causes them to make the completely wrong point.

If not for the tax then Arrieta would probably already be signed to a large contract. Age and declining production never stopped guys from getting signed before.

[NJ Ave]

The real reason is he is a 30 year old pitcher already in decline.

Right, I mean he turns 32 tomorrow and wanted $200 million - basically the Greinke/Price contracts. Pesky facts, though:

Age heading into free agency
Price: 30
Greinke: 32
Arrieta: 32

Career WAR heading into free agency
Price: 32
Greinke: 46
Arrieta: 21

Previous 2 seasons combined WAR heading into free agency
Price: 12.5
Greinke: 10.1
Arrieta: 6.2

I mean...sorry/not sorry?

Johnny Cueto got 6/$130 million that year but was 2 years younger than Arrieta with more career WAR and 8.6 WAR in his previous two seasons compared to Arrieta's 6.2.

[NJ Ave]

If not for the tax Arrieta then Arrieta would probably already be signed to a large contract.

FTFY. If Arrieta wanted to be realistic about non-ace pitchers not being signed into their late-30s, he'd be signed already.

Basically, if Arrieta wanted 6/7 years, he shoulda been younger. If he wanted $30 million a year, he shoulda been better.

End of story.

[Mattionals]

FTFY. If Arrieta wanted to be realistic about non-ace pitchers not being signed into their late-30s, he'd be signed already.

Basically, if Arrieta wanted 6/7 years, he shoulda been younger. If he wanted $30 million a year, he shoulda been better.

End of story.

I don't think a 5 year deal is the end of the world, but now after seeing the luxury tax implications, I would not exceed 5/75. He will be a number 5 at that point, but I have to believe that number 5 pitchers on the open market will likely be worth 15 Million a year in 5 years.

[HalfSmokes]

I don't think a 5 year deal is the end of the world, but now after seeing the luxury tax implications, I would not exceed 5/75. He will be a number 5 at that point, but I have to believe that number 5 pitchers on the open market will likely be worth 15 Million a year in 5 years.

Unless there’s a big change, I think salary inflation is slowing and will continue to do so (I say I think because I’m too lazy to look it up)

[PowerBoater69]

Unless there’s a big change, I think salary inflation is slowing and will continue to do so (I say I think because I’m too lazy to look it up)

Salary inflation is slowing, profit inflation is growing, which is why the players are regretting the bad CBA deal they signed. With no CBT the market would be business as usual for marginal players getting big money.

[JCA-CrystalCity]

Article from Forbes says the Nats won't sign Arrieta because of CBT.

https://www.forbes.com/sites/waynemcdonnell/2018/03/05/perfect-in-theory-for-fans-but-arrieta-and-nationals-are-a-tax-mismatch/#4540ebb88e5f

To add an additional layer of complexity to an already confusing situation, Arrieta was extended a qualifying offer by the Cubs for $17.4 million. He declined the offer and now the Cubs will receive a compensatory pick after the Competitive Balance Round B of the 2018 Amateur Draft. If the Nationals do indeed sign Arrieta, they would have to forfeit their second highest and fifth highest remaining selections in the draft as well as see a significant decrease ($1 million) in its International Signing Bonus Pool.

I think the bolded text is the bigger reason they will not sing Arrieta than the lux tax implications.  This system is top heavy and is pretty dependent on the Dominican and Caribbean signees for what quality  they have in the system.  Losing $1MM in the bonus pool is a big penalty for them, and a 2 and a 5 should get them one contributor, too.

[imref]

Arrieta must really be regretting not taking that QO

[PowerBoater69]

I saw a couple comments on whether the trades today would get the Nats below the luxury tax threshold, the answer is no, the Nats are still about $8.5 million over. And with the decision to not move Harper it is now extremely unlikely the Nats will be able to get below the cap. Before today the Nats were about $12.5 over and they cleared $4 million.

With all of the expiring salaries the Nats will have about $65 million in space below the cap for 2019. Which is good because there will be a 50% penalty for going over again next year.

Click on the Tax Tracker tab:
https://docs.google.com/spreadsheets/d/1pYOXA84by2StojXnMcU72WXIw3pP6-9NOlUEnnY-4iw/edit#gid=0

[PowerBoater69]

Here are the COTS numbers adjusted based on the fire sale, with a number of unknowns: