Tigers owner Ilitch won't comment on MLB luxury tax report
Lakeland, Fla. — The Athletic reported on Friday that four Major League Baseball owners, including the Tigers’ Christopher Ilitch, objected to raising the competitive balance tax in the owners’ best and final proposal on a new collective bargaining agreement that was presented to the players association earlier this week.
That proposal was rejected immediately by the union, even with a $10 million increase in the threshold, upping it to $220 million. The players wanted it raised to $238 million.
The negotiations broke off at that point – though the sides are still talking and sharing proposals – and the first two series of the regular season were cancelled by commissioner Rob Manfred.
“Whether you're an owner, player or fan, we're all eager to get baseball back on the field,” Ilitch said in a statement Friday night. “As we continue working towards that goal, it’s not helpful to the process for me to comment on internal MLB matters or speculation.
“We’re all ready to feel the excitement and energy of the season here in Detroit, and know our fans are looking forward to enjoying Tigers baseball as soon as possible.”
Besides Ilitch, the Reds' Bob Castellini, Diamondbacks' Ken Kendrick and the Angels' Arte Moreno, also reportedly voted against the proposal in the owners’ caucus.
The Athletic cited three anonymous sources who were “briefed on an owner-side call held this week.” A league source close to the negotiations told The Detroit News that there was no confirmation about how or on what any owner voted.
Also, the source said, the report speculated that the four owners specifically voted down the raise in the competitive balance tax, but those opposing votes could have been cast for any number of other reasons.
Regardless, the proposal was passed by 26 of the 30 teams. The opposing caucus votes were rendered meaningless. Doubly so after the union rejected it.
Some perspective: The owners, from the start of the negotiations, have been unified in their goal to maintain the current levels of the CBT threshold. Manfred said repeatedly that the CBT was the only mechanism available to help level the playing field between big market and smaller market franchises.
“Changing the current agreement by taking resources away from clubs with limited revenue would make the game less competitive,” he said.
Baseball is the only sport with no salary cap — though the players contend the CBT acts as one. Baseball is absolutely the only sport with such a drastic payroll disparity — in 2021 the Dodgers payroll was $286 million and the Orioles was $42.4 million.
The union has steadfastly rejected a salary cap, leaving teams with the CBT as the only governor on payroll spending. And initially, the owners wanted to harden the CBT, make it more punitive against teams that went over.
The players resisted and the league took it off the board. The $10 million increase was a compromise.
That the clubs were willing to raise the threshold at all, even though it was still well below what the players are seeking, was a concession. That three small-to-mid market teams voted, in caucus, to keep the CBT levels as they were shouldn’t be that surprising.
Especially given the very likelihood that the playoff format will be expanded under the new agreement, be it to 12 teams or 14 teams. That would be a boon to small- and mid-market teams and another reason to hold firm on the luxury tax threshold.
Buster Olney of ESPN reported Friday that the union told the league it would be open to reopening negotiations on a possible 14-team playoff and back off their CBT resistance.
Regarding Ilitch, though, even if he was opposed to raising the CBT – and again, the report cites his vote in a caucus, not in ratification, a key distinction – that isn’t necessarily a vote against increasing his own payroll. The Tigers spent $225 million on Javier Baez, Eduardo Rodriguez and Tucker Barnhart before the lockout.
Once the lockout is lifted, the Tigers are expected to sign at least one more starting pitcher and possibly another reliever.
They also went out the year before and signed the most sought-after and presumably expensive manager on the market in AJ Hinch.
“This is a turning point, undoubtedly,” Ilitch said after the Tigers signed Baez. “It sends a message to the rest of baseball. The Tigers are here to compete.”
An alleged vote to hold firm on the luxury tax threshold doesn’t necessarily contradict that statement.
More significant is that four owners took a hard line against the proposal, whether it was because of the CBT or other issues. A new collective bargaining agreement will require 23 votes from the owners. The margin is thin.
The proposal the owners made earlier this week represented a huge win for the players in multiple areas – including raises in minimum salary, increased signing bonus pools, more money and more opportunities for younger players, a universal designated hitter, the end of draft pick compensation on free agency, a draft lottery.
Further obstinance from the union, as it is perceived by the owners, could push more owners against the current CBT proposal.
The positive news is that lead negotiators on both sides met on Thursday and a new round of talks could be scheduled for next week.