He is ready to pay the highest luxury tax in history. “Lots of money but ok”

Lockout is a completely unknown institution in our European sport. However, in the USA there is a practice that is often found. Roughly, the owners of the clubs decide to suspend an entire league. The players do not have the right to even pass the gate leading to the parking lots of the club facilities. These contracts are suspended. The players are deprived of the opportunity to work. Yes, theoretically there is a possibility that during the lockout they could play in other leagues outside the US. Outside the US, however, pennies are paid compared to what MLB, NFL, NBA or NHL players earn. Better to wait because in the end which side has to bend

A lockout occurs in American leagues when the collective agreement between the club owners and the players’ trade union expires. Sometimes it happens that it is possible to extend it because it serves the interests of both parties to an equal extent. Most often, however, the expiry of a collective agreement becomes an opportunity for both parties to try to increase the scope of their rights and improve their financial situation.

Sport works outside the normal law. LeBron James can’t make $ 100 million a season

Such a collective agreement outside of sport is actually illegal because it violates antitrust and labor law. After all, an employee must not be forced to associate in the only approved trade union in the entire industry. Nor can employers be allowed to regulate the market by setting upper and lower earnings limits for workers in their industry. But all of this is allowed in American sport, because long, long ago, club owners – first baseball and then others – persuaded legislators that their activities should enjoy special privileges.

There have been attempts – the last one in the NFL lockout – to bring these privileges to the Supreme Court. But nothing came of it, because these players understand that the collective agreement protects them much more than the ordinary labor law. That is, the collective agreement is very unfavorable for the biggest stars. He could earn over $ 100 million a season instead of the current $ 42 million if there was a free market in the NBA basketball. But the vast majority of players through collective bargaining earn much more than their sporting class would indicate. Hence, we are often surprised by the multi-million dollar earnings of reserves in the NBA.

Collective bargaining is mostly about money. It was the same for MLB, when club owners announced a lockout last December.

The billionaire ready pays the highest luxury tax in history

Contrary to the NBA, NHL or NFL leagues in MLB there is no so-called , or “caps”, under which the club’s expenses on players’ salaries must fit. There is, however, a luxury tax that must be paid by those who spent the most on players. In MLB, this reduction was 210 million. Now the players have raised the limit to 230 million and they got it.

The tax got a new name – Steve Cohen Tax – from the name of the owner of the New York Mets. The billionaire, whose wealth is estimated at $ 15 billion, will buy Mets for $ 2.4 billion and spares no money on the so-called free agents – players whose contracts expire. Already, New Yorkers have a salary budget of around $ 285 million a season, and they are likely to become the first team in history to exceed $ 300 million a year spent on players’ salaries.

It is worth explaining here that the luxury tax also works that the higher the expenses are over USD 230 million, the more the club owner has to contribute to the joint treasury of the league, which then divides this money between the teams that are the least performing economically. The upper tax cap is $ 290 million, but Cohen has no intention of stopping at that amount, as he announced in an interview with the New York Times on Sunday. – $ 290 million is a lot of money to spend, but it’s OK for me. This is not something that would pester me so that I wouldn’t be able to live with it.

Increasing the luxury tax limit is not the only victory for competitors. The second is a higher minimum wage. It will amount to 700 thousand. dollars for the season. Previously, it was 570 thousand. Increase by 130 thousand year on year is the biggest leap in history.

The second richest league in the world pays its players the least

However, analysts are of the opinion that the players could have won more. MLB, although the average salary in it is 4.2 million dollars per season and is much higher than in the NFL or the NHL, it spends the least of all leagues on players’ salaries. In 2021, with the league’s revenues of $ 11 billion (second place in the world after the NFL in this respect), players earned a total of 4.05 billion. In other leagues, players get a much higher percentage of revenues: in the NBA – 51 percent, in the NFL – 48.8 percent, and in football leagues – 60-70 percent.

Because of this very favorable income-to-cost ratio for club owners, baseball teams are considered a very profitable capital investment. Over the past 20 years, the value of teams has increased by 669 percent, according to the Los Angeles Times.

In addition to earnings, a new league schedule has been established in the new baseball league collective agreement and the number of play-offs has been extended from 10 to 12. It has also been agreed that league games can be played outside the US. Asia (South Korea, Japan, Taiwan), the Dominican Republic, London, Mexico, Paris and Puerto Rico are among the potential locations. These new draft rules were established and, for the first time in history, clubs were allowed to sell ad slots on T-shirts.

The new season will start on April 7. Even though League Commissioner Rob Manfred has canceled the first week of the tournament, all teams will have a full 162-game schedule. Canceled matches will either be played on days off or will be packed as additional matches on the same day. The teams play two matches with the same opponent on the same day more than once. And, interestingly, nobody complains that it is boring.

Atlanta Braves defends title.