"How Much Should New Owner Steve Cohen Spend This Offseason?"
The very course of the future of this franchise could change drastically due to increased spending, I'd say.
Under the Collective Bargaining Agreement, set to expire in December 2021, hefty luxury taxes could be incurred by any team for spending too much.
Wikipedia includes the following information re: the luxury tax:
Major League Baseball (MLB) has a luxury tax, called the “competitive balance tax”, in place of a salary cap in order to level the spending an individual team can spend on their roster.
The system today is based on the 2002 collective bargaining agreement. The 2002 CBA set the luxury tax threshold for the 2003–2006 seasons, was updated for the 2007–2012 seasons in the 2006 CBA, and was updated again for the 2013–2016 seasons in the 2012 CBA.
The 2016 CBA has set the threshold for the 2017–2021 seasons. For 2021, the threshold is $210 million.
So, how much are the penalties? Wikipedia says:
The 2016 CBA has set the luxury tax threshold for the 2017–2021 seasons. Under the 2016 CBA, first time offenders would pay a fee of 20% on the dollar, second time offenders would pay a 30% on the dollar, and third or subsequent time offenders would have to pay 50% on the dollar (These offenses must be in consecutive years for these percentages. If a team falls below the threshold one year the penalty re-sets the next year to the "first offense").
In this case, Wilpon cheapness helps Mr. Cohen as, to my knowledge, the Mets have never paid luxury tax, so the first time luxury tax was paid (let's say for 2021) the fee would be "just" 20%.
A few teams have paid enormous amounts of luxury tax cumulatively. The Yankees have paid, I believe, more than $400 million in luxury taxes since the system first started, and and the Dodgers have paid out far north of $100 million. Both teams are perpetually relevant in Division champion and playoff action, in good part due to spending over the cap many times.
Since the Mets to my knowledge have never incurred the luxury tax, a big splash this off-season is not especially dis-incentivized by blasting through the cap for 2021, since the tax rate would be 20%.
Smart but very significant expansion of payroll may cause the cap to be substantially cleared, but if success comes with it (such as Mets winning the Division in 2021 and going deep into the playoffs), money is recouped through playoff revenues AND higher turnstile revenues, AND franchise value is typically significantly higher for winning, RELEVANT franchises.
And heck, the team's fans are deliriously happier. Their team has SWAGGER and is RELEVANT.
The Yanks and Dodgers may not be racking up World Series titles of late, but they are (in the baseball universe) relevant franchises.
The Mets, up until now, have been only relevant on relatively few occasions over the past 30 years...and that does not make them relevant. People everywhere, if you ask them about truly relevant teams, will include the Yanks and Dodgers in the short list. The Mets? Nope.
That can all change with boatloads of spending this off-season. Especially when players will be available at discounts because of a massively money-losing season for the other owners, including the normally big-spending Yankees. Which = a big, big strategic advantage to Cohen in winning battles to acquire talent.
Damn the luxury tax, full speed ahead towards relevance, I say. After all, it's only Monopoly money.
8 comments:
The problem with the luxury tax is how to recoup it. Expect parking to jump to $50 per game, beers to $15 each and tickets to surpass $100 each.
I think, Reese, that it could be similar to supply side economics. A 100 win Mets team brings in (under normal conditions) 500,000 to 1 million more fans, more concessions and merchandise, and more TV ad revenue. I am sure owners do what-if studies. I wonder where break even would be?
Reese, another constraint is uncertainty when the CBA is renegotiated next year. I imagine that could impact the luxury tax. Baseball needs a big, strong, beautiful vaccine - fast. The whole country does.
I'm not so sure the Mets have to break the bank at all with what we are seeing already with some of these team maneuvers. You might be able to get some pretty great talent at a pretty reduced rate right now. Likewise they may be able to lockup some of their other young talent(conforo,syndergaard) at a discount due to the uncertainty of covid and the sport in general.
The top few free agents will get paid but I'm guessing there is a steep drop off after that with just seeing Hand going through waivers unclaimed.
Dallas, that is true. What a time to have an owner who will spend - when players will be cheaper to acquire. Question is, can he get everything he NEEDS under the cap? Maybe.
But there are so many needs, and the cap can not be a barrier to a top flight team if it costs more than the cap tp get there, even with discounts.
Jake, for one, won't be elite forever, and elite players are needed to WIN world series...getting there is real nice, but winning it is so much better.
Of course, once you pierce the cap, it may be hard to get back to the other side. But I go back to my premise: the Yankees and Dodgers have not feared the cap and whether they win a lot of World Series or not, they sure get to the playoffs a lot. We, on the other hand, miss the playoffs an awful lot.
This team needs to join the Perennial Playoff Club. It will take $$.
I get into this more tomorrow.
For once, the stars are lining up for the Mets. As they say, timing is everything. Will they need to spend like drunken sailors to assemble the pre-season favorite next year? Will they be able to even assemble the NL East favorite? I doubt each, but what they should be able to do is to take advantage of a drop in prices, buyer's market, and frugality around the league to provide a big player or two along with depth upgrades to strengthen the entire roster, an most specifically the pitching. I would like to see a strategy that improves competitiveness in 2021 but leaves flexibility going forward. Yes, they'll be able to afford mistakes better, but I'm hoping they can avoid more mistakes as well.
Here is a thing that has me puzzled....peoples obsession with Lindor...they compare him to Betts. Betts is a 10 WAR type guy. He had five 6WAR+ seasons with this year being close to 9 if projected over a full year. Lindor has had one 6WAR+ season. No question he is a really good player but Betts is next level. Barron wants to send out Nimmo (2 years control), Gimenez(5 years control) and prospects to pay Lindor 20 million in arbitration.
Lets just look at our small sample sizes in 2020:
Lindor: .8 WAR in 236AB
Gimenez: 1 WAR in 118AB
Nimmo: 1.8WAR in 186AB
Of course you can't use last year as the full barometer but Gimenez was pretty exciting in the field, on the bases and he hit pretty decent at age 21...
Amazing point Dallas. The Mets have multiple areas of need - one of them is not shortstop. If you are going to invest $ and players do it for an area of need - CF - C - Starting Pitcher - Bullpen. Not SS.
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