Cleveland Sports Forum

McCullough: Why are teams so afraid of the competitive balance tax?


By Andy McCullough 4h ago 32
The three letters resurface each winter, when the owners of contenders pocket their wallets, and again each summer, when executives contemplate calculus at the trade deadline. The letters were invoked when the Red Sox dealt away Mookie Betts and when the Dodgers traded Adrián González and Yasiel Puig. They came up once more earlier this month, after the Mets acquired Francisco Lindor and Carlos Carrasco: Would the three letters inhibit further spending? Were the Mets wary of the competitive balance tax, the dreaded CBT?

“Well, it’s a significant demarcation,” Mets president Sandy Alderson said. “I wouldn’t say that it’s a line that cannot be passed, but it’s definitely a significant consideration when you get to that level.”

By instructing Alderson to mind the luxury-tax threshold, which will increase to $210 million for the 2021 season, new Mets owner Steve Cohen has conformed with his 29 colleagues in baseball’s ownership class. The competitive balance tax operates as baseball’s de facto salary cap, which is one factor to explain why top free agents like J.T. Realmuto and Trevor Bauer remain unsigned with the scheduled start of spring training less than a month away.

A thaw may be coming: DJ LeMahieu returned to the Yankees last week, and George Springer has just become this winter’s first nine-figure player. But even the construction of LeMahieu’s contract and the nature of Springer’s free agency demonstrated the deference teams pay to the CBT.

The Yankees stretched LeMahieu’s $90 million package across six seasons to dilute the contract’s average annual value, which is the metric Major League Baseball uses to calculate the yearly luxury-tax payroll. And as the Mets haggled with Springer, the team weighed how a long-term deal with the free-agent center fielder would complicate extensions for pending free agents like Lindor and Michael Conforto. Toronto won the bidding by offering six years and $150 million — unlike the Mets, the Blue Jays were not close to hitting the $210 million threshold in 2021.

Grappling with the luxury tax is not a phenomenon unique to New York. The entire sport quakes before it. Only three teams — the Yankees, Astros and Cubs — were charged the competitive balance tax for 2020, according to people with knowledge of the situation. All three teams hope to avoid it in 2021. The Cubs are engaged in a teardown. The Astros let Springer walk to Canada. The Yankees, who are actually entertaining the concept of winning the World Series this season, intend to hew to the line for the entirety of the year.

That fits a pattern. When teams do spend enough to incur the tax, they soon scurry away from it, even as the number rises each season — from $195 million in 2017, to $197 million in 2018, to $206 million in 2019 and $208 million in 2020. The Red Sox, Yankees and Cubs paid the tax in 2019, according to the Los Angeles Times. The Associated Press identified the Red Sox and the Nationals as the only teams to surpass the limit in 2018.

This behavior is a feature, not a bug, of the current collective bargaining agreement, which expires after this season. A luxury tax has existed in baseball in some form or fashion since 1997, save for a tax-free interregnum from 2000-2002. The most recent iteration features progressively escalating penalties: First-time offenders pay a 20-percent tax, two-time offenders pay a 30-percent tax and three-time offenders pay a 50-percent tax.

The penalties sound prohibitive. But the tax does not apply to the entire payroll — it only applies to the difference between the team’s luxury-tax figure and the threshold. Say a team finishes the 2021 season with a $211 million payroll. Based on the CBA, the franchise would owe $200,000 in taxes. Place that sum within the context of the rising franchise values within the sport. For reference: $1,000,000,000 features 5,000 increments of $200,000.

As The Athletic‘s Jayson Stark outlined last year, the CBA contains further impediments to spending in the form of additional surcharge thresholds, the first at $230 million and the second at $250 million for 2021. A third-time offender, in theory, would pay a 95 percent tax for surpassing that second threshold. Any team that exceeds the second surcharge threshold also suffers in the draft, with its first pick falling 10 spots.

These payroll numbers, of course, are mostly fantasia. Just four teams spent more than $200 million in 2019, the last season in which players received their full salaries, according to Spotrac. After the Red Sox, Yankees, Dodgers and Cubs, the Giants clocked in fifth place at $178.6 million. The overwhelming majority of baseball teams have determined that it is not worthwhile to even flirt with the luxury tax, let alone pay it.

The current stagnation stems from a confluence of factors. When paired with the aftershocks of the 2020 season, the ambiguity pertaining to this coming year has made it challenging for executives to craft budgets and unwieldy for business departments to project future revenue. The sport also offers fewer incentives for teams chasing greatness. With the prospect of further playoff expansion on the horizon, the value of a division title continues to decrease. If 88 wins offers a similar shot at a title as 92 wins, why pay the extra freight?

Even at the upper end of the spectrum, for the big-market clubs willing to make nine-figure commitments to players, the pursuit of an individual title means less than the ability to pursue titles year after year. You hear the phrase “opportunity cost” so often, you start to forget what the actual opportunity is. Sustainability is king, and flexibility rides shotgun. Consider the recent examples of the Red Sox and the Dodgers.

After Guggenheim Baseball Management purchased the Dodgers in 2012, the team became the sport’s spending kings, leading baseball in luxury-tax payroll each season from 2013 to 2017, according to Cot’s Contracts. For five years, owner Mark Walter paid the tax, while the baseball operations department assembled a player-development machine on the farm system. The days of blasting past the threshold ended in the offseason heading into 2018, as the organization grew tired of the escalating penalties. The team traded González, along with Brandon McCarthy and Scott Kazmir, to Atlanta to reset its CBT payroll. A year later, Puig and Alex Wood went to Cincinnati, in part, for similar reasons. The Dodgers stayed under the line.

“The CBT is an element that does add expense, for sure,” Dodgers president Stan Kasten told The Athletic. “If we’re close, we’re going to pay attention to it. There are years where we blow right past it, and it’s not much of a factor. But every dollar is an extra dollar out the door that we need to try to recoup somehow. And a better business model is better from a lot of standpoints, including accessing financing, accessing debt, for all kinds of purposes.”

As belts tightened in Los Angeles, the Red Sox dropped $110 million on J.D. Martinez, barreled more than $40 million past the threshold and basked in a championship. The title came at the cost of nearly $12 million in taxes, plus their first selection in the draft did not come until the 43rd pick. It seemed like a reasonable price for a flag that flies forever. “Boston should be happy to pay this tax bill,” the Associated Press wrote.

And yet a season later, after the team lavished $68 million on Nathan Eovaldi and invested $145 million into an extension with Chris Sale, the Red Sox missed the playoffs and elected to regroup. After negotiations about an extension with Mookie Betts stalled, Boston listened to trade offers. The team intended to reduce its CBT figure, so they included former Cy Young Award winner David Price in the discussions. To get under the tax, the Red Sox needed to find a suitor with the flexibility to add significant salaries, a team with a willingness to spend, but capable of doing so while avoiding those three letters.

Boston sent Betts and Price to the Dodgers. It is an emblematic story for this era, a cautionary tale that reinforces the impulses of executives and owners to practice caution. It is as simple as CBT.

Cleveland never has to worry about this tax.

The Nationals have come to an agreement on a one-year, $10.5 million deal with lefty reliever Brad Hand, a source told MLB.com's Mark Feinsand.

The club has not confirmed the deal, which is pending a physical.

Yankees trade for Jameson Taillon. They're listing Kluber as No. 2 starter; Taillon No. 3 and Jordan Montgomery No. 4. The three of them last season combined to pitch 45 innings and win 2 games. In the full season in 2019 they combined to pitch 44 innings and win 4.

Reds left empty handed !


Didi Gregorius, Philadelphia Phillies agree to 2-year, $28 million deal, source says

11:45 AM ET
ESPN

Didi Gregorius is returning to the Philadelphia Phillies after the free-agent shortstop reached a two-year, $28 million deal with the team, a source confirmed to ESPN on Saturday.

Gregorius, who turns 31 on Feb. 18, proved to be a huge bargain in 2020 for the Phillies, who signed the free agent to a one-year, $14 million deal last offseason. He rebounded from an injury-plagued 2019 season with the New York Yankees by hitting .284 with 10 home runs, 40 RBIs and 34 runs scored -- and an .827 OPS -- for the Phillies during the pandemic-shortened season.

Gregorius missed extensive time for the Yankees in 2019 as he recovered from Tommy John surgery, which he had to repair an elbow ligament that was torn during the 2018 ALDS vs. Boston. He wound up hitting .238 with 16 home runs and 61 RBIs in 2019.

Over the past five seasons, Gregorius is tied for fourth with Xander Bogaerts among all major league shortstops in home runs (98), trailing only Trevor Story (134), Francisco Lindor (126) and Javier Baez (108). He is also fifth in RBI (344), ninth in slugging percentage (.469, with a minimum of 150 games) and ninth in extra-base hits (215) in that same span.

Gregorius has provided Gold Glove-caliber defense throughout his career, and his .978 career fielding percentage is the fifth-best among players with at least 800 games played at the position since 2012.

Overall, Gregorius has a .265 career batting average with 120 home runs, 457 RBIs and a .748 OPS over nine seasons with the Reds, Diamondbacks, Yankees and Phillies.

Gregorius' deal with the Phillies was first reported by The Athletic.

So what do they want to offer from one of our excess shortstops? Not some 29 year old rookie OF.

Would not be surprised if it would not be for a prospect and then the 2.5 million could be used elsewhere.

or Nick Senzel.

Senzel is the ridiculously obvious candidate.

Reds To Acquire Kyle Holder
By Anthony Franco | January 30, 2021 at 4:03pm CDT

The Reds are acquiring shortstop Kyle Holder in a trade with the Phillies, ESPN’s Jeff Passan reports (Twitter link). The move will free up a space on Philadelphia’s 40-man roster, so the Phils’ signing of Didi Gregorius could soon be officially announced.

Senzel's kind of a high price to pay for Rosario isn't he?

That is what the Reds are probably saying. Senzel has not done much. Both are 2nd baseman trying to learn CF.

Hmm, looking at his numbers I see what you mean. Senzel was pretty good in 2019 as a 24 year old rookie [not very young for a projected big star[ with line of 256/315/427. Kind of stunk last year with a line of 186/247/357 but the slugging was still pretty decent with more than half of his hits for extra bases. Compared to our 2nd year CF he was a superstar

oscar's first year 269/318/443 a tiny bit better than Senzel and he stole 15 bases.
oscar's 2nd year 128/174/174 makes Senzel look like an All Star by comparison

amed Rosario's "off year" in 2020 was 252/272/371 is slightly better only than Senziel since Rosario never walks and showed minimal power
Rosario in 2019 has a line of 287323/432 which is roughly identical to Senzel and Mercado when you look beyond just his batting average and he offered another bonus by leading NL in times caught stealing.

Oscar is the oldest of the three; he's 26; Senzel is six months older than the most experienced of the three Rosario who just had his 25th birthday

Five women accuse Mickey Callaway of lewd behavior: ‘He was completely unrelenting’

By Brittany Ghiroli and Katie Strang

Mickey Callaway, the former New York Mets manager and current pitching coach for the Los Angeles Angels, aggressively pursued at least five women who work in sports media, sending three of them inappropriate photographs and asking one of them to send nude photos in return. He sent them unsolicited electronic messages and regularly commented on their appearance in a manner that made them uncomfortable. In one instance, he thrust his crotch near the face of a reporter as she interviewed him. In another, he told one of the women that if she got drunk with him he’d share information about the Mets.

The five women, who spoke to The Athletic on the condition that they not be identified, said that the actions by the now 45-year-old Callaway spanned at least five years, multiple cities and three teams. Two of the women said they were warned about his behavior – from fellow media members and others who worked in baseball. An additional seven women who worked in various MLB markets said that, although they had not been approached by Callaway, they had been cautioned about him.

“It was the worst-kept secret in sports,” said one of the women.

The five women pursued by Callaway described a pattern in which he regularly contacted them via email, text messages or on social media, and often a combination of the three. His pursuit put them in a difficult position at work given what they perceived as a stark power imbalance. The women were forced to weigh the professional ramifications of rebuffing him.

In response to an email from The Athletic, Callaway wrote: “Rather than rush to respond to these general allegations of which I have just been made aware, I look forward to an opportunity to provide more specific responses. Any relationship in which I was engaged has been consensual, and my conduct was in no way intended to be disrespectful to any women involved. I am married and my wife has been made aware of these general allegations.”

The allegations against Callaway come less than two weeks after an ESPN report about former Mets general manager Jared Porter, who sent “explicit, unsolicited” texts to a female reporter while he was working for the Chicago Cubs. Porter was terminated the morning after the story was published, with Mets’ president Sandy Alderson denouncing Porter’s conduct, which the league is investigating, as “abhorrent and not tolerable in any shape or form.”

Callaway, who like Porter was hired by Alderson, spent two seasons with the Mets before he was fired in October 2019; he was hired as the Angels’ pitching coach later that month and remains with that organization. Before the Angels and Mets, Callaway coached in the Indians organization from 2010-2017, the last five as the team’s pitching coach.

On Mondays, MLB said it “has never been notified of any allegations of sexually inappropriate behavior by Mickey Callaway.” On Tuesday, The Athletic learned that MLB was launching an investigation into the allegations against him.

The Mets, when contacted by The Athletic, said that in August 2018 – about 10 months after Callaway joined the organization – the team learned of an incident that took place before it hired him. The team investigated that matter, a spokesperson said, but declined to reveal the nature of the incident, the outcome of that probe or whether Callaway was disciplined. Callaway continued managing the rest of the season.

The Angels, when asked to respond to the allegations, said: “The behavior being reported violates the Angels Organization’s values and policies. We take this very seriously and will conduct a full investigation with MLB.”

The Indians said in a statement: “We were made aware for the first time tonight of the allegations in The Athletic regarding Mickey Callaway’s behavior towards women. We are currently reviewing the matter internally and in consultation with Major League Baseball to determine appropriate next steps. Our organization unequivocally does not condone this type of behavior. We seek to create an inclusive work environment where everyone, regardless of gender, can feel safe and comfortable to do their jobs.”

In 2018, Samantha (a pseudonym), a reporter based in New York, received a surprising Facebook request from a “Mickey Callaway.” Convinced it was not actually from the then-Mets manager, she left the request pending. A few days later, Callaway saw her in the Mets clubhouse and wanted to know if she was “big-timing” him by not responding to the request. Samantha said she felt pressured to friend Callaway on Facebook.

Later, when he asked, she gave him her phone number, a request she thought was odd given it is usually a reporter’s job – and a tough one at times – to get a coach or player’s phone number.

“Two or three times a week for a month he’d send me shirtless selfies,” Samantha said, adding that he’d follow up with something like, “Now you send me one of you.” She never did, but that didn’t stop Callaway’s advances.

(The Athletic spoke with two people who verified that Samantha told them about Callaway’s attempts to solicit photos around the time it happened.)

“He would come up to me and massage my shoulders in the dugout when he thought no one was looking,” she said. “For a month, he would text me asking for nude pics. I started talking to people (who were in the media) and they said this isn’t an isolated thing.”

In one text, which The Athletic reviewed, Callaway wrote to the woman: “I bet you look yummy on tequila,” with a smiley face. In another, he wrote: “Our sleep doctor in Cleveland said you should always sleep naked. Healthier for your skin and rest so much better. Have to let perfect skin breathe!” That text went unanswered. So did his request to take her to a Lumineers concert.



“At the bar – how many shots are you taking?” read another text from Callaway accompanied by a smiley face. The woman said she never hung out with him or sent him anything suggestive in response. “I was just trying to be nice; he was the manager,” she said.

When Callaway was fired as Mets manager after the 2019 season, the text messages did not stop. Named the Angels pitching coach in October 2019, he texted her after what he claimed was his first day with Anaheim, telling her that people in his new organization had asked about her and commented on how “hot” she was.

“He was completely unrelenting,” she said.

The last two text messages she received from Callaway, in July and September 2020, also went unanswered, according to text logs reviewed by The Athletic.

Another New York-based reporter, Anne (also a pseudonym), said she was repeatedly contacted over email by Callaway. He had mentioned during his initial press conference that he was a coffee aficionado. Anne, who is a coffee lover as well, ran into him at a grocery store buying coffee. She recommended a place to him and he asked for her phone number. She declined, offering her email instead.

In more than a dozen emails, which Anne says Callaway began sending in April 2018 from his official Mets email account, he commented on her physical appearance – “I can definitely tell u have been getting after it!!!” – invitations to meet up socially – “Want to have coffee later this week? Or beer if we get beat by Baltimore?” – and multiple requests for late-night rendezvous.

In one email, Anne recalled, Callaway wrote: “Let’s go get drunk, I will tell you what’s going on with the team.”

“He was pressing me to go have drinks with him in exchange for news. He was pressing me to, or at least it felt like it. I felt like, well, this guy is a source; coffee in broad daylight seems a little safer,” Anne said.

She never met with Callaway for coffee because the idea of doing so made her feel uncomfortable, but his advances continued. He told her where he lived and commented on her clothing. Sometimes their interactions seemed normal; other times, he crossed a line. Once, in the tunnel that separates the dugout from the locker room area, she says he walked by her, gave her a once-over and said, “Nice dress.” Another time, he insinuated her body was responding favorably to workouts.

“There were a few times we talked in the tunnel and conversations were fine. I hadn’t returned his emails and it felt fine. It felt like a source-reporter relationship,” she said. “A few other times, he would be like, ‘I thought we were closer and you wouldn’t write that about me.’ That was when it was like, ‘OK, this is not just someone trying to have coffee with me. This isn’t just a source, this is too much.’

“I didn’t know what his intentions were. You start to think, am I overreacting? Or is it more? I had been in this mindfuck for a while when I wasn’t sure if I was in the wrong or he was. But I know now. When he got fired (as Mets manager), it was a lot of relief.”

When Callaway emailed Anne – who at the time was not covering the team on a daily basis – to tell her he broke a rib, she decided it was too weird to not tell someone. She confided in both a friend and fellow reporter and showed that reporter some of the emails she had received and characterized others in conversation. The Athletic spoke to the confidant, whose recollection of the correspondence was that Callaway both sexualized Anne’s appearance and made inappropriate advances.

“It just seemed like there was a quid pro quo there, too. The indication was that if she went to meet him, there would be a reward,” said the reporter Anne confided in.

The first interaction Rachel (not her real name) had with Callaway was in 2016, when he was the pitching coach for the Cleveland Indians. During that season, he made a pass at her at Progressive Field, where Rachel worked in the sports media industry. Callaway commented on her appearance and stared at her in a way that she found inappropriate, Rachel remembers. She brushed it off. It was the type of behavior that she, not unlike many women in the business, has experienced before.

“He was trying to make conversation in a flirty-type of way. It sounds cynical, but it was an eye-roll situation,” she said of their first interaction. “He isn’t the only person who has done this.”

She had limited dealings with Callaway after that, but then, months later, during baseball’s offseason, she says a message from him came across her screen.

“Did you get a new job?” Callaway messaged her on LinkedIn, with a sad face emoji. “Keep in mind,” Rachel said, “I didn’t have any rapport with him at all. I said, ‘No, I’m just updating my profile.’”

Callaway made a comment about how much he liked her profile picture. Then he messaged again: “Got any big plans for new year’s?”

She ignored the message but Callaway continued, trying to make lighter conversation; she tried to diplomatically respond, without writing anything that would prompt him to engage further.

Rachel said she had no further interaction with Callaway and did not tell anyone with the Indians or anyone she worked with, though she still has access to the LinkedIn messages. She can’t remember if he connected with her or vice versa on the platform – or if they were even connected on LinkedIn at all. (Callaway’s profile on LinkedIn is no longer active.) But she remembers being surprised by his message. “I just got a real weird vibe from him,” she said.

Neither Rachel nor any other women reached by The Athletic knew about any formal complaints filed when Callaway was in Cleveland. Two other female reporters who worked in and around Cleveland at the time heard rumors about Callaway’s misbehavior with women were rampant and one of them was warned to stay away from him.

“You did hear rumors about him,” said one of those reporters, who still works in the media. “You heard even more when he did leave Cleveland (for New York), about issues with him and girls that he hit on, some that he worked with and some that he didn’t. Just being inappropriate.”

When Hilary (a pseudonym) first met Callaway in 2015, he was a pitching coach for the Indians and she was a young California-based multimedia correspondent covering baseball. Before one game she was covering, he commented on the boots she was wearing and asked where she was from.

Callaway then asked the correspondent, who was taking photos of players as they emerged from the dugout before the game, if she could email him some of the photos she had taken. She obliged, and shortly thereafter he began to text her. (She believes he obtained her cellphone number via the signature portion of her emails.)

“He was trying to hang out,” she said of the nature of the messages. Still young and trying to gain a foothold in the business, Hilary met Callaway for a beer at a bar near where the Indians were staying in California. She told him up front that she was not interested in sleeping with him. Hilary also asked about Callaway’s marital status; she says he told her he was separated from his wife. Callaway didn’t push the issue, and the two ran into each other the following day at the ballpark. Their interactions were normal and professional, though Callaway continued to text her for approximately a week after they went for drinks. One of those text messages, she said, included a selfie of him shirtless.

At the time that Callaway was pursuing the correspondent, Hilary showed a male friend a stream of text messages from Callaway. The friend corroborated that he had read the text messages, which he remembers as “flirtatious” and, given the power imbalance between the two, inappropriate.

Eventually, Callaway stopped texting Hilary. When asked why she thought he stopped, she said: “I didn’t send him anything back.”

“Happy Valentine’s Day!” read the text Callaway sent to another reporter, Lauren (also not her real name), on Feb. 14, 2020. Lauren hadn’t had any face-to-face interactions with Callaway in five months; she ignored the text. She got another one on April 9; Callaway asked how she was doing and said, “Hope you guys are doing well, thinking about you guys,” referring to Lauren and, she believes, other media members. This time she responded, writing that she was doing well despite the sports shutdown, and asked how Callaway – the new Angels pitching coach – was doing without baseball.

He responded by sending her nine pictures, including one of him outside shirtless on a property he wrote that he had just purchased in Florida. (Lauren shared screenshots of those pictures with The Athletic.) Callaway then sent a video of himself shirtless on a tractor. Unsure of what to say, Lauren did not respond. It wasn’t the first time she had received a shirtless photo from Callaway. He also sent her one in 2019, which she showed to a few people and then brushed off as Callaway just being crass and unaware of how that message would go over.



During one of Lauren’s only one-on-one interviews with Callaway in Florida shortly after he had been named the Mets manager, Callaway put his leg up onto a railing to “peacock her,” thrusting his crotch near her face. She said she remembers being scared – aware that no one else was around and that she needed Callaway’s help to report her story.

“I knew right away this is what I would be dealing with,” Lauren said. “I got warned he was gross (beforehand).”

Lauren received a phone call from Callaway in early 2019, apologizing for the way he had responded to a question she had asked in a press conference. She remembers thinking it was odd that he would call her; she hadn’t felt embarrassed or slighted by his answer. Lauren also can’t remember how Callaway got her phone number, whether she gave it to him or he asked someone in PR.

“I felt like I had to keep up this persona of friendliness and being polite to him because I had to,” she said.

Lauren didn’t hesitate to criticize Callaway’s performance in 2019, though; it was part of her job and she – along with the rest of the baseball world – could see that the Mets skipper was in jeopardy. One particular column she wrote hit a nerve. She was informed by PR that Callaway wanted to speak with her about her column. She made the necessary arrangements and vividly remembers picking an outfit that exposed no skin – despite the summer heat – and pulling back her hair.

“I remember thinking I had to do this because this man is creepy,” she said.

Callaway unloaded on Lauren; Lauren refused to apologize for what she had written. Eventually, he yelled at a PR staffer present to get Lauren out of his office.

Later, Lauren learned through a mutual friend in the media that one of the shirtless photos that Callaway had sent her had been sent to another woman as well. (The Athletic confirmed with the other woman that she received it.)

Said Lauren: “He just preyed on women.”

When Callaway was hired in Anaheim, Anne thought about reaching out to female reporters in that market, but she opted against it because she didn’t know any women there that well. Still, word reached the West Coast quickly, with multiple L.A.-based women confirming to The Athletic that they had been warned about Callaway’s past actions.

Following Porter’s termination, Alderson, the Mets president, answered questions in a video press conference about how rigorously the Mets had vetted Porter before hiring him. Alderson said Porter received high marks among those the club queried. When asked by a female reporter whether any women had been consulted, Alderson said the Mets had not.

Samantha, one of the New York-based reporters who detailed her experience with Callaway, wondered how multiple teams could have not known about Callaway’s reputation, given the stories circulating among women in the industry.

“How would that be possible? At this point, it’s his reputation,” she said. “If they are vetting him, even an ounce of his personal life should reveal this.”

What would we do without social media?