To Topherstarr Re: Phillies Payroll

My apologies for the lack of paragraph breaks. I swear they were there when I typed the post. When I hit enter, they disappeared (and I don’t see where I can go back and edit them in). Either I need to learn to use an extra line break on this forum, or the browser I was using at the time didn’t read them properly. We’ll find out in 2 seconds.

As for #1, I’m not sure I totally understand the concept either, except there are some factors that might explain the equal splitting of 1/30th of all MLB benefits lumped together. For example, items included in those benefits include travel and accommodations at the AS game, which is somewhat beyond an individual team’s control. Good teams would tend to be hurt against the tax simply because they sent extra players to the game.

Looking at the logic from the flip side, if it truly means the Phillies are taxed on 1/30th of what only they paid in, can you explain why the denominator would change if the number of MLB teams change? Even in a vacuum, what sense does it make they’d pay 1/30th of what they paid in? Seems like an entirely random number.

OK, took a few tries but the paragraphs are there now. Thanks for the admonition inspiring me to go back and fix it.

Here’s the actual wording from the 2007-2011 CBA that just expired, to help decipher the proper interpretation of the benefits. This is from XXIII, C, 1, which is “Definition of Actual Club Payroll”

(a) a 1/30th share of Player Benefit Costs (and a similar pro rata share if the number of Major League Clubs changes), as determined in section D below;

The word “share” and the part in parentheses is obviously what makes me lean toward 1/30th of what all clubs together have paid in.

Section D below then states this:

D. Benefits or Player Benefit Costs
(1) Definition: The Clubs’ Benefits or Player Benefit Costs for a particular contract year shall include the sums paid (or to be paid on a proper accrual basis for that Contract Year) by or on behalf of the Clubs for, to, or on behalf of present Players (and former Players when expressly noted) for:

The main thing I glean right from the start is the positioning of the apostrophe in the word “clubs.” If it were to come before the s, that would be a singular club, or the singular possessive. Since it’s actually after the s, that makes it the plural possessive, or inclusive of all MLB clubs. Also, the capitalized word Clubs later in the paragraph seems to suggest it’s talking about all 30 clubs together.

So in part (a) it says 1/30th of Player Benefit Costs, which it later defines in section D as the sums paid by the Clubs (plural) to Players.

Well, it’s section E, 5, b, (1) in the 2007-2011 CBA (don’t know that the new CBA has been released to the public yet). Here’s the phrasing…

“General Rule: if a Uniform Player’s Contract contains a club option year or a player option year… and the player is to receive consideration upon the non-exercise of that option…then such option buyout shall be deemed a signing bonus.

I skipped some fluff parts, but the long and short is that an option buyout is to be treated as a bonus, which is spread across the term of the deal. It then goes on to clarify that if the option is exercised, the team subtracts this buyout portion that has already been counted against the team in prior years, or they can get a cash payment if they have paid a fee for going over the luxury cap.

So for Howard, if his $23M option is picked up for 2017 (fat chance), he would only count $13M against the cap that year because $10M has already been counted between 2011 and 2016.