News and Rumors

A Draft Luxury Tax?

A Draft Luxury Tax?

Earlier this week we heard that draft bonuses were the last major issue to be resolved in the Collective Bargaining Agreement, with Bud Selig pushing for hard slotting.  Since then we've heard that hard slotting is pretty much dead, although Buster Olney reports that the changes that are now being discussed involve a luxury tax on total draft spending.

MLB has a luxury tax on total payroll, which only really affects three teams.  The payroll figure goes up every year, and the Yankees pay almost all of the luxury tax.  Unlike revenue sharing money, the tax money goes to MLB's central fund, rather than being distributed to other teams.  The Yankees, and other teams, haven't been restricted from spending big due to the luxury tax.  They've just had to pay a bit extra to spend over the limit.

It would be a bit harder to add a luxury tax for the draft.  A team with the first overall pick is obviously going to need a higher ceiling than a team with the 30th overall pick.  The first ove...

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Tim is the owner and editor in chief of Pirates Prospects. He started the site in January 2009, and turned it into his full time job during the 2011 season. Prior to starting Pirates Prospects, Tim worked with AccuScore.com, providing MLB, NHL, and NFL coverage to various national media outlets, including ESPN Insider, USA Today, Yahoo Sports, and the Wall Street Journal. He also writes the annual Prospect Guide, which is sold through the site. Tim lives in Bradenton, where he provides live coverage all year of Spring Training, mini camp, instructs, the Bradenton Marauders, and the GCL Pirates.

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