The Atlanta Braves are perilously close to the third luxury tax tier and its financial and draft pick penalties
The Atlanta Braves don’t have much money available to spend.
Let me clarify: They have money. Atlanta’s income surpassed $600 million for the first time last year, though baseball expenses rose as well.
Will they spend it?
Will Alex Anthopoulos sign a seasoned outfielder over the third luxury tax tier if Ronald Acuña Jr’s “irritated meniscus” prevents him from playing regular season games?
Atlanta’s CBT total is substantially higher – $42 million, in fact, at just over $270 million – and this is because CBT payroll is computed differently than cash payroll. Cash payroll is simply the cash you’re paying your players this season. CBT payroll is calculated using the average annual value, or AAV, of your deals. And, because many of the Braves’ roster members have impending seasons with contracts above the $22 million mark, their CBT figures are greater than their cash projections for 2024.
Now, Alex Anthopoulos has told us, at the Winter Meetings and elsewhere, that he is concerned about the cash amount. They track the tax payroll because they have to pay it, but they are more concerned with the cash payroll and actual expenditures during that season.
However, there is a complex aspect here: reaching the third CBT level of $277 million not only increases your financial penalty, but it also brings others with it.
First, the financials: As a second-time payer (Atlanta paid $3.2 million as a first-time payer last season), Atlanta’s penalties would rise from a 20% to a 30% tax on all overages. Furthermore, because they have passed the second tier ($257 million), there is an additional 12% fee on spending above $257 million.
But if Atlanta reaches the third tier of $277 million, the additional tax rises from 12% to 42.5% (on top of the previous 30%).
If you surpass the third CBT level, you will face MLB draft-related penalties in addition to the financial penalties.
Exceeding that third criterion results in the highest MLB round selection in the next applicable round (so 2025 for any overages this season) being pushed back 10 spots.
For an organization that invests heavily in pitching prospects in the draft because they are one of the best at developing pitching, a ten-spot drop when you’re already picking late in the draft means a loss of millions of dollars in potential bonus pool space and a future MLB starting pitcher.
According to FanGraphs, Atlanta’s current CBT figure is $270,363,334, leaving less than $7 million in space for potential trade deadline additions to the current team.
Of course, there is a way around this: the Braves could lower the current CBT figure by adding a prospect to David Fletcher’s deal ($7 million AAV in 2024, $14 million total owed) to free up some room, but that appears to be something the management would rather not do.
So, it’s becoming increasingly doubtful that Atlanta would sign a free-agent outfielder on the open market unless that player is willing to pay close to the veteran minimum…and if that’s the case, are they considerably better than the organization’s existing options?
The Braves may make a trade, but everything depends on the state of Acuña’s right knee, which will be reported later today.
Unless Acuña is absent for an extended period, the team could rely on Jordan Luplow, Forrest Wall, or JP Martinez to cover for him.
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