Fausto Carmona agreed to participate in a work program in exchange for false identity charges being dropped in the Dominican Republic, but the story is hardly over.
Carmona has yet to receive clearance for a visa and Jon Heyman of CBSSports.com reports that the man now known as Roberto Hernandez Heredia has agreed to have his contract restructured by the Indians.
No word yet on the specifics because the Indians are so far declining to comment, but Carmona/Heredia was set to earn $7 million this season and his contract also includes a $9 million option for 2013 and a $14 million option for 2014.
According to Heyman the restructuring involves eliminating one of those options, which presumably must be 2014. And regardless of whatever his restructured salary is, Carmona/Heredia won’t make any money until he returns to the United States and is removed from the restricted list.
Jorge Castillo of the Los Angeles Times reports that the Cubs, Red Sox, and Yankees exceeded the competitive balance tax (more colloquially known as the luxury tax) threshold for the 2019 season, set at $206 million. It will rise to $208 million for the 2020 season and $210 million in 2021.
Teams that exceed the CBT threshold pay a penalty on the overage, which is compounded depending on how consistently they have exceeded the threshold. The base penalty is 20 percent. If a team has exceeded it in a second consecutive year, the penalty rises to 30 percent. Three or more consecutive seasons yields a 50 percent tax on the overage. Furthermore, teams that exceed the CBT threshold by $20-40 million see an additional 12 percent tax. Above $40 million brings a 42.5 percent penalty which rises to 45 percent if the team exceeds the CBT by more than $40 million in a consecutive year.
The luxury tax has acted as a de facto salary cap. Front offices typically have gone out of their way not to exceed it, especially in recent years. The Cubs, Red Sox, and Yankees are each widely believed to be looking to stay below $208 million in 2020.
In pursuit of payroll efficiency, the Cubs are believed to be willing to listen to offers for catcher Willson Contreras, third baseman Kris Bryant, outfielders Kyle Scharber, Albert Almora, and Ian Happ, as well as pitcher José Quintana. The Red Sox are believed to be pursuing trades of outfielder Mookie Betts and/or J.D. Martinez. Outfielder Jackie Bradley Jr. is also believed to be available.
As we have been discussing the ongoing labor tension in baseball lately, one wonders if the CBT threshold might also be changed within the next collective bargaining agreement. It has served ownership well, giving them something to point at as a reason not to invest as much into putting together a competitive and entertaining product for fans.