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Cubs, Red Sox, Yankees exceeded competitive balance tax threshold in 2019

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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.

Joe Kelly’s suspension reduced to 5 games on appeal

Joe Kelly suspended eight
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LOS ANGELES — Los Angeles Dodgers reliever Joe Kelly had his suspension for throwing pitches near the heads of Houston hitters reduced to five games on appeal.

Kelly was originally penalized eight games by Major League Baseball on July 29, a day after throwing a 96 mph fastball near the head of Houston’s Alex Bregman and two curveballs that brushed back Carlos Correa.

The Dodgers on Wednesday confirmed the reduced penalty.

Kelly went on the 10-day injured list retroactive to last Sunday with right shoulder inflammation. He will serve his suspension when he returns.

After striking out Corea, Kelly curled his lip into a pouting expression and exchanged words with the shortstop.

Benches cleared after Kelly’s actions during the sixth inning of Los Angeles’ 5-2 win at Houston in the teams’ first meeting since it was revealed the Astros stole signs en route to a 2017 World Series title over the Dodgers.

Dodgers manager Dave Roberts served his one-game suspension the same day the penalty was handed down. Astros manager Dusty Baker was fined an undisclosed amount.

Kelly denied that he purposely threw at the Astros. He has previously been suspended in his career for throwing at a batter.

The penalties were imposed by former pitcher Chris Young, MLB’s senior vice president of baseball operations, who issued his first ruling since taking over the job from Joe Torre.