The MLBPA very aggressively and openly, and for very obvious reasons, has no use for competitive balance limits at the high end. It sees them as an unnatural restraint on spending that would work to the detriment of the game’s stars…which it would.
This is not to defend the owners’ stance, which for most of these discussions has proposed small or no increases on the Competitive Balance Tax. Atop the existing threshold, the notion of a $220 million threshold to impose a luxury tax — with no increases over the life of the agreement — was, in a word, chintzy, and the union rightly saw it that way.
Bu the Union’s alternative was to argue for a sharply higher Competitive Balance Tax with elimination or steep reductions in penalties. Adopting the Union’s position would afford a select handful of teams the option to accelerate the rate at which they are out-spending the majority of teams with few or no financial impediments to doing so.
It is an open question the extent to which extreme spending on players actually influences performance on the field. In 2021, the correlation between a team’s payroll and its record was 40 percent. But on a season-to-season basis, that correlation has varied wildly in recent years, from an inconsequential 3 percent in 2018 all the way to a stifling 62 percent in 2016 and 2017.
So the correlation data will allow either side to make whatever it wants of the relevance of spending limits to competitive balance.
The problem with the Union’s argument is that it has a two-faced Janus element to it. It seeks at the same time to accelerate low-end salaries in the name of improving competitive balance while simultaneously opposing high-end restraints that are designed to do the same thing.