The Los Angeles Dodgers are on track to pay at least 160 million dollars of MLB competitive balance tax in 2026. In all, ten teams will be charged close to 500 million dollars in 2026. And it’s only January 31st. There are some big free agents still available. We’ve been over the salary cap and floor and overspending and the poor teams at the bottom. But we haven’t discussed one aspect, however. Where does all that money go?
Three and a half million dollars go to player benefits. After that, half of
that money goes into baseball players IRAs. The other half goes to teams that didn’t violate the tax threshold. But where does that money go, exactly?
It is placed into a non-public discretionary fund. It’s a slush fund for lousy teams. Reportedly, some of last year’s tax went to reimburse teams that were affected by the RSN bankruptcy and non-payment of television rights fees. But outside of that, it’s a closed book. But one thing is for certain, it’s going to teams that aren’t funding their payrolls as well as the Dodgers, Mets, and to a smaller extent, the Braves.
So why are the Dodgers and other big spenders paying for bad baseball? And that’s exactly what is happening. And when you subsidize something, you are going to get more of it. Why are they keeping the Marlins and Pirates and Rockies afloat? It looks like corporate welfare. Is that what we’re doing here? Is there something else we could do here like remove/replace the soft salary cap? Or keep it and:
- Build a children’s hospital
- Fund high school baseball in poorer areas
- Fund free summer ticket packages for high school scholars
- Fund new stadiums and refuse public funds
I’m sorry if I don’t shed tears for the owners. But there’s many worthy causes that could be helped with that money. Major sports franchises cost money. If they can’t fund if correctly, sell it to someone who can and let their fans benefit. The NFL’s Seattle Seahawks are going up for sale. It might sell for seven to eight billion dollars. So why wouldn’t someone want to buy the smaller MLB teams if the current owners don’t want to compete?
