While most owners were willing to boost the luxury tax to $220 million, at least four were not — the owners of the Angels, Tigers, Diamondbacks and Reds.
As it turns out, Steve Cohen was at the center of that drama, whether he intended to be or not. Cohen is baseball’s richest owner, so he doesn’t seem to care if the luxury tax — MLB’s version of keeping competitive balance through payroll means — is increased.
Small-market and mid-market owners, however, do care. Bob Castellini of the Reds, Chris Ilitch of the Tigers, Ken Kendrick of the Diamondbacks and Arte Moreno of the Angels objected to raising the tax, in part because it would require them to spend more. This is all despite the fact that the luxury tax’s growth rate hasn’t kept up with the overall revenue increase in MLB.
Steve Cohen at center of luxury tax disagreement
While Cohen didn’t necessarily make his viewpoint on this known, it’s unlikely he would have an issue with spending more than the tax — he’s already been quoted as willing to ignore it on multiple occasions. But the addition of more owners like Cohen, who don’t take much warning to the lax, intimidates small-market teams.
Through no fault of his own, Cohen was mentioned in negotiations by MLB owners, per Evan Drellich of The Athletic.
“In bargaining, owners have used the Mets, and their relatively new owner Steve Cohen, and the Dodgers as examples of teams they’re worried about outspending the competition, sources said. On Tuesday, a day after MLB went to $220 million, the league made an updated proposal to the players in other areas — a final offer prior to the cancellation of games — but that package did not include any additional money in the CBT thresholds.”
The more baseball increases the luxury tax, the more small-market owners believe they’ll be outspent. The simple solutions to these are to either spend more money or sell the teams they own, but said hundred-millionaires and billionaires don’t seem too interested in that approach.