The current collective bargaining agreement expired back on December 1st, grinding Major League Baseball to a halt. During this work stoppage, teams are not allowed to make any moves until the Major League Baseball and the MLB Player Association come to an agreement on a restructured CBA. How does this affect the Chicago White Sox?
One of the talking points of the new CBA will be what the luxury tax will be. Back in August the MLB proposed a lower threshold for taxes on teams spending. Any spending above $180 million is subject to a 25% tax. The tax rate would increase as teams spent more, with four proposed tax brackets. In return, teams would be required to spend at least $100 million on their team salary.
The previous CBA contained three tiers of luxury tax penalties. The first tier is a 20% tax on all spending above the $210 million mark up until the $230 million mark. Anything above that is taxed 32% unless you spend more than $250 million in which case you have to pay a 62.5% tax. If teams pay the tax in consecutive seasons there are heightened penalties.
The luxury tax is a roadblock for teams trying to spend money. The Dodgers have been one of the few teams who have no problem paying the piper when it comes to luxury tax penalties. The stereotype surrounding Jerry Reinsdorf is that he does not like to spend money.
This is not necessarily true. While they have missed out on some big names such as Manny Machado, Bryce Harper, or Marcus Semien in the past, the White Sox have shown they are willing to spend.
They spent $73 million on Yasmani Grandal and $50 million on Jose Abreu. The White Sox haven’t handed out any massive 10-year mega deals yet but those rarely work out, especially in the back end of the contract. Just look at Albert Pujols with the Los Angeles Angels for reference.
The Chicago White Sox needs to add some players before the 2022 season.
Last season, the New York Yankees, Boston Red Sox, and Houston Astros were all in similar situations as the White Sox. Yet they all decided to hover around the $210 million mark to avoid paying any taxes. Essentially the luxury tax is baseball’s version of a salary cap.
In all likelihood, the luxury tax will not get any lower in the new CBA. The MLBPA will probably have to settle for a salary floor. The White Sox has a current total salary of just over $169 million. They only have $10 million left to spend if they want to avoid the $25% proposed luxury tax penalty. The White Sox current 40-man roster stands at 37.
The White Sox are in a situation where they should bite the bullet and pay what they have to to win a World Series. If a high-profile free agent is what pushes them over the top and it means sacrificing a lot of money so be it.
However, if the penalty happens to increase and the White Sox wants to play it cheap, then Rick Hahn is going to have to be very careful how he puts together his roster. Here are three players the White Sox should sign if the luxury tax increases: