Why Mets fans should and shouldn't care about exceeding luxury tax to sign Trevor Bauer

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Danny Abriano
·4 min read
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Trevor Bauer, Steve Cohen, and Michael Conforto TREATED ART
Trevor Bauer, Steve Cohen, and Michael Conforto TREATED ART

As the Mets have been considering signing Trevor Bauer to a deal that would pay him upwards of $30 million per season for multiple seasons, that pursuit has been inextricably tied to what it could mean for the luxury tax.

As the narrative surrounding Bauer and the $210 million luxury tax has played out on Twitter and elsewhere, it seems that things are being taken out of context a bit.

When the luxury tax is brought up (at least by this writer, but this is certainly the case for many others) as it pertains to the Mets and Bauer, it is not out of concern for the Mets exceeding the tax. And it is not mentioned because of a thought that the Mets should not exceed it now or in the future.

Rather, it's brought up to add context to the situation and address the unknowns.

Specifically, how far over the threshold are the Mets willing to go? For how many consecutive seasons are they willing to exceed it? And what might the impact of exceeding it be?

With the Mets' payroll around $183 million at the moment, should fans care about the team possibly exceeding the tax to sig Bauer and/or make other moves? Yes and no.

Let's break it down...

WHY FANS SHOULDN'T CARE

It's not their money.

There are "integrity of competition" discussions to have when it comes to a team that not only blows past the tax but goes so far past it that other teams are left in the dust. That has happened recently with the Los Angeles Dodgers, whose payroll was $297.9 million in 2015.

But if the name of the game is to put the best possible team on the field, most fans won't (and shouldn't) care about exceeding the tax, no matter how much a team spends beyond it.

In a world where money is no object and where penalties for exceeding the tax remain relative slaps on the wrist, an owner like Steve Cohen could perhaps throw caution to the wind and spend like mad.

What are those penalties? Per the current CBA:

A club exceeding the threshold for the first time pays a 20 percent tax on all overages. A club exceeding the threshold for a second consecutive season pays a 30 percent tax, while three or more straight seasons of exceeding the threshold means a 50 percent tax. If a team that has exceeded the tax goes back below the threshold for a season, the penalty level is reset.

Teams that exceed the threshold by $20 million to $40 million are also subject to a 12 percent surtax, while teams that exceed it by more than $40 million are taxed at a 42.5 percent rate for the first time and a 45 percent rate if they exceed it by more than $40 million again in the following year(s).

For teams that are $40 million or more above the threshold, their pick in the MLB Draft (unless it's in the top six) is moved back 10 places. Teams that have a top six pick have their second-highest pick moved back 10 places.

It is not clear just how far past the threshold Cohen is willing to go, and it is unknown what the luxury tax amount and penalties will look like in the new CBA that will need to be agreed to before the 2022 season.

WHY FANS SHOULD CARE

As noted above, it is not known just how far past the threshold Cohen is willing to go (though he is on record as being comfortable exceeding it), nor is it known how many consecutive years he would be willing to exceed it.

That should matter to fans not because of the money Cohen would have to pay in penalties, but because the comfort level Cohen has above the tax level could have a major impact on the Mets' ability or willingness to extend their own players or add external players.

As it pertains to the present situation, would signing Bauer preclude the Mets from extending Michael Conforto or Francisco Lindor?

And would it prevent them from adding a starting center fielder and other reinforcements this offseason?

Looking beyond the 2021 season in a world where the Mets have signed Bauer and handed out another massive extension to at least one other player, what would their willingness be when it came to trading for or signing another big ticket player?

It should also be noted that Robinson Cano's $20 million yearly salary will be back on the books in 2022 and 2023, meaning a scenario where the Mets would likely need to exceed the luxury tax for three consecutive years if they sign Bauer and also extend Conforto and/or Lindor.

If Cohen is comfortable with that, fans should be as well. But what happens if he isn't?

This is a layered, convoluted topic, but it's one that needs to be discussed -- at least until we get clarity on just how far the Mets are willing to go.