One of the most impactful changes that most likely will be coming as part of any new CBA after the current one expires at the end of the year is not going to be salary caps or salary floors.  But instead, deferred salaries. There will not only be push from inside the game, but also from outside the game.  It’s about to get political!!

 

The Dodgers will single handedly drive change. Sure the Dodgers have the financial capabilities to outbid nearly every other team for nearly any player they want. That is a sizeable imbalance in and of itself.  But starting the trend of deferred salaries on top of that??? That just makes it straight up unfair.  Yes any team CAN do the same, but clearly not to the extent the Dodgers can/are. Yes the Dodgers are still subject to luxury tax penalties, as the average player salary is counted toward the comp balance threshold,  but if you are not paying the salaries out of pocket then of course they can afford ANY luxury tax penalty. It only makes the top players MORE affordable.

Cities and states will be putting pressure on the league to tighten up contracts as well. The prime driver of this is Ohtani’s deferred contract. California is pissed. They are in position to lose out on potentially MILLIONS fo dollars of taxes from Ohtani’s deal.  Shohei has $68M per year deferred until starting in 2034, Beginnign in 2034 he gets $68M per year for 10 years, that is $680M in deferred income. if/when Ohtani is done playing by 2034, he can simply move out of state and not have to pay California’s income tax at roughly 13.3% that is  a loss of tax revenue of over $70M dollars!! All while playing in a publicly funded stadium.

It is easy to see why such deferred salaries (as fun as Bobby Bonilla day is), will be coming to an end.

The simplest proposal, and one that I have been championing for years is to include or allow “Fluid Contracts”.  A Fluid Contract would allow the owners to spread out a players salary however they see fit, but 100% of the salary must be paid by the end of the contract.  This gives teams better control/flexibility over their financials from year to year, would benefit player salaries, and help spread out top talent. You just determine a number of fluid salaries a team can have active at any time.

EXAMPLE:

Player A signs a 10 year $200M (round numbers for simple math) and AAV of $20M. Instead of being “locked in” to set amounts each year, The team pays whatever they want each year, frontloading, backloading, or balancing the contract as they go.  At the start of the year there is a minimum amount a player must be paid annually. Again for simple math, let’s say that is $1M, the team submits initial payroll to MLB by opening day.  then the team submits a FINAL salary for those players sometime later in the season, let’s say after the trade deadline.  This gives team flexibility to better manage their payrolls from year to year and deal with unexpected costs, or unanticipated windfalls. This would also allow teams to manage luxury tax penalties. This would allow teams to get under the penalty for a year to reset and still retain their players.

This is a win for players, because by giving such unique flexibility to owners, the players could command/demand higher salaries. 

In order to help ensure EVERY team benefits from these contracts, and big market teams do not just use this as a way to lock in even MORE talent, You put a limit on the number of fluid contracts each team can have. say 3-5 per team. This way a player (presumably a top player who would be “worthy”  of a fluid contract, that may come with a higher AAV) may be more incentivized to sign with a team other than the big market teams, as well as giving smaller market teams to make more competitive offers.  This would help spread talent out across the league.

Could get even more creative, and include potential draft picks in trades, If a team wants to trade for a player on a fluid contract, but they are at their limit, they could either trade one away, OR, they could trade away  a first round draft pick to acquire an additional Fluid Contract.  By and large it would be smaller market teams trading fluid players to bigger market teams, so this would help them rebuild faster.   Players may see this as a bit of a restriction, but this could easily be offset by getting rid of the Qualifying Offer where teams have to give up draft picks to sign one. Being tagged with QA draft pick compensation has shown to DRASTICALLY reduce the earning potential of all but the very best QA FA.  and allowing 1st round trades to acquire additional fluid contracts would act in the same way to protect small market teams.

 

I believe simply reshaping contracts like this would have a great positive impact on the game, and even hopefully prevent a lock out/strike.

 

This would benefit players, because with 

 

 

 

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