Payroll Floor? I Didn't Know We Had One

Taking a little time out from my all Rule 5, all the time recent postings to talk about something that is, at the same time, one of my most favorite and least favorite subjects: mandated minimum total player payroll amount, otherwise known as a salary (or payroll) floor

Interesting report from BaseballTradeRumors today:

Athletics Risk MLBPA Grievance Without Further Payroll Increases - MLB Trade Rumors

Turns out, if you receive revenue sharing, you DO have a salary floor.  

For Oakland, since they will receive a full revenue share for the first time in 2025 ($70 million) they have to have a 2025 payroll of at least $105 million as their payroll have to be at least $150% of the amount of revenue sharing they receive.

Thus the unexpected signing of Severino and maybe some more FA signings in the future may be making more sense for a nomadic team with no intention of making a playoff run in 2025.

Not knowing how much revenue sharing the Guardians get it is possible that they may have a salary floor of $105 million, as well.  But their projected 2025 payroll now stands at an interesting $97 million level (after the Gimenez trade), which would be just over that $105 million threshold if, indeed, they receive a $70 million revenue share.

Payroll Floor

I have posted previously how much I hate this concept.  Oakland is the perfect example, signing quality free agents and paying them a lot of money just to meet the minimum team payroll required by the latest CBA.  They could extend players to up that payroll but I am pretty sure that players like Brent Rooker will see that coming and would ask for more money than Oakland would want to pay. 

Bottom line: the payroll floor, if it is applied the way the MLBPA wants it to be applied, makes teams that have no chance of being competitive spend their money on players just to pay those players more than they would likely get in a completely open market.

Instead of this I propose the following:

• create a payroll floor like has been proposed
• calculate the international signing pool amounts and draft budget amounts the way they are normally calculated
• If a team chooses to go under their payroll floor they must add 25% of that underage to their international signing pool, 25% to their draft budget, with the rest of the underage being split between other revenue sharing teams to be split evenly between their international and draft pools

So, instead of overpaying major leaguers teams that will not be competitive, simply spend where they should: on obtaining talent they can develop to be competitive in the future and be forced to give some of your revenue sharing dollars to other teams in your same situation.

Is this unfair to the larger market teams with good revenue streams?  Absolutely.  But at least we know teams are going in the right direction in terms of developing.  The additional dollars in draft pools offset the effect of NIL money, at least somewhat, and it gives the weaker teams more money to sign international free agents who are posted by their foreign teams at a young age.