As they look to ramp up payroll ahead of their impending move to Las Vegas, the Athletics inked right-hander Luis Severino to the largest deal in franchise history last week as they look to capture the attention of a new city during their temporary move to West Sacramento. With that being said, a report from Evan Drellich and Ken Rosenthal of The Athletic on Monday emphasized that getting fans into seats in 2025 isn’t the only motivation behind the club’s decision to increase spending. The duo reports that without a substantial increase to the club’s payroll this winter, the A’s run the risk of inviting a grievance from the MLB Players Association.
That risk of a grievance is due to the fact that A’s will collect 100% of their revenue-sharing dollars in 2025 for the first time under the current collective bargaining agreement. While the team received just 25% of their allotment in 2022, that figured increased to 50% in 2023 and 75% in 2024 before finally reaching 100% in 2025. The issue for the A’s stems from the fact that the CBA requires revenue sharing recipients to spend more than 150% of their revenue sharing money on MLB payroll.
Drellich and Rosenthal go on to report that A’s could receive $70MM or more in revenue sharing after drawing the worst attendance figures in baseball last year, which would mean the club needs to reach a player payroll of $105MM or more for luxury tax purposes in 2025 in order to avoid risking a grievance. RosterResource currently projects the club for a luxury tax payroll of just under $78.5MM for 2025, meaning they would need to add roughly $26.5MM in player payroll to avoid falling below that 150% figure. It’s worth noting that these numbers are inexact, as well, and if the A’s receive a larger revenue sharing check than currently expected they may wind up needing to float a luxury tax payroll of more than $105MM in order to avoid a grievance.
For a club that has struggled to lure in free agents this winter due to the fact that they’ll spend the next three seasons using a Triple-A stadium as their home ballpark, reaching that level of spending could be complicated. A separate report from Rosenthal suggests that the A’s have interest in adding another free agent starting pitcher alongside Severino, though he adds that such a signing would likely be a veteran pitcher from a lower tier of free agency. Rosenthal specifically name-checks Kyle Gibson, Lance Lynn, and Andrew Heaney as potential options the A’s could consider if any of them were willing to pitch in West Sacramento next season.
Of the three, Heaney was predicted to land the largest contract on MLBTR’s annual Top 50 MLB Free Agents list with a two-year, $24MM pact. That $12MM AAV would bump the club’s luxury tax payroll up to $90.5MM, putting them just $15MM away from reaching their estimated $105MM target. The tough sell of pitching in West Sacramento and the projection-beating deals signed by other pitchers this winter could leave the A’s in a position where they’d need to offer more than that $12MM annual figure in order to land a veteran hurler, but they’d surely still need to find other ways to add salary in order to reach $105MM even if they signed a veteran starter to a deal that significantly outpaced projections.
Free agency isn’t the only avenue for adding talent (and payroll), of course. The trade market is one avenue for adding MLB talent that the club has been candid about exploring this winter. Cubs outfielder Cody Bellinger and Diamondbacks southpaw Jordan Montgomery are two high-priced players known to be available in the rumor mill who the club could swing deals for if they want to immediately put themselves in position to avoid a grievance in one fell swoop, but there’s a large swath of other players expected to be available this winter who could add to the club’s payroll in a less drastic fashion. Rays first baseman Yandy Diaz, Cubs second baseman Nico Hoerner, and Cardinals southpaw Steven Matz are among a handful of possible trade candidates who will make $10MM or more in 2025.
Another route the A’s could take to raise the luxury tax payroll that wouldn’t require convincing a free agent to sign or swinging a trade with another club would be signing a player already in the organization to an extension. Reporting over the weekend indicated that the Athletics have interest in negotiating an extension with breakout slugger Brent Rooker. MLBTR contributor Matt Swartz projects Rooker to earn $5.1MM in his first trip through arbitration this winter, and any extension that would guarantee Rooker an AAV higher than that $5.1MM figure would increase the club’s luxury tax payroll. As MLBTR’s Mark Polishuk noted over the weekend, it’s possible that even if the A’s and Rooker aren’t interested in agreeing on a long-term deal that buys out some of Rooker’s free agent years, an extension that covers his arbitration years could offer certainty to both sides. Such an extension would come with an additional boon for the A’s in light of their current predicament by surely raising the AAV on Rooker’s 2025 contract, though no realistic extension could be expected to raise the club’s tax payroll by the $26.5MM needed to avoid risking a grievance by itself.
Gee, Like nobody knew Fisher puts that money into his own pockets? He’s been doing it for years. To quote a movie phrase” Welcome to the party pal” Fire up some more for the Pirates, Reds, Marlins.
You can always tell who the large market apologists are.
Own your massive advantage from your local TV money.
Everything Ricketts has done he’s done with all his own money. Not 1 penny from the state or the city. Name another owner in Sports who can say that? Your owners are stealing money on a false pretense.
Especially when you consider the Reds biggest signing so far was a guy who accepted a QO.. I don’t think that really counts.
Well. Not everything
In 2009, the Ricketts family raised $250 million in private placements to help pay off a $425 million bank loan that was due to mature in October 2013.
In May 2021, the Ricketts family borrowed over $65 million from Wintrust Bank for rooftops.
But the point is they still have to repay that if they’re loans. So your point is meaningless.
Taking other people’s money through private placements isn’t paying it back yourself. Nice try.
It’s making the citizens pay off a teams loan with extra steps.
Taking out a loan and paying it back with money generated through sales to fans and/or money generated through tv deals reliant on fans watching also isn’t paying it back yourself through your own finances separate of the teams.
Bank loans and private placements are not “public” money. What in the world are you talking about?
That’s the right question to ask him. WTF does he mean exactly? LOL If they’re loans it’s actually going to cost him MORE money right?
“ Everything Ricketts has done he’s done with all his own money.” – false
Private placements are literally selling stocks or other features to people of the public they select.
private placement means any offer or invitation to subscribe or issue of securities to a selected group of persons by a company
Still not ricketts money.
“ Everything Ricketts has done he’s done with all his own money.”
private placement means any offer or invitation to subscribe or issue of securities to a selected group of persons by a company
Still not ricketts money. Dude sold people essentially stock to repay his loan. Didn’t use his money he used other people’s money.
No matter how you twist it you were wrong considering not everything he’s done has been with his “his own money” he’s used other people’s money too.
You are either 12 years old or a complete (redacted).
And saying it twice means half of your point Curly.LMAO
So getting people to pay off your loan by selling them stock is you paying for it yourself huh? You’re special and not in a good way like special k cereal.
“I don’t like facts”
We know Mike. Still not his money.
Look the important thing for you to do, Besides getting an education, Would be to find yourself in the hole you’re already in and just keep diggin. Go for it.
“I don’t know how private placements work”
We know Mike. We know there’s a lot you don’t understand.
Oh and still not his money.
ok whenever those private placements are sold back to ricketts he’s going to need to use his own money to get that back moron
“I don’t know how private placements work”
0/2. Private placements are essentially stock bonds or something similar in nature. Rickett didn’t buy them back cause those are long term hold for the buyer or institution. The investors don’t just buy them to resell them and net a small gain. No they’ll hold onto that asset for years till it’s 3-4 even 10x the investment. However much they paid in 09 they’ve certainly seen their private placement mature at least triple in value in the last 15 years considering what rickett paid in 09 vs what the cubs are worth now in 24.
Lol the A’s have one of the most lucrative TV deals in baseball
But Steve Cohen is the problem for spending to win, right? Fisher and Castellini living off the test of revenue sharing are victims, right?
MLB needs no salary cap, they need an aggressive salary floor.
Isn’t the salary floor equal to 150% of revenue sharing funds?
Bcjd – Exactly!
I don’t recall a minimum spend requirement being mentioned here before, or did I just miss it? Either way it’s good to know it actually exists.
It hasn’t come up much because it’s a rare event that an owner puts such a lousy team on the field. We’re going to have this band of gypsies on a minor league field playing against future hall-of-famers. It all could have been easily avoided, Smart owners don’t devalue their investment to the point where the rest of the league has to chip in for support.
They need BOTH. Even with a floor and revenue sharing funds, most teams can’t spend like the Dodgers. Deferred payments should also be fixed so the luxury tax threshold can’t be manipulated.
Rays – Deferrals do not impact the luxury tax.
@Fever
Yes that’s my point. They need to make deferrals affect the salary cap. Not many teams will do what the Dodgers did, but whether it’s future money or current money, it should still count as an overall total against the luxury tax numbers
Rays – The Dodgers received a 2-year benefit for cash flow only. If the CBA required what you proposed, Ohtani would have been offered the exact same amount the Dodgers will be putting in escrow. So how does that help other teams?
If the Angels or Giants aren’t willing to put $44M into escrow every year, why do you think they’d be willing to pay Ohtani $46M every year?
Besides, the union would never support a CBA hit based on future value.
I had this same misconception regarding deferred money.
They have two separate ledgers in regards to the contract when deferred money is involved. The payroll number and the cash number.
The payroll number is the one that applies to the teams present and future season’s salary cap figures and will amortize the full value of the contract over the term of the contract, either equallaterally or as specified by a schedule defined in the terms of the contract.
Right.
Ohtani agrees to 10 year 700 mill (aav should be 70 mill against the luxury tax)
Defers 680 mill and dodgers are only hit with 46 mill against luxury tax
But yeah deferring money definitely doesn’t affect luxury taxes. Not at all, even though it lowers the aav of the intended contract which is why dodgers get to pay 46 mill not 70.
That is how I originally had believed it to be as well, but the 70M AAV is the payroll number, the 2M annual is the cash number.
The full 70M is on the Dodgers 2025 payroll figure and applies to the cap.
Spottrac separates the two ledgers and is a good website to clarify the difference as it details all the terms and cash flows of the contract.
miller – Not sure what you mean by “cap” but the bottom line is Ohtani’s contract is worth approximately $460M and that’s how much it will cost the Dodgers.
If there were no deferrals, there would be no mention of $700M and Ohtani would NOT be receiving $70M annually …. that would be absolutely insane. LOL
Yes Spotrac is a great source for payroll info.
Deferrals DO impact the luxury tax, but not at 100% value. The deferred money is devalued to account for forecasted inflation and/or cost-of-living and an AAV number is applied. That retro-projected AAV is the luxury tax liability.
Because even the Dodgers wouldn’t have been able to spend as much as they have without their deferral tricks between the luxury tax savings and pushing a bunch of their payroll into the future with the deferrals themselves.
Aside from Cohen seemingly being willing to spend out of his own pocket to help subsidize the Mets’ payroll (which almost no other owner would ever consider), even large market teams like the Dodgers have their yearly revenue limits.
roche – Whether there’s deferrals or not, the value of the contract is still $461M and the AAV for CBT purposes is still $46M annually.
Some people seem to think Ohtani would have gotten $700M beginning this year however he graciously agreed to defer all of it.
No, he’s not that dumb and neither are the Dodgers.
No, that is the net present value of the contract, which accounts for compounded interest earned on the cash and inflation as it applies to the present day value of future cash flows.
The cash flows equate to a total of 700M dollars. 10 years at 2M annually over the years of active service, and 10 years at 68M annually until the full 700M has been paid. That can be verified at Spottrac.
@Fever
Overall the Dodgers get a few million shaved off the books. It might not be as drastic as what everyone is saying but it does affect the luxury tax.
I’m also a big proponent of signing bonuses impacting the luxury tax threshold as well. And instead of spreading it out every year, make all of it count for the first year. This will crack down a bit on small AAV deals in exchange for a huge signing bonus.
STEVE COHEN ISN’T SPENDING HIS OWN MONEY. Why does this not break through to people? It’s so bizarre. The Mets are spending the Mets’ money. Their revenue. Of which they have something like 3 or 4x what the A’s have (that may be conservative actually).
Steve Cohen is irrelevant. You or I could be the Mets owner and we’d have signed Juan Soto too.
Seam – Just for S&G, who do you think covers operating losses such as in 2023 when the Mets lost $292M after spending $420M on player payroll including luxury tax.
You think MLB covers every team’s losses?
I remember when the club sold, we were all so hopeful- I was a long time Oakland resident- and then Fisher showed his true colors and just gutted the team’s payroll, gutted all of it and kept pocketing the difference.
I really do think every club should be owned by a Steve Cohen or a Dodgers ownership group type of managing partnership or person, because basically every team should be competitive financially and be able to spend at virtually equitable rates and it boils down to ethos, club make up, approach, etc. all based on what kinds of players and roster construction will most likely win- and not so much what they can and cannot afford or don’t want to spend money on or can get away with looking like they made an effort financially but actually didn’t.
There’s this great scene in Entourage where the fictional owner of a major studio discusses its future like its a hot dog stand they technically own for fun but really their money is elsewhere- basically in this scenario the Movie Studio was a Big Five Major and this guy was treating it like it was those hot dogs you can buy at Costco, because they actually make their money in the store and the hot dogs are a fun bonus that’s part of their culture and brand image quality.
Anyway- every baseball club should be owned by someone of that level of financial flexibility so it really can be about roster construction and game strategy and not the weird world of the Dodgers, the Yankees, the Red Sox, etc. and then everybody else…. with the A’s epitomizing the idea of a Quadruple-A club.
Cities who host these sports teams deserve a certain amount of financial commitment from the ownership to support the economy and pay back the public for the stadium and tax breaks that the team gets. Some (most?) of the teams have foundations that do laudable charitable work for the community, but having a competitive team that gets fans to spend money is an economic engine that brings much more benefit than donations to repair neglected ball fields will.
I don’t know how you can say that, they are betting on future returns that are not guaranteed. They can’t predict the state of their business 10 years out, the state of the markets, but they are locking in massive expenses as if all will be well. Very well could be, but also could run into adverse market conditions.
The payables that you’ve put on the books arent changing. It’s a recipe for disaster in the long run.
The thing about MLB is that a team will always be in business, it will be the ownership group that goes bankrupt, and is forced to sell. New ownership group reorganizes the business.
Can a players contract be voided in bankruptcy? Sure it can. Will MLab let an ownership file bankruptcy? I don’t know.
Everybody thinks the Mets ownership group, Steve Cohen has all this capital to pump into the team, and he does. But the Mets business is likely organized separately from Cohen’s other businesses and private wealth.
All the money he pumps into the Mets from his other businesses he does so with loans to the Mets corporation, in which he is either the sole shareholder or the majority shareholder. The Mets owe Steve Cohen is a sense, same as they owe Juan Soto.
So in the event that the Mets business goes underwater, say Cohen can’t find the cash to lend them to cover there payroll, and the business isn’t generating the revenue to pay its operating expenses and debt, well the business will experience what is called a cash flow crisis and it will start missing payments to its current accounts and its debt holders.
Players will be looking for their checks but they won’t be in the mail. Now say the team goes into bankruptcy. Cohen will have likely repaid himself prior to the cash flow crunch so there will be no cash on the books. The only assets are the players and their ability to produce on the field. Can’t really liquidate those to raise cash. They don’t own the ballpark. Probably get a few grand for the bullpen car. But for the most part all the players will be SOL.
If the long term contracts continue, players will really have to start thinking to themselves, is this ownership group going to be around to pay me?
I’m sure the Mets franchise and the value of its cash flows will always be there to attract a new ownership group should the current ownership mismanage the team and be forced to sell but no guarantees, I guess that’s my point in a way. I can’t see all the angles in regards to what is going on but there is something to my line if thinking. I for one am hoping MLB survives another 50 years, I figure I have 50 years tops and would like to listen to games when I’m older.
It’s not about having a rich owner. Cohen is the exception, while every other owner sets their payroll to where they can make a yearly profit. As far as owners go, it’s more about avoiding a cheapskate owner (which yes, includes Fisher) who pockets too much profit.
I can’t see the whole picture so my understanding is limited but mounting long term contracts and mounting payments to players who can’t produce a winning team is bad for business. Fans stop going because you can’t afford to put a winning team on the field, revenues fall, it’s inevitable if you continue to spend on long term contracts over say 4 or 5 years. MLB has to put an end to the 10+ year contracts.
Well at least we now know why they wrote a check for Sevi. Not because they wanted to but because they were forced to.
Simm – Yes, and forced not just by the CBA but also because who the heck wants to play in a AAA park for 3 years.
The Rays will also have to overpay for free agents, like they did for Jansen.
One-year deals may not be too bad for the players’ consideration, but yeah, signing up to play their home games in a minor league stadium for three straight years is going to be a tough sell. At least the Rays can argue that they should still be in playoff contention.
Lan – I think between the difficulty in signing free agents, the lack of motivation in payroll spending when their revenue will be very limited playing in a ST stadium, and the impact of playing in an open-air Tampa stadium will all combine to torpedo their season. I’d bet good money they finish no higher than 4th.
No longer the Oakland A’s, now they’re just, Fisher’s AAA’s. (Also commonly referred to as, The F**kin’ Fishers.)
Really is a shame when ownership doesn’t care
The – I can speak from experience after 5+ years of Red Sox ownership not caring.
Struggled to lure free agents? A’s never even try. That’s a difference.
Every sports agent probably gets an email from a gen z intern like this:
“Hi we are sports team athletics looking for players.
They be good?
Cost important so cheap. But play good.
~written by bing AI
Intern out of office for next two years for mental health.”
Sounds like a good place for Taijuan Walker. They could get him for a bag of balls…..ping pong balls.
How much will they receive in revenue sharing?
I believe $70MM, give or take.
Contract MLB to 8 teams. Just the richest ones survive…
It will happen eventually anyway unless this fouled up system is changed.
Good! File grievances with the Rays and a handful or other clubs too while you’re at it!
Fisher takes it to the extreme. MLBPA can do what they want but it is really MLB who should have stepped in.
I have said “sell the team Bob” to my owner for several years now. They have been 30 million short of max payroll for a few years now.
Reds were top 5-10 payroll when Marge owned them and prior. She might sell day old doughnuts to employees but she paid the players.
Of course, there was no RSN fiasco then.
Found this one on A’s Revenue Sharing under current CBA. mlbtraderumors.com/2022/02/mlb-looking-to-move-ath…
Atleast the A’s don’t even try. In Detroit we have an owner that opens up the checkbook every few years but only for awful FA’s like Javy Baez and Jordan Zimmerman! It didn’t used to be like that when Mike Illitch was alive, he always put the money he made right back into the team and aggresively went after a WS title. Now you have his son Chris who pockets every dime the team makes and spends a few million on has been veteran arms and mid-to-late 30’s bench players turned starters! Ugh!!!
Just sign some mid-tier free agents and give them opt outs after one year easy peezy
This is not a bad position. Call up one of these teams who is looking to cut payroll and take some of the bad money off the books. Pick up some prospects along the way.
The Braves have David Fletcher making $8M in AAA. They might be interested in sending a mid-tier propsect along to get rid of his salary.
Vegas may be a desirable place to play, but how many top-shelf free agents are going to want to deal with playing in a minor league park with significant temperature issues for three years to get to Vegas?
Feels like a good team to call to dump your unwanted contracts.
If it’s the CBT number they need to hit, they could just buy out all the arb years on their arb class and structure it as typical escalating arb salaries and pocket the short term difference. I guess eventually it catches up, but they could trade those guys as the salary escalates and renew the strategy and perpetually kick that can down the road.
Bingo… we have a winner. I offer a trade to help both the no city Athletics and the many cities Angels. Anthony Rendon(e) for a bat and glove. A literal bat and glove since the Athletics in acquiring Rendon(e) won’t need it any more. They can even tell him he doesn’t have to play except when they visit SoCal. He might be able to stay “healthy” for those games.
Their spending increases seem more focused on avoiding a grievance from the MLB Players Association than on genuinely building a competitive team. This reactive strategy undermines the integrity of their roster construction process and suggests a prioritization of compliance over competitiveness. The reliance on reaching artificial payroll thresholds through potentially overpaying for lower-tier free agents or creatively inflating payroll lacks the forward-thinking investment required to develop a sustainable and successful franchise, especially as they transition to a new market in Las Vegas.
Starling Marte back to the A’s gets them close.
Isn’t this essentially the salary floor everyone wants? Let’s see if it changes baseball.
A’s can take on the salaries of players we don’t want: Yastrzemski, Wade, Doval, Flores, Rogers.
Let get something clear here, All teams are paying deferral’s., you just don’t hear about it..
They need to file one against $ternberg as well. That cheap SOB hasn’t signed a worthwhile free agent besides Charlie Morton since the Pat Burrell experiment, which I believe was before his time as owner.
Miami is a desirable place to play. How well do they do bringing in big name FAs?
I don’t think you can find a less desirable organization to play for than the A’s. Maybe in all of sports. John Fisher is widely recognized as the worst owner…again, in all of sports, not just MLB. I doubt Vegas is doing much to move that needle. It’s not a major market and it’s hot as balls, especially in the summer. Look where all the big MLB FAs sign: NY, CHI, LA.
Yeah, you’re right. I’m sure nobody else has noticed that the ownership just spent 20 years slowly destroying the franchise or anything.
Wouldn’t the Pirates be in the same bucket?
So if the A’s spend 26.5 million they get back 70 million? They should make a movie about this and call it “Fisher’s Millions”….or maybe “No Moneyball”
Deeds is an awful writer. There shouldn’t be a comma before “as well.”