During collective bargaining agreement (CBA) negotiations between MLB and the Players Association, the owners, fearing that New York Mets’ owner Steve Cohen would outspend everyone by a large margin, pushed for a fourth competitive balance tax (CBT) threshold and a steep penalty.
Clubs that exceed the threshold are subject to a 20 percent surtax. Meanwhile, those who exceed it by more than $20 million are taxed at a 32 percent rate. The third tax (62.5 percent) would enter the equation when the club passed the initial CBT by more than $40 million. Well, the fourth tax, unofficially known as the Steve Cohen tax, is enforced when the team exceeds the $230 million threshold (for 2022) by $60 million or more, and involves an 80 percent tax rate.
Just a couple of days after the fourth tax was approved, the Mets’ owner confirmed what we all know: he is going to surpass it.
“$290 million dollars is a lot of money to spend overall,” Cohen said to Deesha Thosar of the New York Daily News, referencing the new CBT threshold. “I’m OK with it. I’m willing to live with it.”
Cohen talked to the media on Sunday at Clover Park, where the Mets’ spring training complex is located.
The Mets are the most expensive team in MLB
The Mets are currently at a projected payroll of $265 million, the largest in MLB, after acquiring Oakland Athletics’ pitcher Chris Bassitt. The team also signed reliever Adam Ottavino.
Reporters asked Cohen if he believed the Mets will exceed that $290 million luxury tax threshold, to which the billionaire, who is worth $15 billion, said the likelihood of that happening was high.
“We probably will [go over],” Cohen said. “I wouldn’t be surprised. Hard to say by how much.”
“I know there’s a name for it. They call it the ‘Cohen Tax,’” Cohen said. “That’s what [Brandon Nimmo] called it. The way I describe it is, it’s better than a bridge being named after you or something like that. It’s still a lot of money to spend on a payroll. I don’t feel like it’s so confining that I can’t live with it.”
We’re going to be careful at this point,” Cohen said. “After a few moves, we’re going to feel like we are where we are and then at that point I think we’ll have a team that we’re comfortable with.”