Time for a CBT threshold update as labor negotiations continue

Based on the figures recently noted by MLB Trade Rumors, the overall framework of the next set of thresholds for the CBT (Collective Bargaining Tax) is coming into a clearer view. While other factors remain in play as far as negotiations are concerned between MLB and MLBPA, it is encouraging as fans to see how close both sides are in resolving a critical issue. Below are thresholds from each side in their most recent proposals, starting with MLBPA first.

As one can glean from the above information, there isn’t much of a difference in terms of separation between MLB and MLBPA. The average difference during this five-year period between the two sides is $4.4 million, which is slightly more than what the Astros are projected to pay Aledmys Díaz in 2022 (pending arbitration). The amount separating the two sides grows in each subsequent season, topping out at $8 million in 2026. That said, the overall framework for this next iteration of thresholds is in place, and $8 million isn’t exactly a sticking point to worry about. But as I write that sentence, it is difficult to forget how much the owners are digging in their heels over lesser issues, so who the heck knows if the threshold in 2026 will be a stumbling block. I hope it doesn’t, though.

So, why am I telling you all of this as an agreement remains elusive? The simple exercise of explaining what monetary resources the Astros will have at their disposal once the lockout is lifted. While most of the roster is in place, there remains the Carlos Correa-sized elephant in the room to address at shortstop in addition to any other positions, namely the bullpen and center field.

Here’s a helpful, if not depressing, reminder: Teams are not incentivized, at least at this moment, to spend up to the threshold. Per Cot’s Baseball Contracts, Houston currently has a 40-man tax payroll of $189,340,476 for the upcoming 2022 season. Under the previous threshold of $210 million, the club would have roughly $20.659 million to spend — in theory — before any tax penalties applied. The only reason I feel somewhat confident in stating that about the Astros is the willingness exhibited in the past by Jim Crane to spend up to that threshold or even slightly over for a season. While it isn’t a guarantee, I feel it is marginally safer than other clubs not named New York or Los Angeles to assume that much.

But back to the actual numbers. Say if we split the difference between the proposed figures from MLB and MLBPA, which averages out to $231 million. In this scenario, the Astros could spend an extra $21 million before reaching the first tier of tax penalties. Combined with their projected $20.659 million figure under the previous threshold, we’re looking at roughly $41.659 million in payroll space before penalties. I would be remiss, however, not to mention that this figure would likely decrease as it does appear possible — hopefully likely — that the minimum salary will rise in 2022. But that’s a good enough estimate for today of what to expect.

In essence, there is room for James Click and his front office to supplement the current roster in preparation for another postseason run. It also doesn’t hurt that this increase could include the necessary wiggle room for a new contract for Correa since paying any tax on player payroll is like kryptonite to most owners. For all intent and purposes, the thresholds do operate as a soft salary cap. But once the new agreement is in place, I am curious to see how the Astros approach negotiations, if they are still involved, for Correa. Am I hopeful for a reunion? Well, yes. Am I expecting one, even with this latest increase in the threshold limit? Still no, unfortunately. But I would love to be proven wrong once again.