While Major League Baseball and the MLB Players Association have officially reached a deal on a temporary re-working of the collective bargaining agreement, the details are still filtering out. One key element of the coronavirus alteration is the role of the competitive balance (“luxury”) tax.
The CBT has played a notable role in structuring roster decision making in recent years. Even those organizations willing to pay it from time to time have sought to avoid doing so in consecutive seasons. Repeat offenders pay heavier rates on their overages. Big-spending teams have come to recognize that dipping back under the bar to reset the luxury tax rate can make for massive savings.
We have learned some details of the modified system, including the fact that there’s no CBT obligation if a season isn’t played. (Otherwise, it’ll be handled on a pro-rated basis.) But that doesn’t mean that, in the unfortunate event of a canceled season, every team would start with a clean slate in the 2020-21 offseason. Instead, per Alex Speier of the Boston Globe, the pre-2020 CBT status would carry forward.