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Friday, January 11, 2019

How MLB’s Luxury Tax Has Put a Deep Freeze on Spending - WSJ

Players also should consider the unintended consequences of their decision to screw amateurs and foreign free agents. By limiting the amount of money teams can spend on those players (in the hope the money would then be spent on MLB players), they’ve increased the surplus value of those players. At the same time, by not pushing for higher luxury limits, by not pushing for higher minimum salaries, and by limiting the money spent on farm/international players, teams (especially high revenue teams) have invested more money into improving their player development systems and processes. This, in turn, has made young players more viable options to replace higher cost veterans, enhancing their value even further.

Jim Furtado Posted: January 11, 2019 at 11:14 AM | 2 comment(s) Login to Bookmark
  Tags: cba, economics, luxury tax

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   1. JRVJ Posted: January 11, 2019 at 12:58 PM (#5804672)
I dunno.

Seems to me that banning PEDs has led to older players not being as productive, which has in turn made young (and cheap) players much more valuable.
   2. RoyalsRetro (AG#1F) Posted: January 11, 2019 at 02:36 PM (#5804744)
Seems like younger guys (under 30 y/o free agents, at least) are having trouble signing deals too. Is 30s productivity down from the 1980s?

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