Somebody here said there was a report that the Padres (?) offered (or were going to) one of the guys through age 44 but MLB told them no go. They've already allowed 41 for Pujols, 40 for both Cano and Cabrera so they're a bit stuck in terms of "precedent" (not that MLB has to stick to precedent). Also if they implement an official rule such as "no contracts long than 5 years that go past age 40" then MLBPA will push even harder for something like "FA after 6 years service or age 28, whichever comes first." Similarly it's hard to see the MLBPA ever agreeing to "no contracts longer than 8 years."

That said, I don't think the main goal of the Harper contract was avoiding CBT or even particularly deferment. He was only 25 (so the contract is only through 38 anyway) and he was the first guy we were talking about 10/$400 for. That went out the window with the fairly mundane 2016 and 2018 and partially missed 2017 but he still could have had 10/$300 (or the Dodgers 4/$180) but seemed to prefer the one he got. Ages 36-38 aren't usually very good but they're not as obvious a straight deferment as signing a guy through 40.

And then how much does it help. Obviously it can help in the short-term. But if one of the giant payroll team starts to do this, it won't be long before they have 5 37+ guys making $140 M and unless they're willing to go to $500, that will bite. One thing I suspect they're banking on is that there will of course be another CBA negotiation during these time along with more TV deals so the CBT thresholds will take anoter big leap. As such X might start out at around 11% of the first threshold and end it about 9% but that's hardly noteworthy.

Still I agree there seems to be something going on and I suspect there will be an unofficial MLB rule of 10 years or age 40 (or similar), otherwise MLB won't accept it. Or they could have some sort of rule like the total CBT of a contract is charged in the first 8 seasons.

Or maybe it has a bigger effect on not going over the 2nd or 3rd thresholds; it obviously makes it a bit easier to reset early in the contract.

Somebody here said there was a report that the Padres (?) offered (or were going to) one of the guys through age 44 but MLB told them no go.

Could all be true, but the public evidence is flimsy. It's all attributed to Heyman, and here's the middle paragraph of his three-paragraph piece,

There is word [the Padres] were contemplating a deal for $400 million-plus over 14 years that would have taken Judge to 44 years old. However, sources say they would not have been allowed, as MLB would have seen the additional years as only an attempt to lower their official payroll to lessen the tax.

The Padres reported $400M offer to Judge through his age-44 season may have pushed the envelope, but I’m not sure where the line is. Age-42? Manfred may be concerned, but I’m not sure he’d win a grievance after unilaterally vetoing a contract willingly agreed to by a team & player. Playing into one’s early 40s is reasonably common. Perhaps the next CBA will have a bright line rule?

Who cares - obviously they should tell orgs that deals much past 41 will be viewed as gaming the system but this is likely a huge mistake for these teams doing this. They'll get saddled with 3/4 contracts like this and it will materially impact flexibility. It's good for my team, the Cardinals , because they never spend outside their budget and will benefit in 5 years when these deals all start going south. The traditional approach is jettison someone In their last year (see: Heyward). Now we will see multiple years of that and the fans won't remember that it was all about trying to win 5 years earlier.

I spent my career in corporate finance and financing transactions that lasted longer than 5 years were almost always mistakes - things change and you need to be able to change course without massive penalties to do so.

The NHL had a similar dilemma about a decade ago with both a hard salary cap and teams offering stars 10+ year terms to skirt AAV and cap constraint issues.

IIRC, the league eventually made a rule that contract terms maxed out at 7 years.

40. Next question.

Since the number already has baseball relevance, maybe 42 is the age to stop teams from going past. It is also the age where the vast vast majority of players have declined enough you wouldn't want to be using them anyhow. I mean, clearly that is why Bonds wasn't signed for 2008.

The NBA has a rule about this already, actually. From Larry Coon's NBA Cap FAQ:

Certain contracts that extend past the player's 38th birthday are deemed Over-38 contracts. In an Over-38 contract, the presumption is that the seasons at the end of the contract are likely to come after the player retires. Therefore, the salaries in those seasons are classified as deferred compensation as described above. This is significant because deferred compensation is charged to team salary in the year it is earned, not the year it is paid.

...

The Over-38 rule has an additional component. As the player continues playing, and therefore proves wrong the assumption that he will retire before earning all his salary, the deferred salary stops being classified as deferred, and is shifted back onto the zero years of the contract. This begins to happen two seasons before the first zero year, and continues for each remaining year of the contract.

So that would be the simplest way of handling this - pick an age, let's say 40. You can still sign a player to a long-term deal stretching past that, but those years won't count towards calculating the AAV for the tax hit.

So that would be the simplest way of handling this - pick an age, let's say 40. You can still sign a player to a long-term deal stretching past that, but those years won't count towards calculating the AAV for the tax hit.

But the MLBPA won't want that. They want as many teams as possible with cap room and want the Yanks and Dodgers penalties as low as possible. So there are lots of potential solutions to this from MLB's perspective (or at least smaller-market owners' perspectives) but which will MLBPA agree to?

What exactly is the problem to be solved? Teams spending lots of money in ways that don’t squeeze them on the salary cap?

As a fan of baseball (not of the big spending teams) that’s a good thing.

This will squeeze the teams on the salary tax cap, just down the line. In 2035 the Giants are going to be paying around 30 million to a player who probably won’t be very good. That will make it harder to fit a competitive team under whatever budget they have at that time.

It’s not much of a concern to the front offices making these deals though, since very few of them will be around in the same jobs to worry about it.

EDIT: coke to Buck Coats.

But the MLBPA won't want that. They want as many teams as possible with cap room and want the Yanks and Dodgers penalties as low as possible. So there are lots of potential solutions to this from MLB's perspective (or at least smaller-market owners' perspectives) but which will MLBPA agree to?

They won't want it, but they also presumably don't like a luxury tax system that forces these extremely long-term/deferred deals. So it should be something that can be negotiated. If MLB cares about making the change they will offer something in return.

Toward the end of the deal they'll have to attach talent to the contracts to send them to mid-market teams who will play the former stars until they're useless and then cut them.

They won't want it, but they also presumably don't like a luxury tax system that forces these extremely long-term/deferred deals.

The MLBPA would like to get rid of the lux tax altogether of course but that's not going to happen at this point. But I see no evidence the players dislike the "more years, less AAV" model ... other than Trevor Bauer maybe. Harper reportedly turned down a 4-year, big AAV deal from the Dodgers in favor of his 13-year beastie. Add in that they can usually negotiate an opt-out, why would players want to get rid of 10+ year deals? Given they know performance after 35-36 is questionable, why would they want to get rid of contracts that run through 39?

But it's nearly moot because of the mechanics of it. Maybe Judge and the MLBPA would prefer 6/$300 but (a) the Yanks don't want that; (b) that's really only possible if the lux tax threshhold is gonna be boosted to like $270-300 M which MLB doesn't want; and (c) why would the MLBPA believe that, say, restricting contracts to 8 years is going to result in 8/$300+ M contract offers? Or will the Phils say "Sorry Trea, we can't afford more than $30 per year max."

The "problem" MLB has is that, after a decade or so of the big market teams sticking to the threshhold (exc Yanks then Dodgers), a number of teams are now going over threshhold and the Dodgers and now Mets sometimes going way over.** And again, the MLBPA has no incentive to help MLB get that under control; of course they want the exact opposite and want penalties reduced. Of course MLB could make a concession to MLBPA to make it happen but seems to me it would need to be a pretty big one.

That said, in my opinion the main disconnect between the MLB market and reality is due to the MLBPA not winning a bigger jump in the threshold in the CBA negotiation before this one and never having an enforceable salary floor. For 2017-21 (or whatever), the threshold should have been about where it is now; then in this CBA, they could have fought to push it to $250-260. Revenues were going through the roof while payroll was stagnant. So it's now a league where the Dodgers can easily afford to be $100 M over the threshold (but aren't "allowed" to) while the Pirates can pretty easily clear $100 M a year in profit by not spending on players.

** Sure MLB collects more tax but MLB is not a government, they don't really have anything to spend that tax revenue on.

Add in that they can usually negotiate an opt-out, why would players want to get rid of 10+ year deals?

Presumably they would rather get the same amount of value* over 8 years rather than 10 years (or 10 years rather than 14 years).

* Notice I didn't say the same amount of money. I know that a $400 million deal with deferrals will be less, nominally, if you do it without the deferrals. But deferrals have risk (i.e. the risk that inflation goes to 10%). And everyone wants to get their money more quickly if they can.

Solutions in search of a problem.

They should do a “forward pass” and a “backward pass” when determining luxury tax. As long as a player is on the 25-man, the “salary year” counts towards AAV. If he is released, it doesn’t.

If the team gives a 20 year contract to keep AAV down, let them. As long as they then keep the 55 year old player taking up a space on the active roster. The minute he stops showing up, all the luxury tax over the period of the contract gets recalculated. Easy peasy, and no need for authoritarian arbitrary decisions.