Steve Cohen at center of owners’ luxury tax friction

While most owners were willing to increase the luxury tax to $220 million, at least four — owners of the Angels, Tigers, Diamondbacks, and Reds — weren’t.

As it turns out, Steve Cohen was at the center of this drama whether he meant to be or not. Cohen is baseball’s richest owner, so he doesn’t seem to care if that’s the case luxury tax – MLB’s version of keeping the competitive balance through payroll – is increased.

However, small and medium-sized business owners care. The Reds’ Bob Castellini, the Tigers’ Chris Ilitch, the Diamondbacks’ Ken Kendrick and the Angels’ Arte Moreno opposed a tax hike, in part because it would require them to spend more to do it. This is despite the fact that the growth rate of the luxury tax hasn’t kept pace with overall revenue growth in the MLB.

Steve Cohen at the center of the luxury tax dispute

While Cohen hasn’t necessarily made his position known, it’s unlikely he’d have a problem with spending more than the tax – he’s been cited as willing to ignore it on numerous occasions. But the addition of more owners like Cohen, who don’t take much warning of the neglectful, is daunting for small market teams.

Through no fault of his own, Cohen was mentioned in negotiations by MLB owners, per Evan Drellich of The Athletic.

“In negotiating, owners have used the Mets and their relatively new owner Steve Cohen and the Dodgers as examples of teams where they are concerned about outperforming the competition, sources said. On Tuesday, a day after MLB jumped to $220 million, the league made an updated proposal to players in other areas — a last-ditch offer before games were canceled — but that package didn’t include any extra cash in the CBT thresholds .

The more baseball raises the luxury tax, the more small market owners think they’re going to overspend. The simple solutions to this are either spend more money or sell the teams that own them, but said hundred millionaires and billionaires don’t seem too keen on that approach. Steve Cohen at center of owners’ luxury tax friction

John Verrall

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