Now that the regular season is over, teams are digging into their spreadsheets and pulling out their abaci to determine how much they paid in salary in 2023, and learning whether or not they will be subject to MLB’s (“CBT”). Most teams have a very good handle on these numbers well ahead of their final game, but other teams need to double and triple check their figures to learn their fate.

As a reminder, for 2023, the first CBT level is $233 million. Any salaries (and other player benefits) above that amount are subject to a CBT of either 20% (first-time offenders), 30% (second-timers), or 50% (third-time and more) (the tariff actually depending on how far over $233 million the team is). Going above the CBT levels also affects draft positions. And if a team can get below a threshold, they “reset” the tax and draft implications. As such, teams have every incentive to keep their payroll numbers in check, and to make sure they do their math correctly, as the results can have a lasting impact on the organization.

For many generations of fans, September 1st was a seminal day on the baseball calendar, as this was when teams could expand their rosters to 40 players. Fans got the opportunity to watch players they would likely never hear from again grace the diamond wearing really bizarre numbers on the backs of their jerseys. But in the current analytics era, this roster expansion gave teams a seemingly unlimited supply of pitchers to throw at opposing batters, leading to multiple pitching changes each inning, and interminable games to end the season. That all changed a few years ago.

In 2020, amongst the many rules promulgated for the pandemic-induced shortened season, MLB limited September call-ups to two players – expanded rosters from 26 to 28; and the league mandated that no team could carry more than fourteen pitchers. This rule ostensibly was enacted to avoid having too many people congregating in a small space, but the teams (and players?) seemed to like it, so it (like the “Manfred Man”) stuck.

To be fair, in years past, not every team expanded to the full 40 players. Five to ten extra players was the norm, but the possibility for more existed. Now teams are required to call up two players and have 28 each day for the month of September.


It turns out, from a financial perspective, this edict created a money-saving opportunity. And it also created a legal impediment to players accruing additional service time. Turns out that the new rule was just another in a long list of those that benefit the owners and hurt minor leaguers. Rather than offering prospects a limited shot at facing big league competition, the owners could now pad their bottom line.

But at what cost? And to what benefit?

Potential Cost to Fans: The new pitch clock and the three-batter minimum rules may have mitigated the negative effects of having too many available pitchers on a 40-man roster. With limited expansion, fans miss out on that one great pinch-runner, brought up just to wreak havoc on the base paths in the late innings; or that one prospect everyone is raving about who would not otherwise be ready for “The Show.” And, to paraphrase Crash Davis, the career Quad-A player potentially misses out on his one opportunity to not have to carry his own bags, to hit white balls for batting practice, and to play in ballparks that are cathedrals.

Potential Cost To Organizational Development: Would Roy Halladay have been one of the two pitchers promoted in 1998? What about David Price in 2008. Yogi Berra made his debut in September, going 2-4 with a home run, on his way to a Hall of Fame career. José Ramírez, Alan Trammel, and Carlos Beltran are just a few of the others who got their first taste of big league competition in September. It is wholly unknown if they would have been given the chance under the new rules.

Potential Benefit To The Owners:

Service Time: Under the old rule, the fourteen players called up accrued about a month of service time. Accordingly, if a player was called up for the month of September, and his team wanted to – ahem – assure another year of team control, they would have to hold that player in the minors for yet another month in the coming seasons. With the new rule, teams are faced with that conundrum for far fewer players (not to mention the that can accrue to a team if a player wins Rookie of the Year).

Travel Expenses: Then there is the travel expense of shuttling fourteen additional players from their minor league towns to big league cities, and then housing, feeding, and continuing to transport them throughout the month. While this may appear to be a small cost, hotel rooms, per diem, and attendant travel costs could add close to $500/day/player. Assume a team is only traveling half the month, with fourteen additional players, that is roughly $100,000.

Salary: The big hit is the big league salary each player must be paid. Based on the current minimum salary of $700,000, a player is entitled to $3,846 each day he is with the big club. For 14 players for the month of September, that adds up to about $1.6 million. At present, with only two additional players, that cost is limited to about $230,000.

Potential Benefit To Organizational Development: While a savings of roughly $1.4 million may seem relatively meaningless to a team valued at $2 billion, as was pointed out by Forbes contributor (who referenced Jeff Fletcher of the Orange County Register) that number is pretty close to the amount the Los Angeles Angels found themselves over the CBT threshold after their waiver claim fire sale in late August. The financial impact of that result for 2023 is minimal (20% of maybe $1.4 million = $280,000). But, if the Angels are lucky enough to re-sign Shohei Ohtani, they most certainly will be above the CBT threshold in 2024. And if the club is a second-time offender, they will be taxed at 30%, not 20%. But if – as expected – the Angels lose Ohtani to another team, as a non-tax payer, they would receive a supplemental draft pick after the second round; if they are required to pay the CBT, that draft pick is after the fourth. Small dollars can have huge consequences.

Owners and front offices, as per usual, need to balance their bottom lines and their team’s advancement. Those competing interests are not always easily resolved.