The payroll implications of Atlanta’s Sunday night trade…

The payroll implications of Atlanta’s Sunday night trade with the Seattle Mariners.

The payroll implications of Atlanta's Sunday night trade with the Seattle  Mariners - Sports Illustrated Atlanta Braves News, Analysis and More

The Braves took on two salaries to get outfielder Jarred Kelenic, and it has implications down the road for the Competitive Balance Tax.

It was a pure salary dump for the Mariners, with their 2024 payroll estimated to drop by around $20M after jettisoning the contracts of LHP Marco Gonzales ($12.25M) and 1B Evan White ($7M).

But adding those contracts to the current roster of the Braves has Competitive Balance Tax implications, as well.

Per Cot’s Contracts, the 2023 Braves finished in the luxury tax with a CBT payroll of $250.5M (versus an actual, cash payroll of $203M), resulting in an estimated tax bill of just over $3.5M.

(For reference, CBT payroll is calculated using the average annual value, or AAV, of every contract on the roster whereas cash payroll is calculated using the actual cash outlays to the player in that season. For example, Spencer Strider received only $1M in actual cash from the Braves in 2023, but his luxury tax figure was $12.5M, as the later years of his contract consistently rise towards the eventual $22M/year high water mark.)

And adding these three players have significant CBT implications.

(Jarred Kelenic’s the exception here, as he’s on a minimum salary contract for 2024 before reaching his first year of arbitration in 2025, but it’s a different story for Gonzales and White.)

The financial cost of the trade.

Gonzales is entering the final season of a four year, $30M contract he signed after 2021, at the age of 29. Entering his age 32 season, he’s due $12.25M in 2024, although the CBT figure is only $7.5M.

White, one of now six players who signed a major league contract prior to debuting in the majors, is in the 5th year of a six-year, $24M contract, making $7M in actual cash and having a CBT figure of $4M.

(The Mariners have included an undisclosed amount of cash in the trade.)

When you add these CBT payroll figures in with Atlanta’s offseason signings – bringing back Joe Jiménez and Pierce Johnson, and the signing of Reynaldo López in free agency – Atlanta’s looking at $250.8M in CBT tax salary for 2024 (per Spotrac).

The first threshold in 2024 sits at $237M for 2024, and as a second-time payor, Atlanta would pay a 30% surcharge on salary totals over the limit (as compared to the 20% paid last year as a first-time). Additionally, any payrolls in excess of $20M over the limit pay an additional 12% surcharge – for 2024, that limit projects to come in at $257M, just more than $6M from Atlanta’s currently projected CBT figure.

(That is subject to minor change, as arbitration awards have not been decided – and won’t be until January – and the combo of Max Fried and AJ Minter are projected to receive around $27M combined in arbitration. If Atlanta “wins” those hearings and pays them a lower salary, that can give the Braves more space from the second threshold.)

Be the first to comment

Leave a Reply

Your email address will not be published.


*