In regards to the luxury tax of MLB, where does the money go after being taken from the Yankees, Red Sox, etc.
Answers:
How does position balance in my roster affect my scoring? Should I have more hitters than pitchers?
It`s spread out among small market teams.I don't know what MLB's cut is, but supposedly a good chunk goes to the low revenue teams. The luxury tax is MLB's version of revenue sharing, to help the guys that don't make much or any profit stay above water.
It also helps small market teams stay competitive. The Yanks have been helping World Series winners for a few years now. They buy a team to win a world series and then give money to the team that actually does win it. Seems fair.
I cannot find a copy of the 2007-11 Collective Bargaining Agreement (which is very frustrating), but from the summary bullets (http://mlb.mlb.com/news/press_releases/p... the straight revenue sharing pool is generated by 31% tax on defined revenues (exactly which streams are not clear -- ticket sales, concessions & parking, advertising, and the big one, local television/radio rights -- are probably among them). Payroll luxury taxes kick in at different thresholds, increasing each year; the 2007 threshold is $148M. The luxury tax rate starts at 22.5% and goes up for subsequent violations.
The monies are then doled out through some formula, and the commissioner has a discretionary bucket as well. I don't have more recent data, but here's the 2005 revenue shares paid out:
Baltimore $2M
Washington $3.9M
San Diego $5.7M
Philadelphia $5.8M
Cleveland $6M
Arizona $13M
Cincinnati $16M
Colorado $16M
Oakland $19M
Minnesota $22M
Milwaukee $24M
Detroit $25M
Pittsburgh $25M
Kansas City $30M
Florida $31M
Toronto $31M
Tampa Bay $33M
Yep, Florida got paid more than twice its 2006 player payroll.
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