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FORMULA 1
- PVF
- OLYMPICS
What if MLB Adopted NBA Maximum Contracts?
What if the MLB had a maximum salary structure similar to the NBA? One where players could only earn up to a percentage of the current CBT threshold, based on how many years of service they had in the league at the time. What would those contracts look like and subsequently how much could those players earn over the life of those contracts? We will take a look at three instances, Gerritt Cole (NYY), Juan Soto (WAS) and Max Scherzer (NYM), to see what their earnings could be under such a structure.
NBA Maximum Salaries 101
First, we have to look at how the NBA structures their maximum contracts. In short, a percentage of the current salary cap becomes the contract’s initial salary. There are three tiers based on years of experience. Using the current 2021-22 NBA cap maximum the following are the designated maximum salaries an NBA player could sign for based on their experience in the league.
Calculating a Maximum Contract’s First Salary
(2021-22 NBA Cap = $112,414,000)
25% of Cap (0-6 years of experience) = $28,103,500
30% of Cap (7-9 years of experience) = $33,724,260
35% of Cap (10+ years of experience) = $39,344,970
Length of Maximum Contracts
If a player signs a maximum contract with their current franchise, the contract can be up to 5 years long. If that player signs a maximum contract with a new franchise, the maximum length is 4 years.
Maximum Contract Salary Structure
Once the first year salary is determined using the above breakdown, the following salaries go up by a determined percent increase. If the maximum contract was signed with a player’s current franchise, salaries will increase based on 8% of the initial salary (always). If the maximum contract was signed with a new franchise, future salaries will increase based on 5% of the initial salary (always).
Applying A Maximum Structure to MLB
Now, let’s assume what a maximum salary structure could look like in MLB using the current and proposed CBT thresholds from the recent negotiations. Adjusted for a larger roster in MLB, we’ve determined the tiers to be 12% for 0-6 years of experience, 16% for 7-9 years of experience and 20% for 10+ years of experience.
2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2025 | ||
---|---|---|---|---|---|---|---|---|
YOE | CBT | $208M | $210M | $220M | $220M | $220M | $224M | $230M |
0-6 | 12% | $24,960,000 | $25,200,000 | $26,400,000 | $26,400,000 | $26,400,000 | $26,880,000 | $27,600,000 |
7-9 | 16% | $33,280,000 | $33,600,000 | $35,200,000 | $35,200,000 | $35,200,000 | $35,840,000 | $36,800,000 |
10+ | 20% | $41,600,000 | $42,000,000 | $44,000,000 | $44,000,000 | $44,000,000 | $44,800,000 | $46,000,000 |
We will also assume the same maximum years for the length of contracts to be signed, but will adjust the percent increase for salaries from 8% and 5% down to 5% and 2% respectively to account for the adjustment of the percentage of the CBT ($210M) compared to the NBA cap ($112M).
Types of MLB Maximum Contracts
We’ve developed three maximum contract options for each scenario below:
- Soft Max: Maximum starting salary based on CBT percentage for designated years of service with decreasing salaries of 2% or 5% based on first year salary.
- Flat Max: Maximum starting salary with 0% raises keeping the salaries flat.
- Hard Max: Maximum starting salary based on CBT percentage for designated years of service with increasing salaries of 2% or 5% based on first year salary.
Now let’s apply these hypothetical maximum salaries to Gerrit Cole’s situation when he signed as a free agent with the New York Yankees in 2020, Juan Soto who is currently under contract control with the Washington Nationals and was reportedly offered a 13 year, $350 million contract and recent free agent signee Max Schrezer who signed a 3 year $130 million contract with the New York Mets.
Example #1: Gerrit Cole
Gerritt Cole signed a 9 year, $324 million contract (AAV of $36 million) with the New York Yankees during the 2020 offseason. At that time Cole signed, he had 6 years of service time.
So let’s assume the New York Yankees offered Cole a maximum 4 year contract under the NBA free agent structure. Cole’s starting salary would have been $24,960,000 based on 12% of the $208 million CBT. NBA free agents signing with a new team see future salaries increase based on 2% of the first salary, so Cole would earn $499,200 extra each year of the contract. So Gerrit Cole’s projected “maximum” contract options with the Yankees would have looked like:
4-year Maximum Free Agent Contracts starting in 2020.
Salary increase and decrease based on 2% of first year salary as a free agent to a new team.
Soft Max | Flat Max | Hard Max | |||
---|---|---|---|---|---|
2020 | $24,960,000 | $24,960,000 | $24,960,000 | 6 years of service; 12% of CBT | |
2021 | $24,460,800 | $24,960,000 | $25,459,200 | ||
2022 | $23,961,600 | $24,960,000 | $25,958,400 | ||
2023 | $23,462,400 | $24,960,000 | $26,457,600 | ||
Total | $96,844,800 | $99,840,000 | $102,835,200 | ||
AAV | $24,211,200 | $24,960,000 | $25,708,800 |
At the end of that contract Cole will have 10+ years of service making him eligible to sign a new five year maximum contract with the New York Yankees (or a four year contract with another franchise). This means Cole would now be eligible for 20% of the CBT, or a $44,000,000 starting salary.
5-year Maximum Contract Extensions starting in 2024.
Salary increase and decrease based on 5% of first year salary by signing with the current team.
Soft Max | Flat Max | Hard Max | |||
---|---|---|---|---|---|
2024 | $44,000,000 | $44,000,000 | $44,000,000 | 10 years of service; 20% of CBT | |
2025 | $43,120,000 | $44,000,000 | $46,200,000 | ||
2026 | $42,240,000 | $44,000,000 | $48,400,000 | ||
2027 | $41,360,000 | $44,000,000 | $50,600,000 | ||
2028 | $40,480,000 | $44,000,000 | $52,800,000 | ||
Total | $211,200,000 | $220,000,000 | $242,000,000 | ||
AAV | $42,240,000 | $44,000,000 | $48,400,000 |
Gerrit Cole's Total Compensation for 2 Maximum Contracts
- Soft Max Combined Total: $308,044,800
- Flat Max Combined Total: $319,840,000
- Hard Max Combined Total: $344,835,200
Example #2: Juan Soto
It was recently reported that Juan Soto declined a 13 year, $350 million contract (AAV $26.9 million) with the Washington Nationals. Soto currently has 3+ years of service so he is eligible for a starting salary derived from 12% of the current CBT ($220M). Since he’ll be signing the contract with his current franchise, the deal is eligible to be 5 years, with a 5% increase for future salaries. Soto’s maximum contract options look like:
5-year Maximum Contract Extensions starting in 2022.
Salary increase and decrease based on 5% of first year salary by signing with the current team.
Soft Max | Flat Max | Hard Max | |||
---|---|---|---|---|---|
2022 | $26,400,000 | $26,400,000 | $26,400,000 | 3 years of service; 12% of CBT | |
2023 | $25,080,000 | $26,400,000 | $27,720,000 | ||
2024 | $23,760,000 | $26,400,000 | $29,040,000 | ||
2025 | $22,440,000 | $26,400,000 | $30,360,000 | ||
2026 | $21,120,000 | $26,400,000 | $31,680,000 | ||
Total | $118,800,000 | $132,000,000 | $145,200,000 | ||
AAV | $23,760,000 | $26,400,000 | $29,040,000 |
Once this initial contract completes, Soto will be eligible to sign an extension with a starting salary derived from 16% of the 2027 CBT threshold.
5-year Maximum Contract Extensions starting in 2027.
Salary increase and decrease based on 5% of first year salary by signing with the current team.
Soft Max | Flat Max | Hard Max | |||
---|---|---|---|---|---|
2027 | $37,440,000 | $37,440,000 | $37,440,000 | 8 years of service; 16% of CBT | |
2028 | $35,568,000 | $37,440,000 | $39,312,000 | ||
2029 | $33,696,000 | $37,440,000 | $41,184,000 | ||
2030 | $31,824,000 | $37,440,000 | $43,056,000 | ||
2031 | $29,952,000 | $37,440,000 | $44,928,000 | ||
Total | $168,480,000 | $187,200,000 | $205,920,000 | ||
AAV | $33,696,000 | $37,440,000 | $41,184,000 |
For those of you saying “it’s not fair” that Soto is still being calculated from the 2nd tier of maximum salary, this is the precise scenario that the NBA adopted the “Super Max” rule for. If a player is an MVP, Defensive Player of the Year, or multiple time All-Pro player, they can “skip a tier" of starting salary, and bump up to the next percentage level immediately, despite a lack of qualifying service time (re: Luka Doncic).
5-year “Super-Max” Contract Extensions starting in 2027.
Salary increase and decrease based on 5% of first year salary by signing with the current team.
Soft Max | Flat Max | Hard Max | |||
---|---|---|---|---|---|
2027 | $46,800,000 | $46,800,000 | $46,800,000 | 8 years of service; 20% of CBT | |
2028 | $44,460,000 | $46,800,000 | $49,140,000 | ||
2029 | $42,120,000 | $46,800,000 | $51,480,000 | ||
2030 | $39,780,000 | $46,800,000 | $53,820,000 | ||
2031 | $37,440,000 | $46,800,000 | $56,160,000 | ||
Total | $210,600,000 | $234,000,000 | $257,400,000 | ||
Total | $43,290,000 | $46,800,000 | $50,310,000 |
From there, Soto will be on one of two paths, the first where he stays on traditional maximum contract percentages (12%, then 16%, then 20%), or one where he is offered “super-max” eligibility in his 2nd extension, thus throwing his future compensation into a new stratosphere (12%, then 20%, then 105% of the final salary of his previous contract). We’ll explain more below.
Were he to stay on the traditional path, his 3rd contract extension with the Nationals would look like:
5-year Maximum Contracts starting in 2032.
Salary increase and decrease based on 5% of first year salary by signing with the current team.
Soft Max | Flat Max | Hard Max | |||
---|---|---|---|---|---|
2032 | $50,800,000 | $50,800,000 | $50,800,000 | 10+ years of service; 20% of CBT | |
2033 | $48,260,000 | $50,800,000 | $53,340,000 | ||
2034 | $45,720,000 | $50,800,000 | $55,880,000 | ||
2035 | $43,180,000 | $50,800,000 | $58,420,000 | ||
2036 | $40,640,000 | $50,800,000 | $60,960,000 | ||
Total | $228,600,000 | $254,000,000 | $279,400,000 | ||
Total | $46,990,000 | $50,800,000 | $54,610,000 |
However, if Soto were to be designated a “Super-Max’ candidate in 2027, his 3rd contract would now look something like this:
5-year Super-Super Maximum Contracts starting in 2032
105% of the previous “Super Max” salary of $56.16 million
Salary increase and decrease based on 5% of first year salary by signing with the current team.
Soft Max | Flat Max | Hard Max | |||
---|---|---|---|---|---|
2032 | $58,968,000 | $58,968,000 | $58,968,000 | 10+ years of service; 20% of CBT | |
2033 | $56,019,600 | $58,968,000 | $61,916,400 | ||
2034 | $53,071,200 | $58,968,000 | $64,864,800 | ||
2035 | $50,122,800 | $58,968,000 | $67,813,200 | ||
2036 | $47,174,400 | $58,968,000 | $70,761,600 | ||
Total | $265,356,000 | $294,840,000 | $324,324,000 | ||
Total | $54,545,400 | $58,968,000 | $63,390,600 |
Juan Soto's Total Compensation
Traditional Contract Path (12%, then 16%, then 20%)
- Soft Max Combined Total: 15 years, $515,880,000
- Flat Max Combined Total: 15 years, $573,200,000
- Hard Max Combined Total: 15 years, $608,520,000
Super-Max Contract Path (12%, then 20%, then 105% of the 20% salary)
- Soft Max Combined Total: 15 years, $594,756,000
- Flat Max Combined Total: 15 years, $660,840,000
- Hard Max Combined Total: 15 years, $726,924,000
Example #3: Max Scherzer
Max Scherzer signed a 3 year, $130 million (AAV of $43.3 million) contract this offseason with the New York Mets. Using the same structure above, Scherzer would be eligible for a starting salary at 20% of the projected $220M CBT threshold, or $44,000,000. He signed as a free agent with the Mets so we will only apply a 2% salary raise based on the first year ($880,000).
3-year Maximum Salary Contract starting in 2022.
Salary increase and decrease based on 2% of first year salary as a free agent to a new team.
Soft Max | Flat Max | Hard Max | |||
---|---|---|---|---|---|
2022 | $44,000,000 | $44,000,000 | $44,000,000 | 10+ yrs of service, 20% of CBT | |
2023 | $43,120,000 | $44,000,000 | $44,880,000 | ||
2024 | $42,240,000 | $44,000,000 | $45,760,000 | ||
Total | $129,360,000 | $132,000,000 | $134,640,000 | ||
AAV | $43,120,000 | $44,000,000 | $44,880,000 |
CATEGORIES
- NBA 93
- NFL 67
- GOLF 55
- NWSL 48
- MLB 27
- NHL 1
AUTHORS
- Michael Ginnitti NFL, MLB
- Keith Smith NBA
- Scott Allen Contributor
- Taylor Vincent NWSL
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