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Mets Owner Steve Cohen Discusses Luxury Tax, deGrom, Stroman

Mets owner Steve Cohen met with reporters (including Mike Puma of the New York Post and Anthony DiComo of yesterday to discuss the team’s outlook in advance of the July 30 trade deadline. Most notably, Cohen was asked whether he’d be willing to sign off on a midseason acquisition that pushes the team’s competitive balance tax outlay north of the first threshold of $210MM.

It’s something to think about because there is a price to pay if you go over for the following year or the year after,” Cohen said. “I am not going to go over for a million or two million. That’s stupid, so if you are going to do it, you are going to do it, so we’ll see what’s available.”

Cohen is alluding to the escalating penalties for teams that surpass the threshold in consecutive seasons. Under the current collective bargaining agreement, a club that exceeds the lowest threshold for the first time is subject to a 20% tax on the overage. Exceeding that threshold for a second consecutive year subjects the team to a 30% tax on the overage, while the club would pay a 50% tax on excess expenditures for a third consecutive season (and beyond) above that mark.

To calculate a team’s CBT ledger, the league takes the sum of the average annual values of each contract on the books in a season- not the actual payroll in any given year. For the Mets, that figure comes in just under $197MM in 2021, in the estimation of Cot’s Baseball Contracts. (Cot’s pegs their actual payroll at approximately $195.4MM). If Cohen is unwilling to go beyond the first threshold, that’d leave New York a little more than $13MM in CBT space for midseason upgrades.

Cohen didn’t explicitly state he’d be unwilling to push the team’s CBT ledger north of $210MM. Rather, he implied that it’d take one (or more) marquee additions for him to deem that worthwhile, based on the belief that the cost of higher potential penalties in future seasons would outweigh the value of making more marginal upgrades. Of course, that assumes the current luxury tax system will remain in the next CBA, which is up for negotiation this winter. The Mets did not exceed the threshold last season under the previous ownership group, so they’d be subject to the first-time payor penalty if they were to do so this year.

New York’s owner also addressed the contractual status of starters Jacob deGrom and Marcus Stroman. Cohen confirmed the club engaged in preliminary extension discussions with deGrom in Spring Training. Those were never expected to persist into the summer, though, and Cohen indeed shot down the possibility of in-season negotiations. “I’m focused on this year,” he said. “I don’t think it’s the right moment (for extension talks). We’re focused on this year, so obviously it’s something we’re thinking about. We love Jacob.” deGrom is under contract through 2024, but his deal affords him the opportunity to opt out at the end of next season.

Cohen also suggested it was unlikely the Mets would discuss an extension with Stroman during the year. The 30-year-old returned to Queens on an $18.9MM qualifying offer over the winter, and he’s since worked to a stellar 2.34 ERA/3.66 SIERA across 84 2/3 innings. Stroman will hit free agency again next offseason, and the CBA prevents the Mets from tagging with a QO this time around.

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