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Steve Cohen’s spending for the Mets and the fallout for the rest of the league

Steve Cohen’s spending for the Mets and the fallout for the rest of the league

Most major league owners treat their teams like businesses. Steve Cohen, one of his former employees, said he’s getting closer mets As something else entirely.

“The way he views this business is very different than his hedge fund,” the employee said Wednesday. “It’s more like how he buys art. And he just spends whatever it takes on art. The guy’s got a billion dollars’ worth of art in his house. He gets it because he can.”

As baseball’s richest owner, Cohen is better positioned to assemble a super team than any other. But the owners’ brothers don’t usually look kindly on those who break away from the pack, especially when you’re racking up costs on them.

“I think it will have consequences for him in the future,” said an official with another major league team who was not authorized to speak publicly. There is no collusion. But… there was a reason no one ever made over $300 million over the course of years. You still have partners, and there is a system.

Cohen’s choice to raise his salary to over $380 million before luxury tax penalties — with a 12-year, $315 million agreement with Carlos Correa his last award – The industry has already polarized. It’s only $293 million, the fourth-highest level of the competitive credit tax—the penalty level introduced into the sport in March, promptly dubbed the “Steve Cohen tax.” He has taken his payroll to a level the sport has never seen. And in terms of peer spending, Cohen is an anomaly not seen in the game since George Steinbrenner.

For at least two other groups, Cohen is a boon: Mets fans, for one. and players. Cohen wants to win, which players love. But its spending is also growing their overall markets and their incomes.

Carlos Correa (Jeffrey Baker / USA Today)

Why have baseball players and their union fought against salary caps for so long? The news woke you up to Wednesday morning is one of many reasons. The Mets almost certainly couldn’t sign Correa this winter in a cap system. No other Steinbrenner can spend again, period.

Son of Steinbrenner Hall Yankees Chairman of the Board, he was more conservative in his spending than either his father or Cohen. after Press Conference for Aaron Judge On Wednesday, he said he did not regret voting for Cohen to become an owner.

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“I don’t think I ever regret voting for any owner,” Steinbrenner said.

When a reporter told Steinbrenner that Cohen’s overnight agreement with Korea was “big” Judge’s announcementSteinbrenner seemed amused.

“That looks ugly: big-footed, what does that even mean?” He said. “It doesn’t bother me. Listen, Steve has put together a great team. We have a great team, too. So it doesn’t bother me. The timing is what it is. I’m focused on today.”

Steinbrenner generally praised the Mets, calling them “phenomenal” for the city and the rivalry between two major league baseball teams.

There is no guarantee that the Mets will win, of course. As another expensive Cohen link, Justin VerlanderOn Tuesday, he noted, “The playoffs are a crapshoot.” But it can be said that the Mets’ winter is a boon for the sport. They’re creating a lot of news, and perhaps most importantly for the entertainment business, they’re creating a story: a reimagining of the Empire of Evil. Baseball thrives when there is theater, and teams trying to take on each other create drama.

“David and Goliath,” Yankees general manager Brian Cashman said Wednesday. “I think it’s all good for the narrative. They’re trying to make a team that can’t be beaten, and that their competition will look to try and beat.

“There are a lot of owners who spend a lot of money to improve their franchises, not just Steve Cohen and the New York Mets. He’s not that independent. We spent a lot of money ourselves this winter. But there are a lot of teams moving and shaking, and in most cases, that costs money.” “.

Fans of teams in smaller markets may disagree.

“Our sport looks broken right now,” another competition executive said Wednesday. “We have someone who has three times the average salary and doesn’t care at all about the long term of any of these contracts, in terms of the risks attached to any of them. How exactly does this work? I’m having a hard time wrapping my head around it.”

This leads us to an age-old question: are the other owners unable or unwilling to spend? Many players in the league and some clubs would say the former, depending on the team, and many players would suggest the latter. What teams think they can afford is subjective based on what individual owners feel is right for them, and most club financial records are not published. But different clubs certainly have different revenues, and Cohen certainly has the deepest pockets to draw on reports of his net worth.

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“I think everyone in this room understands that we have a level of revenue disparity in this sport that makes it impossible for some of our markets to compete in some of the numbers that we’ve seen,” Commissioner Rob Manfred said overall at the winter meetings. earlier this month. “You know, it’s not a positive thing. It’s like everything else in life, there’s good and bad in it.”

Whether Cohen ultimately cares about how other owners feel, or whether he could actually be hurt if he ignores those feelings is a different matter.

“This game is built on partnership and relationships, and these small markets will really piss him off,” said the club official. “They’re going to try to do it — and get Rob (Manfred) mad at him. It’s not that they can do anything for him, but everyone needs help in this game. I don’t think he’s going to get any help.”

Georg Steinbrenner has long been the target of other owners. In 2002, for example, Larry Dolan, then ClevelandOwner of , He said“George is a big part of our problem.”

How far did these attitudes hinder Steinbrenner in the end? Other owners haven’t set out to change the system, at least. cash man last year He noted that modern CBAs are designed “to prevent Yankees from being Yankees.”

Which brings us to the latest CBA. One of the trade-offs that owners took to increase their CBT thresholds was to create a new penalty class that many in the industry believed to be the Mets or just the Mets Dodgers is likely to come close. In 2022, any dollar spent above $290 million will be taxed starting at 80 percent. The Mets were over $10 million.

In 2023, that higher level starts at $293 million, and the Mets will be taxed at 90 percent for every dollar above. (The percentage has gone up this year because they committed a crime for the second time.)

“If he had gone to Cohen’s tax, a little more, I think he would have been fine,” the club official said of Cohen. “But the fact that he overdid it, it was like embarrassing Rob and a lot of people. He went so far as to make the whole CBA — he made them look stupid in CBA negotiations. He flaunted it to their faces.”

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Hal Steinbrenner was part of the working committee at Manfred that worked closely on the new CBA. Wasn’t the Fourth Degree intended to deter exactly what Cohen did?

Well, or someone else, Steinbrenner said Wednesday. “Obviously, yes, competitive balance is important to the game, and I remember meeting with you guys in March and saying, ‘The team’s fans shouldn’t come to spring training thinking they don’t have a chance to make the playoffs.'” It’s not good for baseball. So, yeah, there was definitely a purpose to it.”

But there seems reason to suspect that players or owners think Cohen’s tax will have a strong impact. In the case of the 2023 Mets, every dollar over $293 million would have been taxed at 75 percent in the old CBA, compared to 90 now. Obviously, a 15 percent difference, especially for an owner who already tends to spend a lot, doesn’t make much sense.

In March, landlords would certainly have liked something tougher—a higher tax rate, for example, not to mention a cap. But the players were also going to fight against it. Ultimately, baseball’s economic system gives the owner the freedom to spend, with few restrictions. Players have always wanted to maintain this freedom.

“If an owner is willing to spend 90 percent in taxes on $300 million, no CBA will solve that in the absence of an actual cap,” someone from the league team said Wednesday.

However, as the team of players appreciated in the past five years after the 2016 CBA, the result is the result, regardless of intent. The Cohen Tax does nothing to deter its name, and Manfred may have some increasingly unhappy owners to comfort them because of it.

And this is where Cohen’s spending could have the most profound impact. It would be a little over the top, and a little presumptuous to actually ask: Where were you when Steve Cohen started Lockdown 2026? But Cohen may have ignited perhaps the most fundamental conflict behind the scenes in baseball: big market versus smaller market.

the athleteKen Rosenthal contributed to this story.

(Photo by Steve Cohen: Jim McIsaac/Getty Images)