Tyler Mahle Can Push The Rangers Over The Tax Line

The Rangers clearly want to avoid the competitive balance tax in 2025. Evan Grant of the Dallas Morning News reported as much way back in October and owner Ray Davis confirmed that plan to Grant in January.

There are likely a few reasons for the club taking this route. The Rangers were one of several clubs which had a broadcast deal with Main Street Sports, formerly known as the Diamond Sports Group. As that company was going through bankruptcy, several clubs saw their contracts fall apart. Some of those organizations renegotiated new deals with the company but with lower fees. Other wound up with the league running their broadcasts.

The Rangers took a different approach and decided to launch their own regional sports network (RSN). Several big market clubs own RSNs, either in whole or in part, and many of them are doing well financially. The Rangers may have taken a smart route in the long run but it also might take some time to get it set up from scratch.

With that uncertain financial situation, the club decided it would be a good time to reset its CBT status after paying the tax in 2023 and 2024. Teams face increasing tax rates for paying the CBT in consecutive years. A team that avoids the tax in one year can then go into the following year as a “first-time” payor. Most teams like to limbo under the line from time to time, just to go back to square one.

But the Rangers still wanted to compete. They signed multiple players this offseason, including Nathan Eovaldi, Joc Pederson, Kyle Higashioka, Patrick Corbin, Kevin Pillar and a whole bunch of relievers. In the end, they came close to the line without going over it, at least according to publicly available metrics. RosterResource currently pegs them at $236.4MM, less than $5MM from the $241MM base threshold. Cot’s Baseball Contracts has them even closer at $237.8MM. Those are just estimates but they are probably close to accurate, given that the club wanted to be a bit under.

However, a club’s CBT number isn’t calculated until the end of the season, with any in-season developments being factored in. That includes contract bonuses/incentives for guys already on the club. Any players added midseason, such as in deadline trades, would also count.

That will be a situation worth watching in the coming months as the Rangers are currently atop the American League West with a 14-10 record. Assuming they stay in the race into the month of July, they should be deadline buyers. But if they want to…