TEAM FINANCES

Each fiscal year (beginning January 1st), every franchise will receive an Annual Revenue Sharing Deposit (ARSD). Throughout this constitution, "ARSD" will be used as the abbreviation for Annual Revenue Sharing Deposit.
The ARSD amount shall be calculated as the median opening day payroll of the top 16 Major League Baseball teams from the most recently completed MLB season, rounded to the nearest $5 million.
The League Commissioner will announce the official ARSD amount for the upcoming season by October 1st of each year.
All franchises receive an identical ARSD regardless of team performance or market size, ensuring competitive balance through equal revenue sharing.
The ARSD for the 2026 league season (based on 2025 MLB opening day payrolls) shall be $220,000,000.

Every franchise must maintain a minimum team payroll equal to 70% of the ARSD. ($154M in 2026)
Team payroll for salary floor calculations includes all money spent on player salaries for the current season.
The salary floor is assessed on October 1st (the day after the regular season ends).
Franchises failing to meet the salary floor by October 1st AND failing to qualify for the playoffs will incur a fine equal to the difference between the salary floor and actual team payroll PLUS an additional fine equal to 20% of the ARSD.

The Competitive Balance Tax, hereafter referred to as "luxury tax," creates a soft salary cap at 150% of the ARSD.
Any franchise exceeding the luxury tax threshold will pay escalating penalties based on consecutive years over the threshold as follows:
- First-time offender (Year 1 over threshold): 20% tax rate on dollars over threshold
- Second consecutive year over threshold: 30% tax rate on dollars over threshold
- Third consecutive year over threshold: 50% tax rate on dollars over threshold
- Fourth+ consecutive years over threshold: 50% tax rate on all dollars over threshold, plus additional 12% surtax on dollars $20M+ over threshold, plus additional 42.5% surtax on dollars $40M+ over threshold
Dropping below the luxury tax threshold for one full season resets a team's penalty tier to "first-time offender."

Luxury Tax Payments and all fines to teams are distributed after the year.
- All luxury tax payments and fines that are collected during a season are pooled.
- 50% of the pool is distributed equally among all teams that remained under the luxury tax threshold for that season.
- 50% of the pool is distributed equally among all teams that did not get fined, esp for the salary floor.
- Teams qualifying for both distributions receive funds from both pools
- Distribution occurs on January 1st with their ARSD.

Each franchise maintains a bank account that tracks all financial transactions throughout the league year.
Bank accounts receive deposits from the ARSD, luxury tax distributions, salary floor penalty distributions, and any other league revenue sources.
Bank accounts are debited for player salaries, luxury tax payments, salary floor penalties, and other league-mandated expenses.
Franchises may carry over unspent funds from year to year without limit, allowing teams to save for future expenditures or manage long-term financial strategies.
All bank account transactions must be reported to the League Commissioner and recorded in the official league financial ledger.

When a franchise releases a player with remaining guaranteed contract years, the team remains financially obligated for the entire guaranteed amount.
Released player salaries ("dead money") continue to count against the team's salary floor calculations and luxury tax threshold calculations for their original contract duration.
Upon releasing a player, the franchise must choose one of two payment options:
- Option A: Pay the Net Present Value (NPV) of all remaining guaranteed money immediately in a lump sum. This amount counts only toward the current season's salary floor and luxury tax calculations.
- Option B: Pay the remaining guaranteed salary according to the original contract schedule. Each year's payment counts toward that respective season's salary floor and luxury tax calculations.
The NPV calculation for Option A shall use a 5% annual discount rate.
This choice must be declared within 48 hours of releasing the player and reported to the League Commissioner.
The one-time choice is binding and may not be changed regardless of future circumstances (trades, team sale, etc.).

If a player's career ends due to death, the team is immediately relieved of all remaining contract obligations with no penalty.
If a player's career ends due to injury or medical condition that is not baseball related, requiring retirement:
- Team owes 5% of remaining contract value if only 1 year remains
- Team owes 10% of one year's salary if multiple years remain
- Team must apply for medical retirement exemption with supporting documentation
- League Commissioner has final approval authority
If a player voluntarily retires for non-medical reasons, the team owes nothing.
If a player is cut by the team (forced retirement from MLB due to no one wanting to sign them), the entire remaining contract is valid and must be paid as if the team released the player under Rule 2-6.
The distinction between voluntary retirement and forced retirement shall be determined by the League Commissioner during the off-season.
During the regular season, a Strat-O-Matic player card cannot be forced into retirement.

Ballpark Selection: Each franchise must designate one home ballpark for all home games.
Ballpark Ratings: Ballpark ratings consist of four dimensions: singles rating and home run rating for both left-handed and right-handed batters, as determined by the official Strat-O-Matic ballpark rating system.
MLB Ballparks:
- Teams may select any existing Major League Baseball ballpark as their home venue
- MLB ballparks have no installation cost and no annual upkeep cost
- Each MLB ballpark may only be used by one TSBBL franchise (no duplicates allowed)
- MLB ballpark ratings fluctuate annually based on real-world stadium modifications and Strat-O-Matic rating adjustments
Custom Ballparks: Teams may design custom ballparks with ratings of their choice, subject to the following cost structure:
- Symmetrical Parks (identical ratings for left-handed and right-handed batters): Installation Cost: $5,000,000; Annual Upkeep: $1,000,000
- Semi-Symmetrical Parks (difference of 4 or less between left-handed and right-handed ratings in any dimension): Installation Cost: $7,500,000; Annual Upkeep: $1,500,000
- Asymmetrical Parks (difference of 5 or more between left-handed and right-handed ratings in at least one dimension): Installation Cost: $10,000,000; Annual Upkeep: $2,000,000
Switching Ballparks:
- Teams must remain in their current ballpark (custom or MLB) for a minimum of 3 years before switching
- Teams switching from a custom ballpark to an MLB ballpark must pay double the custom ballpark's annual upkeep cost as a one-time exit fee
- Teams switching from one MLB ballpark to another MLB ballpark must pay a one-time fee of $2,000,000
- After paying any applicable exit or switching fees, the new MLB ballpark incurs no further costs
New Ownership Ballpark Selection:
- When a new owner assumes control of an existing franchise, they may change the ballpark during either of their first two off-seasons at no installation cost
- If changing ballparks in their second off-season, the new owner must pay any applicable upkeep costs for Year 1
- If retaining the previous ballpark, all existing costs and obligations continue
Expansion Team Ballpark Selection:
- Expansion teams may select any available MLB ballpark or design a custom ballpark
- Expansion teams selecting custom ballparks must declare their choice by December 1st preceding their inaugural season
- Expansion teams need not pay installation costs or declare specific dimensions until the December 1st deadline, allowing them to review Strat-O-Matic's ratings preview before finalizing their ballpark design
- Annual upkeep costs begin in the expansion team's first season
Annual Upkeep Payment: All custom ballpark upkeep costs are due on January 1st of each year and are deducted from the team's bank account.