Graduation Year

2026

Date of Submission

4-2026

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics-Accounting

Reader 1

Ananda Ganguly

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Terms of Use for work posted in Scholarship@Claremont.

Abstract

This paper constructs and estimates competitive value ratios for 38 deferred contracts signed in Major League Baseball between 2015 and 2025, separating on-field value and financial flexibility available to the team as a result of deferral. Dollar per Wins Above Replacement is estimated using two-stage least squares regression, benchmarked against literature estimates with present-value calculations anchored to discount rates specified in the 2022 Collective Bargaining Agreement (CBA). The median WAR-based ratio across all contracts is 6.03, exceeding break-even in 30 of 38 contracts, and the median Competitive Balance Tax (CBT) savings ratio is 1.83, breaking even in 31 of 38 contracts. Both ratios are robust across all team and player discount rates used. The two ratios are largely independent at the contract level, suggesting CBT flexibility accrues to teams regardless of on-field outcomes. Access to meaningful CBT savings is structurally limited to teams operating near the CBT threshold, consistent with the hypothesis that the current CBA reinforces rather than corrects spending disparities going into the next round of collective bargaining.

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