where does luxury tax money go in baseball
Luxury tax (sports) The luxury tax is separate from revenue sharing, which is a system to balance out the income distribution between large and small market teams by dividing money from merchandise sales and media contracts. The money generated from the luxury tax is not distributed to the rest of the league, as is the case with the NBA, but rather is used for other purposes. The first $2,375,400 and 50% of the remaining total are used to fund player benefits, 25% goes to the Industry Growth Fund, and the remaining 25% is used to defray teams' funding obligations from player benefits.[6]
NBA salary cap The actual amount of the salary cap varies from year to year, and is calculated as a percentage of the league's revenue from the previous season. Under the CBA ratified in December 2011, the cap will continue to vary in future seasons based on league revenues. For the 2015–16 season, the salary cap was $70 million and the luxury tax limit was $84.74 million.[1] For the 2016–17 season, the salary cap was set at $94.14 million and the luxury tax limit was $113.29 million.[2] For the 2017–18 season, the latest projection is $99 million for the salary cap and $113 million for the luxury tax limit.[3]