The Los Angeles Dodgers are facing a massive $103 million luxury tax bill, the highest among nine MLB teams that broke baseball’s spending limits last season.
It’s a record-breaking year for baseball’s big spenders. Never before have so many teams had to pay the league’s penalty for excessive payrolls.
The New York Mets aren’t far behind, owing $97.1 million, while the Yankees need to write a check for $62.5 million. All three teams made deep playoff runs, with the Dodgers and Yankees reaching the World Series.
Six other teams are also on the hook:
• Philadelphia Phillies: $14.4 million
• Atlanta Braves: $14 million
• Texas Rangers: $10.8 million
• Houston Astros: $6.5 million
• San Francisco Giants: $2.4 million
• Chicago Cubs: $570,000
When you add it all up, MLB teams owe a whopping $311.3 million in luxury tax payments – shattering last year’s record of $209.8 million.
Baseball’s luxury tax isn’t just about actual salaries. Think of it as the league’s way of trying to keep wealthy teams from completely outspending everyone else. They look at each player’s average yearly value, not what they’re paid in any specific season.
For example, if a player signs a $20 million deal for two years, they count as $10 million against the tax each year – even if they’re actually getting paid differently.
Last year’s spending limit was set at $237 million. Teams that went way over – more than $40 million above the limit – got hit with an extra penalty: their top draft pick gets pushed back 10 spots (unless it’s in the top six).
The spending cap is going up slightly for next season, to $241 million. But with teams still spending big on free agents, we might see another record-breaking tax bill next year.
