The Los Angeles Dodgers were one of two teams that exceeded the $210 million luxury tax threshold for the 2021 regular season and now owe $32.65 million for the overage.
Along with the monetary penalty, the Dodgers’ first pick in the 2022 MLB Draft was moved back 10 spots. They were originally supposed to choose at No. 30 overall but now won’t make their first pick until 40th.
L.A. has only once selected worse than No. 40 in the first round, which came in 2012 when they drafted Jesmuel Valentin at No. 51 overall. It was a supplemental pick for catcher Rod Barajas signing with the Pittsburgh Pirates in free agency.
The only other time the Dodgers held the No. 40 overall pick was 2005, which they used on right-handed pitcher Luke Hochevar. The two sides were unable to reach an agreement, however, leading Hochevar to be selected by the Kansas City Royals with the first overall pick in the following year’s draft.
While moving back 10 spots is far from ideal, the Dodgers did gain a compensatory draft pick after the fourth round for losing Corey Seager in free agency. He rejected the $18.4 million qualifying offer for the 2022 season before going on to sign a 10-year, $345 million contract with the Texas Rangers.
Had L.A. stayed under the luxury tax threshold, they would have received a compensatory pick after the first round of the 2022 MLB Draft.
The Dodgers going over the competitive balance has further implications on their ability to sign free agents who were extended the qualifying offer. Doing so would require the club to give up their second- and fifth-highest selections in the 2022 MLB Draft, as well as $1 million from their international bonus pool for the upcoming signing period.
Of course, the current system could change when a new collective bargaining agreement is agreed upon by MLB and the Players Association.
Dodgers luxury tax details
The Dodgers led all teams this year with a $285,599,944 payroll, which is the second-highest in MLB history behind their $291 million in salary that was on the books in 2015.
They were thrust into the luxury tax for the first time since the 2017 season by signing Trevor Bauer to a three-year, $102 million contract; and retaining Justin Turner on a two-year, $34 million contract.
The Dodgers are considered a first-time offender due to resetting their CBT penalties in prior seasons and thus were taxed at 20% for the first $20 million over $210 million, 32% on overages from $230-$250 million, and 62.5% for every dollar spent above $250 million.
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