Los Angeles Dodgers payroll has annually been among baseball’s highest since Guggenheim Baseball Management purchased the team from former owner Frank McCourt.
The Dodgers exceeded the luxury tax threshold every season from the 2013-2017, then curtailed some of their spending to remain below it for 2018 and 2019. The Dodgers nearly were required to pay a competitive balance tax in 2020, but all teams were granted a reprieve due to unique circumstances with the COVID-impacted season.
The 2021 season progressively saw steps toward a return to normalcy, and with that came the Dodgers having the highest payroll and luxury tax bill.
Although both figures declined for the 2022 season, the Dodgers owe a luxury tax bill of $32 million, according to Ronald Blum of the Associated Press:
The Los Angeles Dodgers were hit with a $32 million luxury tax for the second straight season, among six teams paying a penalty as baseball payrolls rebounded after the lockout to a record $4.56 billion.
The Dodgers’ luxury tax bill for their 2022 payroll is $32.4 million. That’s a slight decrease from the $32.6 million they paid after the 2021 season. The Dodgers’ payroll for the 2022 season in terms of competitive balance tax purposes was $293,330,382.
Because of MLB suspending Trevor Bauer, L.A. fell behind the New York Mets for highest payroll in 2022. Nevertheless, the Dodgers surpassed the “Steve Cohen tax” line of $290 million.
With last season being the first year of a new collective bargaining agreement, the initial luxury tax threshold was set at $230 million. The Dodgers have now exceeded the threshold for two consecutive seasons and are on track to do so for a third year in a row in 2023.
Should the 2023 Dodgers payroll finish above the $233 million CBT line, they face an increased tax rate of 50% for the first threshold, then 62.5%, 95% and 110% on the second, third and fourth thresholds, respectively.
Dodgers luxury tax outlook for 2023
Although the Dodgers seemingly operated throughout the offseason with an intention of reseting their luxury tax penalties, Bauer’s suspension getting reduced effectively wiped out that possibility.
It was believed so too did a trade for Miguel Rojas, but the Dodgers reportedly had already exceeded the initial $233 million luxury tax threshold for 2023.
The team technically has until the end of the 2023 season to potentially get below the line, though president of baseball operations Andrew Friedman has denied it being a requirement.
Since 2013, the Dodgers have exceeded at least the first luxury tax threshold in seven of 10 seasons, paying nearly a total of $215 million in penalties.
2023 MLB Draft pick penalties
Due to going over the the second luxury tax threshold, the Dodgers had their first pick in the 2023 MLB Draft dropped 10 spots to No. 36 overall.
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