To pay the luxury tax, or not to pay the luxury tax — that has been the question all winter for the Dodgers. Los Angeles mostly sat out one of the craziest free agency periods in recent memory, watching from the sidelines as the rest of the league spent about $3 billion on free agents. LA added just three big-league free agents this winter: Shelby Miller, Noah Syndergaard, and JD Martinez.
Still, when Trevor Bauer’s suspension was reduced from the longest in the history of the league’s sexual assault policy to still the longest but slightly less long, that put the Dodgers on the hook for about $22.5 million of his salary this year, bumping them right up near the luxury tax limit, which it seemed like they were trying to stay under. Trading for Miguel Rojas seemed to seal the deal that they’re going over the luxury tax for the third straight year.
Los Angeles president of baseball operations Andrew Friedman talked with the media yesterday, and while the main topic was the Bauer situation, they talked about the payroll and where they stand. According to Fabian Ardaya of The Athletic, LA is resigned to exceeding the luxury tax again.
A winter in which much of the conversation around the Dodgers surrounded its young talent and not its wave of prominent free agents leaving the 111-win roster from 2022 had one caveat — there remained the possibility the Dodgers could duck below the luxury tax threshold and reset some of their tax penalties after years of spending that Friedman has said weren’t “sustainable.”
With Bauer now taking a sizable chunk of that payroll, that possibility no longer exists. Friedman said Wednesday that Bauer’s contract remained “a great unknown” as they navigated this winter.
“I don’t think it impacted what we either did or attempted to do this offseason,” Friedman said, noting there were some “aggressive moves” the Dodgers discussed but never materialized. The Dodgers have no plans of trading off the big-league roster to get under the luxury tax threshold, Friedman said.
Bill Plunkett of the Orange County Register worded things slightly differently.
Contradicting most analysis this winter, Friedman said the Dodgers were going to exceed the Competitive Balance Tax threshold even before the Bauer decision and that was not a hindrance to anything they tried to do this winter. The team is well over the CBT for the third consecutive season, Friedman said, and he doesn’t expect to make any moves to get the payroll under the threshold for the luxury tax (approximately $233 million).
“I mean, obviously, it was a great unknown,” Friedman said. “But I don’t think it impacted what we either did or attempted to do this offseason. There was a great unknown in terms of how it would play out and whether it would be scaled back entirely, upheld entirely or somewhere in the middle, which we obviously had no idea about. But we compartmentalized that and it didn’t affect what we either did or tried to do.”
We have some Friedman quotes, but beyond that we have paraphrasing from two reporters. Did Friedman really say they were going to go over the luxury tax even before the Bauer decision? Did he really say they’re “well over” the tax line right now? FanGraphs’ Roster Resource currently has LA’s CBT number just under $238 million, with the threshold at $233 million. That doesn’t include a possible $1.5 million in incentives Noah Syndergaard could earn. Does $5 million over the tax threshold really count as “well over”? I guess it could. But it doesn’t mesh at all with the idea that the team was over the tax threshold even before the Bauer decision, which means there’s a discrepancy either in what Friedman said or what Plunkett heard.
And then there’s Ardaya’s paraphrase about the Dodgers not trading off the big-league roster. Would that include Blake Treinen, who is owed $8 million this year and is out for the season? LA could try to package Treinen with some prospects to offload his salary in a trade, and it wouldn’t be coming from the big-league roster.
Either way, the Dodgers would have to purge at least $6.5 million to get under the tax, and even then they’d be prevented from making any big moves at the trade deadline to shore up the roster. We don’t know exactly the words Friedman said, and even if we did, we wouldn’t know exactly how truthful he was being. (“We’re fine going over the luxury tax” is a good posture to take to maximize leverage while trying to trade someone to get under the luxury tax.)
So we’ll have to take things at face value for now. The Dodgers are probably going over the luxury tax in 2023. Will that affect how aggressive they are in free agency next year? We’ll find out in about nine months.
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