The Dodgers couldn’t run it back as the last team standing this year, but the club did lead all of baseball in at least one envious area. They spent all of the money.
That’s, of course, technically inaccurate, but LA was MLB’s top spender in 2021 ultimately spending $262 million in payroll for the season. And with that came the penalties. Moreover, for exceeding the competitive balance threshold which was set at $210 million for 2021, the Dodgers were hit with $32.65 million in tax fees. This figure comes via the Associated Press.
Altogether, LA’s luxury tax payroll was $285.6 million for 2021.
Anthony Franco of MLB Trade Rumors explained how tax fines are assessed here.
Teams are only subject to penalties on the dollars they spend above the threshold. The 2021 penalties for first-time payors checked in at 20% on every dollar between $210MM and $230MM, 32% on overages between $230MM and $250MM and 62.5% on each dollar spent above $250MM. CBT figures are calculated by summing the average annual values of all of a team’s player contracts (plus benefits), not by looking at a team’s actual payrolls in a given season.
The Dodgers are currently on the hook for just under $235 million in 2022. And that’s with Clayton Kershaw and Kenley Jansen among others still on the free agent market.
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