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Dodgers Hit With Massive Luxury Tax Bill for Leading MLB in Payroll in 2021

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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25 Comments

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  1. Look at it a different angle. How much money did the Dodgers make after paying all the bills?
    Then compare all teams in a similar fashion that’s what I want to see.
    I believe if we really saw all the numbers in total we as Dodger fans would appreciate that this Dodger ownership group put money into putting out a good product. No offense to this writer but that’s the numbers I would really love to see (a much deeper analysis. I’ve been a long life Dodger fan but living in the Bay Area I’m a Oakland A’s season ticket holder for a good chunk of time. This year I’m letting them go and not repurchasing. The A’s ownership group put an extremely low amount into the team (and fan experience) I’m done giving them as much of my own hard earned money.(Lastly they are in the top 10 of richest owners in MLB)

  2. “the Dodgers were hit with $32.65 million in tax fees. ”

    Most of that was due to the 40M they paid Bauer, the true cost of that choice was mind-blowing.

    The Dodgers are currently on the hook for just under $235 million in 2022.

    It boggles my mind that the Bauer situation is still unresolved. Law enforcement handed the case over to the district attorney like 6 months ago, what on earth they are still waiting on is… who knows. Either charge him or drop it. I assume MLB is waiting on the district attorney, but if he is suspended without pay, that $235M drops significantly.

    • I think you’re right. And it is mind boggling. Why should the Dodgers have to pay Bauer or incur a luxury tax when Manfred took him away from the Dodgers without an arrest, trial, or conviction. Let MLB pay Bauer’s salary and any taxes associated with it. BTW the Dodgers probably would have won it all if Manfred had robbed them.

  3. This is why Roberts should have been fired. When your payroll is near $300MM and the team fizzles out to a NL Least team who won their division by default with only 88 wins – even when they wind up winning the WS against a team that didn’t have garbage can help – you do what every other team in baseball/sports do: Fire the manager and reorganize.
    There is no other solution. The talent was bought and traded for.

    • He won the world series the year before, and has the best record in baseball by far since he’s been their manager, and won the NL pennant 3 out of the last 5 years. You think every time they don’t win the WS they should fire the manager? I guess it was his fault also that Muncy was injured and Bauer off the team.

      • Correct, if even Bauer had pitched all yr things might have been different, or May, or Muncy at the very end. Sure every team has injuries, and that’s why many of them don’t even make the playoffs.
        I don’t like that Friedman is spending dor much when Tampa and Oakland can be good wothout spending so much. But it was money well spent, it just didn’t pan out.

    • Probably should fire management for signing souza and mckinney, trading for nuese, letting rangelo get away, not seeing beatty play more, and not getting good outfield replacements.

      And all the other bad/injured players they signed but who never contributed.

      • Also trading away good prospects for rentals, and letting players like hernandez get away.

        OR needlessly trading away prospects to rent betts. When could have kept them and signed harper.

        • Or way over paying for Bauer and Price and possibly kershaw, when the braves showed all need is good 3 million dollar pitcher and a good rookie.

        • OR way over paying for pitching like bauers, price, and others, when could have just used 3 Million dollar pitcher and and a rookie like AB did.

          • You’re so full of crap in every post you can’t think straight. The key word there was “healthy”. The relievers were severely overworked thanks to bullpen games. You are simply too foolish and unintelligent to understand otherwise, but that’s clearly how you operate in life in addition to this board.

  4. The team doesn’t care if exceeds the tax threshold in ’22; it’s ’23 they’ll plan for now. Maybe the LA County DA will have a Bauer resolution by then.

  5. First of all to “The sky is falling” fellow Dodger Fans….You all hate our closer when he blew what 6 in a row….Did Roberts make some decisions that didn’t turn out, sure did…they all do …but who remembers one mistake in the 2020 season???But as Dodgers Fan Now it is World Series or bust, instead of enjoying the fact that the Dodgers are there every year for the last 6 years…and are in the game until the very last out…geez enjoy it while we can…who knows Dodger ownership could always sell to another Frank POS McCourt…

    So Merry Christmas to all and keep the faith…remember frsco still sooks

  6. yes the big story here is how much the Dodger owners want a winner and are willing to pay the most including luxury tax. Bauer sit has to be resolved for Dodgers to have any chance at returning to max salary ceiling and avoid taxes. Overall, we are so happy to have such generous owners!!! McCourt was godawful as long as we had him as the owner.

  7. This is mostly because of the stupid signing of Bauer which I for one was totally against in the first place. I was hoping he would go to the Mets. I was hoping they would sign DJ LeMahieu instead of Bauer but alas they did not! :(:(

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