Dodgers News: Los Angeles Owes Largest Luxury Tax Bill in MLB

In an unsurprising development, the Los Angeles Dodgers have the largest luxury tax bill in Major League Baseball, according to the Associated Press. L.A. will pay an additional $31.8 million for its payroll. It is the fourth consecutive season the Dodgers passed the tax threshold.

Franchises are taxed for spending in excess of $189 million. The Dodgers led the Majors investing $252,551,634 on players, though payroll attrition certainly occurred in the organization.

Dodgers final Luxury Tax payroll was $252,551,634, down $45,367,047 (-15.2%) from 2015 when it was nearly $300M ($297,918,681)

— Maury Brown (@BizballMaury) December 17, 2016

Since 2013, the Dodgers have paid $113,380,373 in Luxury Tax penalties, or 24% of the total in all LT payments in just four years.

— Maury Brown (@BizballMaury) December 17, 2016

Perhaps the decline in spending alludes to the Los Angeles Times report stating the Dodgers’ MLB-mandated need to cut payroll. In reality, the cost cutting is natural as the team sheds dead money off the books.

Much is made of the Dodgers’ attempt to “buy a championship” in the Guggenheim Partners ownership, but most of the team’s financial investments haven’t moved the needle. Brett Anderson was paid $15.6 million in 2016. Carl Crawford made $20.75 million with $21 million coming next year. Players such as Alex Guerrero, Andre Ethier and Scott Kazmir, among others, will continue to inflate payroll despite carrying minimal impact or being off the roster altogether.

The Dodgers were reportedly aiming to trim payroll, but re-signing Rich Hill, Justin Turner and Kenley Jansen was counterintuitive to that desire. Even with the dead weight and a new tax ceiling of $195 million next year, L.A. is probably staying beyond the mark for a while, especially if it dips into the 2018 free agent class and eventually gives extensions to players such as Clayton Kershaw, Corey Seager, Julio Urias, etc.

The luxury tax bills are as follows:

• Los Angeles Dodgers: $31.8MM
• New York Yankees: $27.4MM
• Boston Red Sox: $4.5MM
• Detroit Tigers: $4MM
• San Francisco Giants: $3.4MM
• Chicago Cubs: $2.96MM

The AP states it is the 14th straight season the Yankees exceeded the tax line. The Cubs are first-time payers, but with the trajectory of their roster, they likely become mainstays on the list. The Tigers are pushing to decrease payroll in an effort to dodge the payment next season.

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