Dodgers News: Team Hit Hard By Luxury Tax
Saying the Los Angeles Dodgers had a high payroll is to say water is wet. We know this. That said, the organization might start to feel the repercussions of just how much they paid to put that team together, and the other teams in the MLB are laughing all the way to the bank.
Grading the quality of the roster is a flawed way to look at production, but the franchise can still feel an eight-figure hit.
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This, taken from an article run in the New York Post, speaks to the specifics of that financial burden. Joel Sherman pieced the information together.
I was told the Dodgers are just under $300 million, but close enough that awards bonuses might just nudge them over. For example, Clayton Kershaw is likely to finish second or third in voting for the NL Cy Young. If he does, he would earn a $1 million bonus.
The Dodgers are over for the second straight year, so they will be taxed at 30 percent for all money spent over $189 million. They are looking at a tax bill of about $33 million.
To put that into perspective, that’s roughly as much as either Clayton Kershaw or Zack Greinke will earn this season. Wouldn’t it be nice if the Dodgers had that money to spend on another high-end starter or another bat in what became a swiss-cheese lineup by the end of 2015?
This is where having albatross contracts like Andre Ethier or Carl Crawford can seriously hinder even a team like the Dodgers, whose bank accounts rival that of any in professional sports.
The Dodgers would obviously love to spend big this offseason, but likely can’t as much as they’d prefer, given the desire to stop handing out millions of dollars back to the MLB or other teams.
Other teams listed in the report: The New York Yankees, Boston Red Sox and Anaheim Angels – none of which participated in the playoffs beyond a wild card game.
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