A record nine Major League Baseball teams exceeded the luxury tax threshold for 2024, according to a recent memo obtained by ESPN. The Los Angeles Dodgers paid the highest amount of $103,016,896, while the New York Mets followed with $97,115,609.
The Chicago Cubs had the lowest tax bill of $570,309 among the six teams that exceeded the competitive balance tax (CBT) threshold of $237 million. This group includes the New York Yankees ($62,512,111), Philadelphia Phillies ($14,351,954), Atlanta Braves ($14,026,496), Texas Rangers ($10,807,196), Houston Astros ($6,483,041), and San Francisco Giants ($2,421,788).
The Dodgers, Mets, Yankees, and Phillies were taxed at a rate of 50% due to exceeding the threshold for three or more consecutive years. The Braves and Rangers were taxed at 30%, while the Astros, Giants, and Cubs were first-time offenders, paying 20%.
A team’s CBT figure is calculated based on player contracts and benefits. If a team dips below the threshold in one season, their tax rate resets to 20%. The revenue from luxury tax penalties is allocated as follows: $3.5 million for player benefits, 50% of the remainder for player retirement funds, and the other half for the supplemental commissioner’s discretionary fund, redistributed among teams that receive revenue sharing.
Source: https://www.espn.com/mlb/story/_/id/43082037/dodgers-mets-yankees-top-mlb-record-9-luxury-tax-offenders