The Los Angeles Dodgers have become repeat offenders in MLB’s competitive balance tax (CBT) system, shattering records for the highest CBT bill. The team’s 2024 payroll exceeded $353 million, pushing them into the fourth and highest tier of tax rates.
According to the CBT tiers, the Dodgers’ high payroll results in a 88.8% tax rate, totaling $103 million. This surpasses previous years, including 2023 when they paid $19.4 million. The team’s heavy spending on free agents like Shohei Ohtani and Yoshinobu Yamamoto contributed to this record-breaking figure.
The Dodgers’ CBT history is notable for the franchise’s repeated participation in the system. Since 2013, the team has paid a total of $337.2 million in taxes, with an average annual payroll of $260.9 million. This marks one of the highest totals among MLB teams during that period.
Dodgers president and CEO Stan Kasten attributes the team’s financial success to their strong fan base, saying, “They invest in us, in tickets, and merch, and all that stuff.” The team’s business model relies on a virtuous cycle, where fans support the team through investments, which in turn enables them to invest back into the community.
CBT payments are due by January 21, with a portion going towards funding players’ retirement accounts and another portion supporting a supplemental fund. As MLB continues to evolve its CBT system, teams like the Dodgers will continue to face increased financial scrutiny, making their business model an important case study in the league.
Source: https://www.truebluela.com/2024/12/20/24311420/dodgers-payroll-competitive-balance-tax-2024