The Los Angeles Dodgers had a relatively quiet offseason in terms of player acquisition, and it was widely attributed to the notion they were trying to reset luxury tax penalties by staying under the $233 million threshold for the 2023 season.
However, that will be challenging in the wake of Trevor Bauer’s record suspension being reduced. Even before their trade for Miguel Rojas, L.A. reportedly was above the initial $233 million luxury tax threshold this year.
If the Dodgers don’t stay under that CBT line by the end of the year, they face an increased tax rate of 50% for the first threshold, then 62.5%, 95% and 110% on the second, third and fourth thresholds, respectively.
Dodgers president of baseball operations Andrew Friedman denied it being a mandate and said he won’t trade from the Major League roster to possibly get below the luxury tax threshold, via Fabian Ardaya of The Athletic:
“No,” Friedman said flatly of the possibility. “We’re doing all we can to win a championship this year.”
The Dodgers could hypothetically attempt to stay under the luxury tax threshold by trading away high-priced players, but that would essentially mean punting the 2023 season and not competing for a World Series title.
The Dodgers lost several noteworthy players in free agency this offseason but still project to be a playoff team. After setting a new franchise record with 111 wins, Friedman acknowledged a drop-off for the club is likely, but that he still likes their chances of winning a championship.
Dodgers luxury tax penalties in 2023 MLB Draft
The Dodgers were one of six teams that went over the luxury tax threshold for the 2022 season, and as a result, owe a luxury tax bill of $32.4 million.
Along with the monetary penalty, the Dodgers’ first pick in the 2023 MLB Draft was moved back 10 spots. They were originally supposed to choose at No. 26 overall but now won’t make their first pick until 36th.
L.A. did gain compensatory draft picks after the fourth round for losing Tyler Anderson and Trea Turner in free agency. Those selections will be Nos. 135 and 136 overall.
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