Breaking News: Dodgers Smash Record with $169 Million Luxury Tax Bill; Blue Jays, Yankees Among Top Paying Teams
In a stunning turn of events, the Los Angeles Dodgers, fresh off their back-to-back World Series victories, have shattered records by accumulating a jaw-dropping $169.4 million in competitive balance tax (CBT) for the 2025 season. This colossal sum is part of their whopping $417.3 million CBT payroll, making it the highest in baseball history. The Dodgers’ 2025 roster stands as the most expensive lineup ever assembled in the sport.
The CBT threshold for 2025 was set at $241 million, triggering escalating tax rates for teams exceeding this limit, especially for repeat offenders like the Dodgers. They faced the highest tax rates, including a staggering 110% tax on each dollar spent over $301 million, affectionately dubbed the “Steve Cohen tax” after the Mets’ owner.
It’s important to note that the CBT payroll is calculated based on the average annual value of player contracts, not their actual salaries for the season. According to Cot’s Baseball Contracts, the Dodgers’ actual cash payroll for 2025 is estimated at $347.0 million. When factoring in the $169.4 million CBT bill, the total expenditure for the Dodgers’ championship-winning team in 2025 is expected to soar to a mind-blowing $516.4 million.
Joining the Dodgers in paying CBT this season are a record-tying nine teams, including the Mets, Yankees, Phillies, Blue Jays, Padres, Red Sox, Astros, and Rangers. The combined CBT payments from these teams amount to just under $403 million. As per the collective bargaining agreement, a portion of this sum will go towards player benefits, retirement accounts, and be distributed to non-CBT teams based on revenue growth and other factors by Commissioner Rob Manfred.
This latest development comes on the heels of the Dodgers’ $103.0 million CBT bill for the 2024 season, previously holding the record. The 2023 Mets were the only other team to reach a nine-figure CBT bill, totaling $100.8 million that year. Before 2023, no team had ever breached the $43.6 million mark in CBT payments.
Stay tuned for further updates on this breaking news as the baseball world grapples with the financial implications of these unprecedented luxury tax bills.
