Paying the luxury tax is becoming a bigger and bigger problem for the large spenders in Major League Baseball, but it’s not something everyone avoids. Six teams: The Yankees, Cubs, Red Sox, Dodgers, Tigers and Giants are on the list of “offenders”, a new record for number of teams.
The luxury tax line was $189 million in salary, and it’ll move up to $195 million next season, while a new CBA is about to be signed.
Luxury Tax Rankings for 2016:
- Los Angeles Dodgers, $31.8 million tax bill
- New York Yankees, $27.4 million
- Boston Red Sox, $4.5 million
- Detroit Tigers, $4 million
- San Francisco Giants, $3 million
- Chicago Cubs, $2.96 million
For the Yankees, it’s the 14th consecutive season of paying luxury tax. The Dodgers are in it for the fourth consecutive season, both paying way more than the rest of the teams on the list. The new CBA will have heftier penalties for repeat offenders, and that’s a problem for the Dodgers. They have $186.9 million going to players on guaranteed deals next season, and that’s before the arbitration money comes into account. Considering the financial issues behind the scenes is another factor, but overall it’s hard to see them going below the luxury tax threshold in the next few years, with plenty of their guaranteed deals carrying backloaded years.
The Yankees might be paying a lot as usual, but their plan is to go below the threshold. At the moment they’re at $195.4 million including arbitration, and plan on making more signings. But the goal is to reset their luxury tax status very soon. C.C. Sabathia becoming a free agent at the end of this season will help them achieve that goal, while Masahiro Tanaka could opt out of his deal, although the Yankees wouldn’t mind keeping him and his expensive contract.
The Detroit Tigers will be paying over $197 million in salaries next season, while the Chicago Cubs are in a very good position, paying only $175 million in projected salary in 2017. The Boston Red Sox have the highest projected salary in 2017, going past $208 million, even higher than the Dodgers $204 million. The San Francisco Giants are at $168.5 million right now. The best part for them is the very team-friendly deal they have Madison Bumgarner on, including team options worth $12 million a season in 2018 and 2019.