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The jeweler behind the Dodgers' chains
Jewelry has become an essential items to today's baseball uniform. Good Day LA's Bob DeCastro introduces us to the Orange County jeweler behind the chains of the LA Dodgers.
LOS ANGELES - The Los Angeles Dodgers have set a new Major League Baseball record by incurring a $169.4 million luxury tax bill following their second consecutive World Series title.
MLB luxury tax
What we know:
Major League Baseball and the players’ association finalized figures on Friday showing that the Dodgers' tax payroll reached a record $417.3 million.
This total includes noncash compensation for star Shohei Ohtani, such as an interpreter and a stadium suite.
The New York Mets follow with a $91.6 million tax assessment, despite missing the playoffs.
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Other teams owing significant amounts include the New York Yankees ($61.8 million), Philadelphia Phillies ($56.1 million), and Toronto Blue Jays ($13.6 million). San Diego, Boston, Houston, and Texas also owe smaller amounts, with the Texas Rangers paying the least among taxed teams at approximately $190,000.
2024 MLB payroll statistics and tax totals
By the numbers:
The financial gap between the top and bottom of the league remains vast, and the penalties for high spending are steeper than ever:
$169.4 million: The record single-season tax bill for the Los Angeles Dodgers.
$519.4 million: The Dodgers' total tax paid since 2003, now surpassing the Yankees' all-time total of $514.2 million.
$1.63 billion: Total taxes assessed to 15 teams since the penalty system began in 2003.
5 times: The difference between the Dodgers' tax payroll and the league-low Miami Marlins ($86.9 million).
$6.06 billion: Total league-wide spending on luxury tax payrolls this season, up 2.3% from last year.
The Cohen Tax: How Dodgers and Mets spending changed MLB history
The backstory:
The luxury tax, or competitive balance tax, was established in 2003 to curb runaway spending.
In the 2022 labor contract, a fourth threshold level was added—often called the "Cohen Tax" after Mets owner Steve Cohen—specifically designed to slow down the highest-spending clubs.
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The Dodgers, Mets, Yankees, and Phillies have all paid taxes for four consecutive seasons, triggering the highest possible tax rates.
These "repeater" rates can reach as high as 110% for spending that significantly exceeds the base threshold.
World Series success vs. spending: Why high payrolls don't guarantee playoffs
Big picture view:
While high spending often correlates with success, it does not guarantee it.
Among the nine teams paying the tax this year, three—the Mets, Astros, and Rangers—failed to make the postseason.
On the other hand, teams like the Blue Jays demonstrated the strategic benefit of "resetting" their tax status; by cutting payroll mid-season, Toronto saved approximately $21 million in potential penalties.
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The tax revenue collected is not just a penalty; it serves a functional purpose within the league's economy.
The first $3.5 million goes to player benefits, while the remainder is split between player IRAs and a discretionary fund for teams that grow their local revenue.
2025 MLB tax thresholds: What’s next for Ohtani and the Dodgers?
What's next:
Tax payments for the 2024 season are due to Major League Baseball by Jan. 21. Looking ahead to 2025, the initial tax threshold will rise to $244 million.
For the league's perennial big spenders like the Dodgers and Yankees, staying above this limit will continue to result in massive surcharges, with the highest tax rate set to hit 110% for payrolls exceeding $304 million.
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Final regular payroll figures for 2025, including base salaries and signing bonuses, are still being calculated.
The Source: This report is based on official financial data finalized by Major League Baseball (MLB) and the MLB Players Association, which was obtained and verified by The Associated Press. These figures are calculated using the average annual value of 40-man roster contracts, including earned bonuses and noncash compensation, as outlined in the league's collective bargaining agreement.