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The New Luxury Tax Threshold Means The Top 11 Salaried Clubs Will All Be Affected In The Present + Future

The Dodgers have spent over $300 MIL in back to back years, and are the clubhouse leaders in Luxury Tax penalties paid. At a 50% penalty, the Los Angeles forked out $40 MIL in Luxury Taxes in 2016. With an estimated $193 MIL payroll - considering there are several roster holes now created by departing players, the team will need to spend around $235 MIL in 2017 total payroll. With a 50% penalty - and an additional 40$ hit for going $40 MIL over the new $195 MIL limit in 2017, I highly expect the organization will be less willing to spend 90 cents extra for every dollar spent beyond that.

The Dodgers have spent over $300 MIL on salary in back to back years, and are the clubhouse leaders in Luxury Tax penalties paid in that time frame. At a 50% penalty currently until falling under the limit for a year, the Los Angeles forked out $40 MIL in Luxury Taxes in 2016. With an estimated $193 MIL payroll already is signed and team controlled players – considering there are several roster holes now created by departing guys, the team will need to spend around $235 MIL in 2017 total payroll in order to be competitive.. With a 50% penalty – and an additional 45% hit for going $40 MIL over the new $195 MIL limit in 2017, I highly expect the organization will be less willing to spend 90 cents extra for every dollar spent beyond that.

Hunter Stokes (Chief Writer/Part Owner) 

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With the new CBA being tentatively signed yesterday through 2021 – the lower payroll teams will finally see some steeper enforcement of higher payroll squads.

With several penalties that range up to a 90% max penalty for spending over the limit, the dollars finally make sense for the MLB to curtail a team going rogue on their payroll spending.

Under the new deal, the format will jump from a team’s AAV (Average Annual Value) limit of $189 MIL to $195 MIL in 2017, $197 MIL in 2018, $206 MIL in 2019,  $208 MIL in 2020 and $210 MIL on 2021.

The penalty for a 1st year abuser went from 12.5% to 20%, The 2nd year Still remains at 30%, the 3rd season escalates from 40% previously to 50% already.  Each campaign the team is over following 3 years, the team is nailed for 50% of money spent over the limit.

Additionally, the franchise will pay a fee of 12% for spending between $20 MIL to $40 MIL over the Threshold. 

If a organization goes $40 MIL over, they are faced with a surcharge of 42%.

3rd time abusers will pay 45% for every dollar doled out past $40 MIL over.

This means a 1st time penalty would still spank a team to the tune of 60% if a club spends more than $40 MIL over the limit. Read the rest of this entry

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