The Los Angeles Dodgers are on track to pay a record luxury tax bill of nearly $50 million after entering the season with a payroll north of $300 million, according to the Associated Press.
The Dodgers would pay $47 million in luxury tax on their Opening Day payroll of $310.6 million, the AP reported.
The current baseline luxury tax threshold is $230 million, with five teams -- the Dodgers, Mets, Yankees, Phillies and Red Sox -- coming in over that mark at the outset of the season.
Among the Dodgers' offseason expenditures was a rich six-year contract for veteran first baseman Freddie Freeman and a sizable one-year payday for shortstop Trea Turner in his final season of arbitration eligibility.
Also still on the books for Los Angeles is the $34 million salary for pitcher Trevor Bauer, who was suspended for two years amid allegations of sexual misconduct. However, most of Bauer's salary would not count against the Dodgers' payroll if his suspension is upheld by an arbitrator, per the AP.
Here's how payrolls are calculated for the purpose of the league's luxury taxes:
Luxury tax payrolls include average annual values of all players on 40-man rosters plus just over $16 million per team for benefits and $1.67 million for each club’s share of the new $50 million pool for pre-arbitration players. Figures also include money owed released players, option buyouts and cash transactions.
Totals change throughout the season as trades and roster moves are made, and the tax is billed based on the final figure in December. For players remaining in salary arbitration, MLB included club offers in its payroll figures.
Under the terms of the new collective bargaining agreement reached earlier this year, there are four tax thresholds -- $230 million, $250 million, $270 million and $290 million. First-time offenders pay lower rates depending on which threshold they've crossed, while repeat offenders pay more.
Overall, the Yankees have paid the most in luxury taxes since the system was first introduced in 2003, with the Dodgers paying the second most.
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