Getty Los Angeles Dodgers superstars Mookie Betts and Freddie Freeman step up to bat
The Los Angeles Dodgers are now expected to incur 2024’s highest payroll as measured for MLB’s competitive balance tax (CBT) with the acquisition of free-agent starting pitcher James Paxton.
“If Dodgers finish Paxton deal, they will likely move ahead of Mets at the top of the payroll leaderboard,” Jon Heyman of the New York Post reported as the Dodgers were nearing a deal with Paxton.
Heyman has since reported that an agreement between both sides is in place, and that Paxton’s contract will pay him $11 million along with a $1 million “Opening Day roster bonus” and a potential $1 million in additional incentives.
Sportrac, reflecting the $12 million reportedly going to Paxton, now projects the Dodgers’ 2024 estimated “actual tax payroll” to be $302,828,048 — the highest projected figure for any team in the league.
Los Angeles Dodgers’ Big Free Agent Spending Creates Highest Payroll in MLB
Despite more than $1 billion in offseason spending, massive deferrals have made the “present day value” of the Dodgers’ contracts much less. For instance, Shohei Ohtani’s $700 million contract defers $68 million per year, making its “present day” value closer to $437 million. Similar structures are in place for Mookie Betts, Freddie Freeman and others.
Excluding the tax implications, the Dodgers’s payroll is actually just the sixth-largest in MLB, despite their bevvy of talent. Per Sportrac, the largest projected 2024 team payrolls as of this writing are:
- New York Yankees, $302 million
- New York Mets, $284 million
- Houston Astros, $247 million
- Philadelphia Phillies, $238 million
- Atlanta Braves, $231 million
- Los Angeles Dodgers, $221 million
- Texas Rangers, $220 million
- Toronto Blue Jays, $199 million
- Chicago Cubs, $196 million
- Boston Red Sox, $180 million
But in MLB, the CBT — also known as its “luxury tax” — requires teams that carry a payroll above a given threshold to pay a tax on each dollar above that threshold. It’s based on the average annual salary of each player on the team, but is not officially calculated until the end of the season.
For the Dodgers, the actual bottom line for 2024 with taxes included, has now exceeded that of the New York Mets, the previous actual tax payroll leader per Spotrac at $299,393,525.
How James Paxton Impacts the Los Angeles Dodgers’ Pitching Rotation
Compared to the contracts of some of his new teammates, Paxton’s $12 million is relatively small. But his impact on the pitching staff could be significant, particularly if he serves as a reliable starter who allows the team to extend to a six-man rotation.
Paxton is set to join Yoshinobu Yamamoto, Tyler Glasnow, Bobby Miller as well as Walker Buehler and if the Dodgers trust another arm — possibly young upstart Emmet Sheehan or a returning Clayton Kershaw — they would be able to give each starter some more rest than members of a traditional, five-man rotation would typically get.
That could be critical for Yamamoto, who got extra days off between starts as a member of Nippon Professional Baseball (NPB) last season. And could be a significant benefit for Paxton himself, who has a long history of injuries.