Three MLB Teams Pay Bulk of Record $311M in Luxury Taxes
Major League Baseball’s luxury tax hit a historic high for the 2024 season, with three teams from the league’s largest markets—the Los Angeles Dodgers, New York Mets, and New York Yankees—shouldering over 84% of the $311.31 million assessed across the league.
Top Taxpayers
- Los Angeles Dodgers: $103 million
- New York Mets: $97.1 million
- New York Yankees: $62.5 million
The total luxury tax amount surpasses the previous record of $237 million set in 2023, with a record-breaking nine teams exceeding the competitive balance tax threshold in 2024.
Other Teams Owing Taxes
In addition to the big three, six other teams are set to pay luxury taxes:
- Philadelphia Phillies: $14.3 million
- Atlanta Braves: $14 million
- Texas Rangers: $10.8 million
- Houston Astros: $6.5 million
- San Francisco Giants: $2.4 million
- Chicago Cubs: $600,000
All teams have until January 21 to pay their bills.
Dodgers Lead Spending
The Dodgers topped the luxury tax list following an offseason spending spree:
- Shohei Ohtani: Signed to a record-breaking 10-year, $700 million contract after earning NL MVP honors.
- Yoshinobu Yamamoto: Added to the roster with a 12-year, $325 million deal.
Mets and Yankees Follow Close Behind
- The Mets, already second on the tax list, are poised for an even larger tax burden in 2025 after signing Juan Soto to a massive 15-year, $765 million contract.
- The Yankees, consistently among the top payroll spenders, remain a perennial luxury tax contributor.
Luxury Tax System Explained
The luxury tax, officially termed the competitive balance tax, is assessed on teams whose payroll exceeds a predetermined threshold.
- For the 2024 season, the threshold was set at $237 million, increasing to $241 million in 2025.
- The tax rate escalates for teams that exceed the threshold in consecutive seasons, further penalizing heavy spenders.
This year’s record-breaking luxury tax underscores the growing financial arms race among MLB’s wealthiest franchises as they strive for dominance on and off the field. The implications of these tax bills will likely influence team strategies for seasons to come.
