Los Angeles Dodgers to face record $169 million luxury tax following back-to-back World Series wins
The Los Angeles Dodgers will pay a record $169.4 million in luxury tax after winning their second consecutive World Series, bringing their total tax bill over two years to $272.4 million.
The New York Mets recorded the second-highest tax payment at $91.6 million, despite missing the 12-team playoffs, raising their four-year total under owner Steve Cohen to $320.3 million. The Dodgers will pay luxury tax for the fifth straight season, surpassing last year’s record of $103 million and overtaking the New York Yankees in total tax paid since the penalty’s 2003 inception, with Los Angeles at $519.4 million and New York at $514.2 million.
The Dodgers’ luxury tax payroll reached $417.3 million, topping the 2023 Mets’ $374.7 million. Their total included $949,244 in noncash compensation for two-way star Shohei Ohtani, covering a suite at Dodger Stadium and interpreter services. The Mets’ $346.7 million payroll included $369,886 in noncash compensation for Juan Soto, covering a luxury suite, premium tickets, and personal security, bringing his record tax salary to $51.8 million.
Other teams paying luxury tax include the Yankees at $61.8 million, Philadelphia $56.1 million, AL champion Toronto $13.6 million, San Diego just under $7 million, Boston and Houston at around $1.5 million, and Texas at roughly $190,000. Nine teams paid, matching the record set last year, and the total $402.6 million exceeded the previous high of $311.3 million. Payments are due to MLB by Jan. 21.
Toronto avoided a higher tax by cutting payroll before the 2024 trade deadline, saving roughly $21 million. Since 2003, 15 teams have been assessed more than $1.63 billion in luxury taxes. The Dodgers, Mets, Yankees, and Phillies have paid for four consecutive seasons, with Philadelphia’s $80.3 million surpassing Boston’s $53.2 million for the fourth-highest total since the tax began.
Teams paying the tax face escalating rates depending on how far their payroll exceeds the threshold, ranging from 50% to 110% for repeat offenders over multiple years. Houston pays 30% over the threshold for the second consecutive year, while Boston, San Diego, and Toronto pay rates between 20% and 62.5% depending on the amount above the threshold.
Luxury tax funds are allocated partly to player benefits, including Individual Retirement Accounts, and a supplemental commissioner’s discretionary fund distributed among revenue-sharing-eligible teams. The initial 2025 threshold is set at $244 million, with the highest tax rate applying to payrolls exceeding $304 million. Regular payroll figures, including 2025 salaries and bonuses, have yet to be finalized.
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