Dodgers Penalties In 2023 MLB Draft Due To Exceeding Luxury Tax Threshold

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The Los Angeles Dodgers had a competitive balance tax payroll of $293,330,382 during the 2022 season, which was more than $60 million above the first threshold. As a result, the club was hit with a luxury tax bill of $32.4 million.

Along with the monetary penalty, the Dodgers’ first pick in the 2023 MLB Draft was moved back 10 spots. They were originally supposed to choose at No. 26 overall but now won’t make their first pick until 36th.

The Dodgers also had their first selection in last year’s draft moved back 10 spots after exceeding the second luxury tax threshold during the 2021 season. They didn’t make their initial pick until No. 40 overall, which was used on University of Louisville catcher Dalton Rushing.

While moving back 10 spots is far from ideal, the Dodgers did gain compensatory draft picks after the fourth round for losing Tyler Anderson and Trea Turner in free agency. Those selections will be Nos. 135 and 136 overall.

Anderson and Turner rejected the $19.65 million qualifying offer for the 2023 season before going on to sign with the Los Angeles Angels and Philadelphia Phillies, respectively.

Had the Dodgers stayed under the luxury tax threshold last season, their compensatory picks would have come after the first round of the 2023 MLB Draft.

Dodgers on track to exceed luxury tax threshold in 2023 season

The Dodgers have had a quiet offseason in terms of player acquisition and it has been assumed they are trying to reset the luxury tax penalties by staying under the $233 million threshold for 2023.

However, that will be difficult in the wake of Trevor Bauer’s suspension being reduced. Even before their trade for Miguel Rojas, L.A. reportedly had already exceeded the initial $233 million luxury tax threshold for the 2023.

Should the Dodgers payroll finish above the $233 million CBT line in 2023, they face an increased tax rate of 50% for the first threshold, then 62.5%, 95% and 110% on the second, third and fourth thresholds, respectively.

The team technically has until the end of the 2023 season to get below the line, but president of baseball operations Andrew Friedman denied it being a requirement.

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