MLB Luxury Tax Will Reach $311 Million This Season
The Major League Baseball offseason has kept things interesting and exciting thus far as the loaded free agent class of players are signing with new teams regularly.
Juan Soto was the free agent headliner this offseason, and he signed a contract with the New York Mets worth $765 million over 15 years.
The dollar amount of the contracts in the MLB has continuously gone up as Soto’s contract is $65 million higher than the previous high of $700 million by Shohei Ohtani last season.
With these crazy contract amounts comes a unique penalty called the luxury tax.
According to USA Today’s Bob Nightengale on ‘X,’ an MLB record $311.305 in luxury tax penalties will be assessed this year, which is more than $100 million more than a year ago.
There's an MLB record $311.305 million in luxury tax penalties this year, more than $100 million more than a year ago, by nine teams that eclipsed the luxury tax.
Dodgers: $103.016M
Mets: $97.116M
Yankees: $62.512M
Phillies: $14.351M
Atlanta: $14.026M
Rangers:$10.807M
Astros:…— Bob Nightengale (@BNightengale) December 20, 2024
The definition for the luxury tax, otherwise known as competitive balance tax, is that when a club exceeds a predetermined payroll amount, then they are subject to the tax.
With the size of the contracts reaching new highs, the luxury tax amount is also increasing.
Nightengale identifies the teams that eclipsed the luxury tax, and one noticeable relation is that most of the teams are big market teams.
The top three teams with the highest luxury tax are the Los Angeles Dodgers, the Mets, and the New York Yankees, which are three of the biggest market teams in the MLB.
It will be interesting if Soto’s contract is matched or beaten next offseason, but it is hard to imagine it will be.
Nonetheless, MLB fans get some more exciting baseball due to teams having the ability to load up their roster.
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