Does Anyone Even Remember the Luxury Tax Threshold?

(Photo by Jayne Kamin-Oncea/Getty Images)

In the gloomy winter months not long after the smoke settled on the 2018 World Series, management, players and fans of the Dodgers began to re-focus their collective mental energy on yet another upcoming campaign with hopes of capturing a long-elusive championship.

This time would be different, though. More than 30 years have passed, and it was about time the Dodgers rolled the dice and went all-in, regardless of the cost. Besides, this year’s free-agent class was elite. Pundits had been talking about the availability of Bryce Harper for years.

In early November, out of nowhere, came stories that the Los Angeles Dodgers—one of the richest organizations in the MLB—planned on staying under the luxury tax threshold through the year 2022. Apparently, the information came from a report to prospective investors outlining the financial plans of the franchise. The crazy thing was that hardly anyone believed its validity. Little did anybody guess that team management would stick by its guns and hold course through the entire 2019 season.

When the club re-signed ace Clayton Kershaw to a three-year, $93 million contract, the minds of tons of fans were set at ease. It looked like all the rumblings about staying under the cap were hogwash. Riots would have broken out in Los Angeles if Kersh would have signed elsewhere.

Nevertheless, Los Angeles made more headlines when Andrew Friedman and his troops shipped Yasiel Puig, Matt Kemp, Alex Wood and Kyle Farmer out to Cincinnati for two decent prospects and a washed-up veteran pitcher. At that point, everyone in the world thought the Dodgers were making room for something big. Harper?

Yet, there were still those who got the impression the move was a huge salary dump and nothing more.

Harper, of course, went to the Phillies. The Padres signed Manny Machado—not that the Dodgers wanted him back, anyway. Nate Eovaldi elected to go back to the Red Sox while the Nats snatched up lefty starter Patrick Corbin. The pace was picking up. In the meantime, aside from Kershaw, the Dodgers were quiet, at least as far as acquisitions went.

Despite all the cricket-chirping, the team made some noise when it signed fireballer Joe Kelly to a three-year deal a few days before Christmas. Kelly’s numbers had been terribly erratic throughout his entire career, but he was coming off near perfection in the World Series against the Dodgers. Was Kelly a transformed pitcher? Friedman believed so. Nearly $30 million total was spent on Kelly’s signing.

In the final days of January, the team inked injury-prone A.J. Pollock to a four-year deal. Things were beginning to look like the information that was mumbled about the Dodgers staying under the CBT were true. Fans were furious.

Still, the Dodgers got back Kershaw, so not all was lost. Maybe Friedman would be right about Kelly sliding nicely into an eighth-inning role. Perhaps, for the first time in his career, Pollock would stay healthy for an entire season.

There were still the select few fans who thought the Dodgers would blow past the luxury tax threshold and sign righty reliever Craig Kimbrel in June after the MLB draft took place, so they wouldn’t need to sacrifice a draft pick. The team’s relief corps was in shambles (or at least it was thought to be by fans and many members of the media). However, when the Cubs snagged Kimbrel, it looked like the Dodgers would need to wait until the trade deadline to bolster their bullpen.

In the moments before the deadline, Friedman’s moves were reminiscent of his predecessor Ned Colletti—he snagged a group of potential reclamation projects in Adam Kolarek, Jedd Gyorko, Kristopher Negron and Tyler White. There was quite a bit of disappointment among the fanbase, but the Dodgers were controlling their division and the entire National League with ease, mainly because of the production of their mighty offense.

Fast forward to mid-August.

Los Angeles has a 19-1/2 game lead over second place Giants in the NL West. They have been jockeying with the Yankees for the best record in baseball. The excitement of the trade deadline is becoming stale. The rumors from last November of the team staying under the CBT for the next several years have almost become forgotten. More rookies from the Dodgers’ farm have emerged to make huge contributions.

There are still some potential issues surrounding the championship quest of the 2019 Dodgers, but if Friedman and his troops can successfully use some innovation and creativity to maneuver guys like Kenta Maeda, Dustin May, Tony Gonsolin and Ross Stripling into an otherwise questionable bullpen, it could make the Dodgers almost untouchable, at least through the NL portion of the playoffs.

But, if the team suffers another round of bitter disappointment in the 2019 postseason, the club’s intention to stay under the luxury tax for the next several years will once again come to the media forefront, creating anger and fury among fans everywhere who have been waiting an eternity for a World Championship.


11 thoughts on “Does Anyone Even Remember the Luxury Tax Threshold?

  1. Sure, we remember the threshold. I still don’t think it matters that much if we go over it. The Dodgers are loaded. Reset it, then sign whoever you want and slip over it again. They are billionaires, they can afford the taxes. Taxes are necessary to provide top level services. Pay them and enjoy the services. As for Harper, I don’t know that he would fit with this group. He’s a narcissistic sourpuss. Machado looks even worse. I prefer raising our own and paying them, with the occasional free agent signing, especially those that are from around here. Yelich and Arenado, local boys, would be the type of players to go after. Getting them didn’t work out, but if there are anymore like that on the horizon… try again.

    This current team is loaded. So are a couple AL teams. October baseball. We have gotten better at it, but obviously still need to finish the last game with a W. I like our chances this year.

    1. According to what I read, next year is the 3rd year of a 4 year plan to stay under the tax. Their penalty would not be as high if they went over now, but they have some money coming off of the books next year as Bailey, Hill and Ryu’s contracts will be coming off of the books. That’s close to 50 million right there. Other than the pen, I see no real outstanding needs. They have some really talented kids in the system. Kenley can opt out, but considering the way he has pitched and his struggles this year, I do not see that happening. Turner will be a free agent after next year. He will be 35, so I do not see him getting another long term deal in LA. They might bring him back on a Utley type contract, depending on how well he does in his last season of his contract. One cannot expect him to get better at that age. Jansen becomes a free agent after the 2021 season. He actually makes less next year than he is making now, but in 2021 he will be getting 20 million. The active payroll right now is 136 million. They have 45.7 million on the injury list, and 40 million in retained salary. That includes what they are paying to guys who not longer are on the team and they are still owed money by the Dodgers, Kemp, Olivera, Bailey. All of that will be gone next year.

      1. All of that is accurate enough. I read some different earlier numbers at True Blue, but the basics are there. We got below the luxury tax, the seats are filled, tv revenue is robust, the Dodgers franchise continues to grow in value. You may read numbers that show a loss, but we know how the bookkeeping for billionaires go. These pockets are deep. There currently is no real need to add a $300 million contract so it wasn’t done. I doubt it’s done anytime soon either, but you never know.

  2. Thoughtful article. Thank you. These new owners made a statement that resinated strongly. That the Dodgers fans deserved a contending team every year. Dang. A WS is not really the goal. It is to be competitive all year. These past 7 years have been fun! The trade dead line passing was like dodging a bullet. Lux and Bellinger/ Seager and May oh my!

  3. “…it was about time the Dodgers rolled the dice and went all-in, regardless of the cost. ”
    Really? Regardless of the cost? I’m glad you aren’t running the team. The cost, of course, would be prospects. The future of the organization. It would likely be for one year of a championship because you traded a long-term controllable asset for a 3 month rental.
    This Dodger team keeps getting better and appears built to be the class of the Senior Circuit for many, many years. Next year I’m imagining a full year of Will Smith, adding Gavin Lux at 2nd base and the starting pitchers some combination of Buehler, Kershaw, Urias, Stripling, May, Maeda, Gonsolin and maybe they can re-sign Ryu.
    This team will likely be in the World Series, or almost in the WS, for the next ten years. They’ll also win more than their share of them.

    1. Okay, you put Lux at 2nd, where does Muncy go??? Believe it or not there will be some roster adjustments this winter. And damn the cost does not necessarily mean prospects. They could go for a free agent starter or help for the pen which only costs money. They might trade a piece or two. Questions will abound this winter. Do they get help for Jansen and add another closer type. Will they even attempt to re-sign Ryu. What do they do with their outfield surplus. Do they go with the kids, May and Gonsolin and Urias along with CK and Buehler in the rotation? What if Lux flops? It does happen you know. They are not going to just hand the kid the job.You go with an outfield of Verdugo, Bellinger and Pollock and trade Pederson? Move Muncy to first? Turner is going to be 35. Can you count on him to be the everyday 3rd baseman? Do you promote Ruiz to the big club and go with him and Smith as the catchers, or do you keep Ruiz at AAA and sign a veteran catcher to help Smith out? No one can predict how long they will keep up the success they have had the past 6 1/2 years. They have a lot of talent and depth, but injuries, age and not living up to expectations can change everything. There were people last year after the season on some blogs who thought that the Dodgers should trade Bellinger because he has slipped so far his 2nd year. And who is to say that in a year or two, AF gets tired of the pressure of trying to win here every year and decides to go somewhere else. Anything can happen in baseball. That’s why I am not worrying about the Yankees or Astro’s, DC or the Cubs. Right now they have no clue who they are playing in the playoffs. It will most likely be the wild card team, since they are 9 games better than their closest pursuer for best record in the league. That could be any one of at least 7 teams. They will get some idea of how good they are next weekend when they play the Yankees. We all just have to wait and see how it all plays out.

      1. All good questions. Personally I think a lot depends on if they finally win a Championship. If they do, then the kids play. If they don’t, then maybe a couple do, hoping they fix the reason we didn’t.

        Do I put Muncy at first? Already did. Lux at second? Sure. Unless I move Seager out of 6. Lux can play short, though I don’t know how well. Ríos? Yeah. Sure. Maybe.

        Yep, a lot to talk about. But I think John is right about one thing – the future looks very bright. We got money in the bank and cattle on the ranch. Things look very promising in Dodgerland.

      2. I would have to agree with that assessment. They win a championship and letting some seasoned vets walk or be traded. I think they win, and the chances they retain Ryu are slim.

      3. Depending on how Ryu finishes, I think it’s a coin flip they retain him.

        It would appear we have young players ready to step in. Time to jettison a few maybe? Taylor. Hernandez. Barnes. Pederson?

    2. And remember, you can only trade for the rental at the deadline. They did that the last 2 years and not this year. The new roster rules will be in effect next year too. 26 man roster during the regular season and 28 after September 1st.

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