Bauer’s contract is three years, $102 million, per multiple reports. The $34 million average annual value trails Gerrit Cole ($36 million) and Stephen Strasburg ($35 million), but given how front-loaded the deal is, Bauer will be the highest-paid player in the sport in each of the next two seasons.
Trevor Bauer gets $102M for 3 years from Dodgers, per source. He has opt outs after each of the first two years; $40M in 2021, $45M in 2022. He'll be the highest-paid player in MLB history in '21, then again in '22. Good job by @AgentRachelLuba & Jon Fetterolf of @zssports_law.— Mark Feinsand (@Feinsand) February 5, 2021
Trevor Bauer's three-year deal with the Dodgers is for $102 million guaranteed -- and for $40 million in 2021 and $45 million in 2022. He can opt out after each year, meaning he'll make $40M if he opts out this year, $85M if he does so after 2022 and $102M if he stays all three.— Jeff Passan (@JeffPassan) February 5, 2021
Bauer deal with Dodgers, per @Feinsand: $102M for three years, with opt outs after first and second year. Salaries: $40M in first year, $45M in second.— Ken Rosenthal (@Ken_Rosenthal) February 5, 2021
Bauer has flexibility in the form of two reported opt-outs, one after the 2021 season, and another after 2022.
For the Dodgers, this pushes them into the competitive balance tax stratosphere even before they decide who plays third base for them. With Bauer there are 19 Dodgers under contract for 2021, including Walker Buehler and Austin Barnes, who have salary arbitration hearings pending this month. Counting the midpoint of Buehler and Barnes’ exchanged figures, plus assumptions for filling out the 26-man roster, the Dodgers payroll for competitive balance tax purposes is roughly $238.5 million.
2021 Dodgers competitive balance tax payroll estimate
|Money to Twins (Maeda)||$563,500|
|Money from Red Sox (Price)||-$16,000,000|
|Minors (on 40-man)||$2,500,000|
|Team benefit costs||$15,500,000|
|Total CBT payroll||$238,493,324|
(Don’t get caught up in the positions here. I just filled out the roster given what’s available at the moment.)
The CBT threshold this season is $210 million. The Dodgers as “first-time payers,” having not paid competitive balance tax since 2017, though they would have gone over the threshold last year had David Price not opted out of the season.
They are taxed at 20 percent of the first $20 million over $210 million. For the next $20 million over $230 million, the Dodgers would pay 32 percent. Anything over $250 million would be taxed at 62.5 percent, and the Dodgers would see their first draft pick in 2022 drop 10 slots.
If they stay at the current $238.5 million, without adding anyone else, that would incur a tax of $6.72 million ($4 million for the first $20 million over, then $2.72 million for the amount above $230 million). But given likely additions either before or during the season, plus some achievable performances bonuses, it could go even higher (if they don’t trade others away).
This puts the Dodgers back into a perch atop MLB in payroll, where they stood from 2013-17, the first five years of the Guggenheim Partners ownership group. For those years they averaged a $264 million payroll and paid $150 million in competitive balance tax.
The Dodgers will need to make another 40-man roster move to officially add Bauer, and likely for eventually adding Justin Turner or some other third baseman as well. Perhaps those roster-clearing moves will shed some payroll, but it’s clear the Dodgers’ payroll will be massive in 2021.
For the players, at least. The Dodgers were one of a number of major league teams to lay off several employees this offseason. “The ongoing economic crisis, however, forces us to make difficult personnel decisions throughout the organization, going forward for the 2021 season,” the team said in November. “This is a heartbreaking decision. This year, more than ever, we are truly grateful for the role each member of our Dodgers family plays in our success.”
Those affected members of the “Dodgers family” will have to watch from afar now.