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Trevor Bauer contract pushes Dodgers into upper echelon of competitive balance tax

A look at where the Dodgers 2021 payroll stands after Bauer’s reported contract

Divisional Series - Washington Nationals v Los Angeles Dodgers - Game One Photo by Harry How/Getty Images

The Dodgers got their man, and after seeing the contract you can see why Trevor Bauer said in his announcement video, “I can’t wait, Dodgers fans.”

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.

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

Pos Player 2021 CBT
Pos Player 2021 CBT
C Will Smith $600,000
1B Max Muncy $8,666,667
2B Gavin Lux $600,000
3B Edwin Ríos $600,000
SS Corey Seager $13,750,000
LF A.J. Pollock $12,000,000
CF Cody Bellinger $16,100,000
RF Mookie Betts $25,554,824
IF/OF Chris Taylor $6,700,000
C Austin Barnes $1,750,000
1B/OF Matt Beaty $600,000
IF/OF Zach McKinstry $600,000
C Keibert Ruiz $600,000
SP Clayton Kershaw $31,000,000
SP Trevor Bauer $34,000,000
SP Walker Buehler $3,725,000
SP David Price $31,000,000
SP Julio Urías $3,600,000
CL Kenley Jansen $16,000,000
RHP Blake Treinen $8,750,000
RHP Corey Knebel $5,250,000
RHP Brusdar Graterol $600,000
RHP Joe Kelly $8,333,333
LHP Victor Gonzalez $600,000
LHP Scott Alexander $1,000,000
RHP Dylan Floro $975,000
60-IL Tommy Kahnle $2,375,000
60-IL Caleb Ferguson $600,000
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
Italics = estimated MLB minimum salary is $570,500 in 2021

(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.