Surpassing the competitive balance tax threshold in 2021 was punitive not just in the tax the Dodgers paid, which was $32.65 million. By reaching the third surcharge tier ($40 million above the base threshold, which meant at least $250 million last year) with a $285.6 million payroll, the Dodgers will also see their first pick in the 2022 draft drop by 10 slots.
The Dodgers were slated to pick 30th overall based on inverse order of record (plus the Mets getting a compensatory pick at No. 11 overall for failing to sign Kumar Rocker last year), but now that pick will be No. 40.
For Corey Seager signing with the Rangers, the Dodgers receive a compensatory draft pick directly after the fourth round. Had the Dodgers not paid the luxury tax last year, their compensation pick for Seager would have instead come after Competitive Balance Round B, which is just after the second round.
For signing Freeman, the Dodgers forfeit their second-highest and fifth-highest selections in the 2022 draft, as well as see their bonus pool for the next international signing period reduced by $1 million. Had the Dodgers not paid the luxury tax in 2022, they would have only forfeited the second-highest draft pick and saw its international bonus pool reduced by $500,000. This is where the Dodgers were at last offseason, when they signed Trevor Bauer and lost their second-round pick.
The wording is important here, in that the penalty for signing a qualified offer free agent doesn’t specify “second round” or “fifth round” pick. From the collective bargaining agreement, Article XX(B)(4)(c)(ii)(A):
Determining a Club’s Highest Available Draft Selections. With the exception of draft selections forfeited by the Club pursuant to Major League Rule 3(c)(4)(B), all of a Club’s draft selections will be counted in determining the Club’s second-highest, third-highest or fifth-highest available selections, including compensatory selections awarded pursuant to sub- section 4(b) above and selections awarded pursuant to Major League Rules 4(c)(2), 4(k)(1) or 4(k)(2) (or acquired via an assignment).
In other words, all picks count here. The pick the Dodgers receive for Seager, which comes just after the fourth round, is the team’s fifth-highest pick, and will thus be one of the two draft picks forfeited for signing Freeman.
The exact draft selection numbers won’t be finalized until Michael Conforto, the last of the unsigned qualifying offer free agents, picks a team for 2022. But here’s a rough look at how the Dodgers draft is affected.
Dodgers 2022 draft
- First round: 40th overall (dropped 10 spots)
Second round: forfeited (Freeman)
- Third round: normal
- Fourth round: normal
Compensatory pick (Seager): forfeited (Freeman)
- Fifth through 20th round: normal
As an estimate, that second-round pick will likely be around No. 66 overall. The pick after the fourth round would be something like No. 134. Slot values will rise in this year’s draft, but looking at last year’s slots the 66th pick had a value of $1,003,300 and No. 132 was $418,200. Dropping from the 30th pick ($2,365,500) to 40th ($1,856.700) is another $508,800 in slot value.
That’s a total loss of $1,930,300 in slot value with the three picks affected, based on 2021 numbers.