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Let’s look at the Dodgers 2024 payroll entering spring training

MLB: Los Angeles Dodgers-Workouts Allan Henry-USA TODAY Sports

Now that workouts have begun at Dodgers spring training at Camelback Ranch, the offseason is officially over. Which means this is a good time to look at the team’s estimated payroll for 2024, after a record-setting spending spree.

The Dodgers added $1.24 billion in future salaries this offseason, the bulk of which is earmarked toward Shohei Ohtani (10 years, $700 million; paid over 20 years) and Yoshinobu Yamamoto (12 years, $325 million; the largest and longest pitcher contract in MLB history). The winter spending ensured that, for the next few seasons at least, it’s not a matter of if the Dodgers will pay the competitive balance tax, but how much tax they will pay.

We haven’t updated our 2024 payroll estimation, and since the last few days saw the Dodgers bring back both Clayton Kershaw and reliever Ryan Brasier, this felt like as good of a time as any to see where things stand.

Kershaw signed for 2024 plus a player option for 2025, a contract that guarantees him $10 million. There are a number of contract bonuses and escalators in the deal, which can bring the total to a maximum of $37.5 million over two years ($12.5 million in 2024, $25 million in 2025), per Ronald Blum at Associated Press.

Player options count as guaranteed payroll years, so Kershaw’s contract is $5 million annually for competitive balance tax purposes. Any bonuses he earns will add to the CBT payroll as well.

Brasier and Kershaw bring the Dodgers to 27 players on guaranteed contracts this season. At the moment, I have the team’s 2024 payroll for CBT purposes at just under $314.7 million.

Dodgers 2024 payroll, at the start of spring training

Player Pos Actual payroll CBT payroll Notes
Player Pos Actual payroll CBT payroll Notes
Shohei Ohtani DH/P $2,000,000 $46,076,769 1st yr of 10-yr deal
Tyler Glasnow SP $25,000,000 $27,312,500 1st yr of 5-yr deal
Yoshinobu Yamamoto SP $55,000,000 $27,083,333 1st yr of 12-yr deal
Mookie Betts 2B/RF $22,000,000 $25,554,824 4th yr of 12-yr deal
Freddie Freeman 1B $20,000,000 $24,699,249 3rd yr of 6-yr deal
Teoscar Hernández OF $15,000,000 $20,433,344 1-year deal
Chris Taylor IF/OF $13,000,000 $15,000,000 3rd yr of 4-yr deal
Max Muncy 3B $12,000,000 $12,000,000 1st yr of 2-yr deal
Manuel Margot OF $10,000,000 $12,000,000 1 yr left + option
Jason Heyward RF $9,000,000 $9,000,000 1-year deal
Will Smith C $8,550,000 $8,550,000 1-year deal
Walker Buehler (IL) SP $8,025,000 $8,025,000 1-year deal
Joe Kelly RHP $8,000,000 $8,000,000 1-year deal
James Paxton SP $7,000,000 $7,000,000 1-year deal
Miguel Rojas IF $5,000,000 $5,500,000 2nd yr of 2-yr deal
Tony Gonsolin (IL) SP $5,400,000 $5,325,000 2nd yr of 2-yr deal
Clayton Kershaw (IL) SP $5,000,000 $5,000,000 1 yr + player option
Ryan Brasier RHP $4,500,000 $4,500,000 2-year deal
Evan Phillips RHP $4,000,000 $4,000,000 1-year deal
Ryan Yarbrough LHP $3,900,000 $3,900,000 1-year deal
Austin Barnes C $3,500,000 $3,500,000 2nd yr of 2-yr deal
Brusdar Graterol RHP $2,700,000 $2,700,000 1-year deal
Dustin May (IL) SP $2,135,000 $2,135,000 1-year deal
Gavin Lux SS $1,225,000 $1,225,000 1-year deal
Blake Treinen RHP $1,000,000 $1,000,000 Option exercised
Alex Vesia LHP $1,000,000 $1,000,000 1-year deal
J.P. Feyereisen RHP $770,000 $770,000 1-year deal
Remaining 4 roster spots $3,200,000 $3,200,000 2024 minimum is $740k
Money from Rays -$2,000,000 -$2,000,000
Minor league salaries $2,500,000 MiLBers on 40-man roster
Pre-arbitration pool $1,666,667 $50m split by 30 teams
Team benefit costs $18,000,000 2023 was $17,090,029
Totals $255,905,000 $314,656,686
May and Gonsolin are already on the injured list; Kershaw, Buehler, and Nick Frasso will be to start the season as well

Before we get into the competitive balance tax implications, let’s look at some of the assumptions in this table.

Trade with the Rays

For players traded in the middle of a multi-year contract during the offseason, the remainder of the contract is recalculated for competitive balance tax purposes. That was the case with Manuel Margot, who was acquired in the four-player Glasnow trade on December 16.

Margot has a $10 million salary this season, plus a $12 million club option in 2025 with a $2 million buyout. For competitive balance tax purposes, that $12 million guaranteed and one guaranteed year. However, the Rays are paying the Dodgers $2 million this year (on August 2), plus another $2 million should they decline his option after the season. But that latter $2 million wouldn’t be paid until December 1, 2026.

From Article XXIII(C)(2)(b)(iii)(A) of the collective bargaining agreement, “Any cash consideration that is included in the Actual Club Payroll of the payor Club shall be subtracted from the Actual Club Payroll of the payee Club in the same Contract Year in which it is added to the payor Club’s Actual Club Payroll.”

Filling out the active roster

Dustin May and Tony Gonsolin were already placed on the 60-day injured list this week. We already know that Walker Buehler will be slow-played this season as he’s on an innings limit after his second Tommy John surgery, so he’ll start the season on the injured list. So will Kershaw, who told reporters Thursday at Camelback Ranch that he might be ready in “July-ish” or “August-ish.” That leaves 23 active players already under contract.

Not listed among the IL-bound is Nick Frasso, who was just added to the 40-man roster in November, the same month he had shoulder surgery to repair a torn labrum. He’ll likely be on the injured list all season, and will earn a major league salary while doing so. The major league minimum in 2024 is $740,000.

There are at least three other players who will be on the 26-man active roster. James Outman and Bobby Miller are roster locks, and Emmet Sheehan is a prime candidate to take Buehler’s spot in the rotation for at least the first few weeks of the season. All three will be making some amount slightly above the minimum salary this season.

Minor league pay for those on 40-man roster

At most, the Dodgers will have 14 players from the 40-man roster on option to the minors at any time during the season. Most of the time it will be less than that, with players on the 10-day or 15-day injured list reducing that number. But for the players on the 40-man roster, their salaries while in the minors still count toward the Dodgers payroll for competitive balance tax purposes.

The players with under three years of service time usually have split contracts that pay them at a different rate while in the majors or minors. For players on a 40-man roster for the first time — for the Dodgers this season, that’s Landon Knack, Hunter Feduccia, and Frasso — the minimum salary while in the minors is $60,300. For others on the 40-man roster, their minimum salary in the minors is $120,600 in 2024.

Ricky Vanasco has yet to make his major league debut, but very well could with the Dodgers this year. They re-signed him to a split contract in November that would pay him $900,000 pro-rated for his time in the majors, and $250,000 pro-rated while in the minors.

J.P. Feyereisen passed three years of service time while on the injured list last season, and avoided salary arbitration in January with a $770,000 contract. Under the collective bargaining agreement, all such contracts are now guaranteed. Feyereisen has two option years remaining, if he’s in the minors this season he’ll still be paid at that major league rate. Same goes for Alex Vesia, who avoided arbitration with a $1 million deal. While it sounds farfetched that Vesia could be in the minors while he’s the top lefty reliever on the 40-man roster, he was optioned twice in 2023, and spent a total of six weeks in Triple-A.

Other assumptions

The pre-arbitration bonus pool started in 2022 as a way to reward high-performing players and award winners with under three years of service time and not yet eligible for salary arbitration. The cost of the total pool of $50 million is split equally, with each team contributing roughly $1.67 million.

Last season, two Dodgers received bonuses paid out of said pool. Outman, who finished third in National League Rookie of the Year voting, earned $580,948, and Miller earned $406,035.

The 30 teams also split equally an annual required contribution to the MLB Players benefit plan, plus other benefit costs, which is counted against competitive balance tax payroll. The 2023 cost for each team here was 17,090,029, per Associated Press.

Competitive balance tax implications

The Dodgers have paid the luxury tax in each of the last three seasons, including $19.4 million last year for a CBT payroll of $268.2 million. As such, they are subject to higher tax rates as a repeat payer.

In 2024, the first competitive balance tax threshold is $237 million, with the Dodgers taxed at a 50-percent rate for the $20 million over that. Then it’s 62 percent for the next $20 million, over $257 million, and 95 percent for the next $20 million, over $277 million. With an estimated CBT payroll already around $314.7 million, the Dodgers are well over the fourth and highest threshold of $297 million.

Dodgers 2024 CBT rates

Payroll Tax rate
Payroll Tax rate
$237-257 million 50%
$257-277 million 62%
$277-297 million 95%
over $297 million 110%

That was informally dubbed the Steve Cohen Tax during collective bargaining agreement negotiations, and the Mets owner has lived up to the moniker. Cohen’s Mets had the highest CBT payroll in 2023 ($374.7 million) and per FanGraphs Roster Resource are currently estimated as the highest payroll in 2024 too, at $327.6 million.

For the first $297 million of Dodgers payroll in 2024, they will pay a total of $41.4 million in competitive balance tax, plus 110 percent of anything over $297 million. At where the Dodgers payroll is currently estimated, they would pay $60.8 million in competitive balance tax.

That adds another layer to the trade of left-hander Caleb Ferguson to the Yankees from last Monday. Ferguson was signed for $2.4 million this season, avoiding his final time through the salary arbitration process. Jettisoning Ferguson not only removed his $2.4 million salary, put also the 110-percent tax on it ($2.64 million), shedding a total of $5.04 million in total cost.

The highest payroll for CBT purposes in Dodgers history came in 2015, at $298.3 million. The $43.7 million paid in luxury tax that year is also a franchise record. Both numbers will almost certainly be surpassed in 2024.