Los Angeles Dodgers Hit With a Historic Luxury Tax Bill
Nobody throws a parade for a tax bill. But if you’re the Los Angeles Dodgers, you might just throw a parade because of the tax bill.
Fresh off their back-to-back World Series victory, the invoice from the league office has finally arrived, and the numbers are absolutely staggering. We aren’t talking about a slap on the wrist here. We are talking about a GDP-sized check. The Dodgers have officially been hit with a record-smashing $169.4 million competitive balance tax (CBT) bill for the 2025 season.
To put that into perspective? That check is just the penalty. It doesn’t include the actual salaries. When you combine the payroll with the tax, the Dodgers spent over half a billion dollars, $586.7 million to be exact, to hoist that trophy.
The Dodgers Luxury Tax Is Bigger Than Your Team’s Payroll
Here is where the math gets funny, or tragic, depending on which jersey you wear. That $169.4 million tax bill is larger than the entire active payroll of 12 Major League Baseball teams.
While franchises like the Marlins and White Sox were scraping by with payrolls under $92 million, the Dodgers were spending nearly double that amount just in fines to the league office. It creates a picture of a league that is essentially operating in two different stratospheres. You have the Dodgers, the Mets, who racked up a $91.6 million tax bill of their own, and the Yankees. Then, you have everyone else.
The roster that Los Angeles assembled is essentially an All-Star team that plays 162 games together. When you have Shohei Ohtani, Mookie Betts, Freddie Freeman, and a rotation that costs more than some small nations, you expect to win. But paying a tax bill that exceeds the cost of the entire Milwaukee Brewers roster? That is a flex of comical proportions.
A Salary Cap War Is Brewing
The irony of this spending spree wasn’t lost on anyone when Dodgers Manager Dave Roberts recently hinted at being in favor of a salary cap. It feels a bit like a guy winning the lottery and immediately suggesting we ban gambling.
The “Steve Cohen Tax,” the highest tier of the luxury tax meant to curb runaway spending, was supposed to act as a soft cap. Clearly, it hasn’t worked. The Dodgers blew past that threshold at 100 miles per hour and didn’t check the rearview mirror. With nearly $400 million already committed for next season, don’t expect them to slow down.
As we head toward the expiration of the collective bargaining agreement in 2026, the Dodgers have essentially drawn a line in the sand. They have proven that if you have the revenue, thanks to a massive TV deal and the global marketing power of stars like Ohtani, the luxury tax is just the cost of doing business.
For fans in Los Angeles, nobody cares about the billionaire’s bank account; they care about the rings. But for the rest of the league, this record-breaking bill is just more fuel for the fire. The rich got richer, the trophy stayed in L.A., and the check cleared.
