NEW YORK, N.Y. – The Los Angeles Dodgers have ended the New York Yankees’ 15-year streak as Major League Baseball’s biggest spenders and owe more than $26.6 million in luxury tax.
The Dodgers finished with a record payroll of $257,283,410, according to final calculations made by Major League Baseball on Friday and obtained by The Associated Press. That is more than $20 million above the previous high, set by the Yankees last year.
For the first time since the current luxury tax began in 2003, the Yankees won’t be paying the most. The luxury tax was put in place as a slowdown on spending by high-revenue teams, and teams pay based on the amount they are over the $189 million threshold.
The Dodgers owe $26,621,125 based on a $277.7 million payroll for purposes of the tax, which calculates payroll based on the average annual value of contracts for players on the 40-man roster and includes benefits. That raises the team’s two-year total to $38 million.
Los Angeles, which flopped out of this year’s playoffs in the division round and is seeking its first World Series title since 1988, pays the tax at a 30 per cent rate because it has gone over the threshold for the second straight year. The Dodgers’ rate would increase to 40 per cent if they go over in 2015, which is likely.
The Yankees cut their payroll and owe $18.3 million in tax, down from $28.1 million for 2013. New York originally hoped to get under the threshold but wound up more than $36 million over. The Yankees have gone over every year, totalling nearly $271 million. New York pays at a 50 per cent rate, the highest called for in baseball’s collective bargaining agreement.
Checks to the commissioner’s office are due by Jan. 21. Tax money is used to fund player benefits and MLB’s Industry Growth Fund.
Four teams wound up less than $10 million under the threshold: Detroit ($187 million), Philadelphia and Boston ($186 million each), and the Los Angeles Angels and World Series champion San Francisco ($180 million apiece).
Three of baseball’s five-biggest spenders missed the playoffs this year, with the Yankees joined by Philadelphia and Boston. Among the 10 playoff teams, three were in the bottom half by payroll: AL champion Kansas City was 19th, Oakland 23rd and Pittsburgh 27th.
The Mets’ regular payroll of $92.9 million was the team’s lowest since $93.1 million in 2001 and $82.2 million in 2000.
MLB calculated the average salary at $3,692,123, up 11 per cent from 2013 for the steepest increase since 2001. The players’ association has not yet released its final 2014 average.