If the Los Angeles Dodgers want to make further additions to their roster during the offseason, they'll likely have to pay the competitive balance tax in 2013, as Eric Stephen of True Blue L.A. writes.
Will Dodgers Pay Competitive Balance Tax In 2013?
The collective bargaining agreement requires teams that spend more than $178 million on payroll in any given year be taxed 20 percent for each dollar beyond that threshold.
As Stephen notes, the CBA uses the annual average payout of a contract rather than the actual amount paid within a given year. So while Matt Kemp was paid only $10 million by the Dodgers this year, his salary figure for tax purposes is $20 million annually during his eight-year, $160 million deal.
With all of this in mind, Stephen calculates the projected Dodgers payroll for 2013, including players acquired this year like Adrian Gonzalez, Josh Beckett, Carl Crawford, Hanley Ramirez and Yasiel Puig. He comes out with a total payroll of $178,689,262, so the Dodgers will be almost exactly at the tax threshold.
At the moment, the Dodgers already have a pretty full roster, assuming that Ramirez eventually slides over to third base for Dee Gordon. They’ll still need to add a backup catcher, but Stephen included $1 million in the calculated payroll to cover that expenditure.
When the Dodgers changed ownership last year, everyone wondered whether the team would take its spending to a new level. Considering that the New York Yankees may be the only team in baseball that spends more now, it seems fair to recognize the Dodgers' status as a financial power.
For more on the Dodgers, visit True Blue LA, and stay tuned to Baseball Nation.
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