Now that the 2024 MLB season is done, calculations were released regarding which teams officially went over the competitive balance tax (CBT) threshold. The 2024 season was a record-breaker. Nine teams, most in league history, went over the $237MM marker and must may a tax on their overages. Headling the nine were the Mets, and the two teams that face each other in the World Series: the Dodgers and Yankees.
| Team | CBT Payroll | 2024 Tax Payment |
|---|---|---|
| Dodgers | $353,015,360 | $103,016,896 |
| Mets | $347,650,554 | $97,115,609 |
| Yankees | $316,192,828 | $62,512,111 |
| Phillies | $264,314,134 | $14,351,954 |
| Braves | $276,144,038 | $14,026,496 |
| Rangers | $268,445,491 | $10,807,106 |
| Astros | $264,759,503 | $6,483,041 |
| Giants | $249,108,939 | $2,421,788 |
| Cubs | $239,851,546 | $570,309 |
The Dodgers, Mets, and Yankees were the most-taxed teams in baseball. Not only were the trio taxed at a rate of 50% for going over three straight seasons, all three also went over the $237MM limit by over $60MM. That triggered an additional 60% tax.
That latter point will also have an effect on the 2025 MLB Draft. Teams that go over the threshold by $40MM or more have their highest pick moved down 10 spots. The only expection would be that pick fell within the top-six.
For the Dodgers, Los Angeles (NL) will likely gladly take the penalty. The Dodgers won the 2024 World Series, thanks in large part to significant offseason investments into Shohei Ohtani, Yoshinobu Yamamoto, and Teoscar Hernandez. Los Angeles spent over $1.2B last winter in total deals.
The Yankees also went significantly over thanks to the offseason acquisition of Juan Soto. Soto made $31MM in his final arbitration-eligible season, before he
the largest contract in MLB history.
Atlanta and Texas, meanwhile, were over for the second-straight season. Both teams made significant additions to their teams over the last two seasons. The Rangers signed Jacob deGrom and Nathan Eovaldi in the 2022-23 offseason to a core that already included Marcus Semien and Corey Seager. Eovaldi re-signed with Texas in early December.
The Braves have continued to maintain a high payroll, thanks to the additions of Matt Olson and Sean Murphy, plus Chris Sale, over the last three years. Those two teams were hit with a 30% tax rate.
Houston, San Francisco, and the Cubs were offenders for the first consecutive season. The Astros added reliever Josh Hader last winter, while the Giants signed Jorge Soler, Matt Chapman, and Blake Snell. Chicago (NL) won the sweepstakes for Shota Imanaga in January 2024.
The trio were given a 20% hit.
The CBT payroll limit will go up in 2025, to $241MM. Should any of the nine teams above go under that limit, their penalties will reset and would only get charged as first consecutive offenders when going over again. As of now, quite a few of those teams won’t be going under.
As for 2025, the three teams — the Dodgers, Phillies, Yankees — are already over the $241MM tax threshold, per Spotrac. The Mets are virtually guaranteed to go over once other contracts for next season are sorted out, while the Padres may also go over.
Per MLB.com, the CBT is determined by the average annual value (AAV) of each player’s contract on the 40-man roster, plus any additional benefits.
ESPN first reported the news of nine teams going over the CBT limit.