If the acquisition of Adrian Gonzalez five years ago marked the beginning of the most extravagant era in Dodgers history, his departure last week signaled its end. The Dodgers have paid a record amount in luxury taxes the past five years, nearly $150 million. They will spend again, but not like they have in recent seasons. The 110th page of baseball’s collective bargaining agreement explains why: Any team with a payroll that exceeds the designated “second surcharge threshold” will not only pay a heavy monetary fine, but will also have its top pick in the amateur draft moved back 10 places. Considering how the Dodgers have preached the importance of a robust player-development system, this is a penalty they will do everything to avoid. Limiting their payroll for the upcoming season under the $197-million base luxury threshold will increase their financial flexibility — they will initially be spared the penalties applied to repeat offenders of competitive balance regulations — but there is a ceiling to how much they will be able to spend in the future as well. The second surcharge threshold will be $246 million in 2019. Go over that and a team’s draft position will be compromised. The limit will increase by only $2 million in each of the next two seasons. This isn’t a salary cap, but it’s close. Generally speaking, owners don’t like paying luxury taxes and the Dodgers paid $36.2 million in taxes this past season, which was more than double any other team. Also, baseball operations departments don’t like compromising their top draft picks.
A $300-million team? Don't expect the Dodgers to have a payroll like that again
Los Angeles Times | Dec 20