A summary of where the Dodgers stand in 2025 payroll, which will be their fifth straight season paying the competitive balance tax.
Now that the respective five-year contracts for pitcher Blake Snell and infielder/outfielder Tommy Edman are complete, we have a much clearer picture of what the Dodgers payroll will look like in 2025. It confirmed what we already knew — Los Angeles will be in the highest tier of the competitive balance tax for the second year in a row.
Snell signed for $182 million and Edman signed for $66 million. Both contracts have a little more than a third of the salary deferred, which has become fairly standard practice. Those deferrals, once subjected to net present value, reduce the average annual value for competitive balance tax purposes. The figures vary slightly, based on reporting by Ronald Blum at Associated Press plus calculations by Jon Becker at FanGraphs and Jeff Euston at Cot’s Baseball Contracts:
- Snell: $31.4 million per Blum, $31,357,257 per Becker, $31,735,498 per Euston
- Edman: $12.9 million per Blum, $13,040,190 per Becker, $13,276,822 per Euston
For now, I’ll use Becker’s figures for the table below because they are specific and he showed his work, but there isn’t much of a difference in any of them in terms of the bottom line.
At the moment, the Dodgers payroll for 2025 is estimated to be roughly $303.5 million.
Keep in mind, this is before the Dodgers add another outfielder, and they will almost certainly add at least one if not two relievers as well as Clayton Kershaw and maybe even another starting pitcher. That payroll is not going down.
“As long as I’ve been here, going into year 11, the commitment from our ownership group to do everything we can to win has been there time and time again. Last offseason there was a very clear direction, let’s continue with what we’ve built, let’s be aggressive, and that message has continued,” Dodgers president of baseball operations Andrew Friedman said Tuesday. “It’s easy for people to say that, and I think you can go back and look at the demonstrated commitment that our ownership group has made, and is going to continue to make for us to do everything we can to win as many championships as we possibly can.”
The table above contains some assumptions:
- Salary arbitration estimates are an average of MLB Trade Rumors and Cot’s Baseball Contracts.
- There are ten position players and 11 pitchers either under contract or arbitration-eligible; I filled out the rest of the active roster, for now, with players near the minimum salary of $760,000.
- One of those 11 pitchers is Brusdar Graterol, who will start the season on the injured list after shoulder surgery on November 14; Pitchers Gavin Stone, Emmet Sheehan, and River Ryan will also start on the major league IL, so they are included, too.
- Per the collective bargaining agreement, minimum salaries for minor leaguers on the 40-man roster in 2025 are $62,000 for players on their first 40-man roster (like Jack Dreyer) and $123,900 for players with previous 40-man roster experience.
- All 30 teams contribute the same amount to the $50 million pre-arbitration bonus pool, which rewards the top 100 players with between zero and three years of service time, as well as award winners from that group.
- Every team also contributes the same amount for the benefit costs, which include contributing to the players’ benefit fund, workers compensation premiums, payroll and unemployment taxes, spring training allowances, spring training allowances and more. In 2023 this amount (for all teams) was $17,090,029. The 2024 number isn’t out yet (it will come in the next week or two once luxury tax numbers are unveiled), but tends to rise somewhere near $1 million each year.
Way back in January, I wrote about how the Dodgers will be competitive balance tax payers for the next several years, and since then they’ve signed Will Smith, Snell, and Edman to long-term contracts to cement that status.
The septet of Ohtani, Betts, Freeman, Glasnow, Smith, Snell, and Edman will count for a combined $207.4 million in CBT payroll each year through 2027. The current collective bargaining agreement runs through 2026, with the first tax threshold at $241 million in 2025 and $244 million in 2026.
For 2025, the Dodgers are already projected to go over the fourth and highest threshold, which would incur a 110-percent tax on any amount over $301 million, after the $41.4 million in tax for the amount from $241-301 million.
“We do arithmetic, and we understand the cost of everything. We make a determination that makes sense for us,” Dodgers president and CEO Stan Kasten said Tuesday. “From the day we got here, we thought this market and the historical fan base was so strong here that if we do the right things, they will support us. They do support us. They invest in us, in tickets, and merch, and all that stuff. This is us investing in them. It’s a virtuous cycle.”