The Associated Press reports that the Phillies formally owe $6.98 million for surpassing MLB’s Competitive Balance Tax in 2023.
Known as the luxury tax, eight teams will be required to pay the CBT.
The Mets received the harshest punishment ever, with a payment of well under $101 million, smashing the previous record set by the 2015 Dodgers with $43.6 million.
The record number of teams to surpass the $233 million first tax threshold was eight:
• Mets: nearly $100.8 million
Padres: $39.7 million; Yankees: $32.4 million; Dodgers: $19.4 million; Phillies: $6.98 million; Blue Jays: $5.5 million; Braves: $3.2 million; Rangers: $1.8 million
As you can see, certain financial penalties differ greatly from one another. This is because repeat taxpayers face harsher fines at four different levels: over $233 million, over $253 million, over $273 million, and over $293 million. The Phillies earned almost $256 million in total.
For the second year running, the Phillies, Mets, and Yankees paid more in taxes than the first-timers—the Blue Jays, Braves, and Rangers—who pay 20%. The Phillies, Mets, and Yankees pay 30% on their overages.
The Phillies’ less than $7 million tax burden was comparatively low, similar to that of Texas, Atlanta, and Toronto. Between $1.8M to $6.98M, or around the price of a respectable senior reliever, were spent by the four teams.
The Phillies’ tax last year was little less than $2.9 million.
The Mets were severely hit, with a final CBT payroll of $374.7 million after surpassing the maximum tax threshold of $293 million. They also pay a tax of 60% of each dollar between $293 million and the $374.M amount if they end more than $60 million over.
The Mets’ 2024 first-round draft selection will also be shifted back ten spots.
MLB received little less than $210 million in total from its eight luxury tax payers. Half of the money raised will be given to qualified revenue-sharing teams, while the remaining portion will go toward player benefits and individual player retirement funds.
The present Collective Bargaining Agreement, which ends after 2026, raises the luxury tax threshold each year. $237 million, $241 million, and $244 million are the amounts for 2024, 2025, and 2026.
Though the precise numbers are determined at the end of the season, the Phillies as they now stand are right at the luxury tax level for 2024. They still intend to bring in a fourth outfielder and at least one more reliever this winter. If they find themselves in a strong position come trade deadline, they may also be willing to take on further debt.
The expected payrolls of the Dodgers, Mets, and Yankees are all $40–50 million more than that of the Phillies.