Mets rack up record $100M luxury tax bill, Padres, Yankees, Dodgers among eight teams paying CBT, per report

The 2023 competitive balance tax bills are in and the New York Mets have been hit with a record $100.8 million CBT bill, according to the Associated Press. That is by far the largest CBT bill in history, surpassing the $43.6 million paid out by the 2015 Los Angeles Dodgers. New York’s tax bill is based on a record $374.4 million CBT payroll, per MLB’s calculations. 

The Mets shed about $18 million in salary obligations with their deadline trades of Mark Canha, Max Scherzer, Justin Verlander, and others. That saved the club another $8.4 million in CBT. All told, a record eight teams paid CBT this season. The previous record was six CBT payers in 2016 and 2022. Here are the 2023 bills:

1. New York Mets: $100.8 million
2. San Diego Padres: $39.7 million
3. New York Yankees: $32.4 million
4. Los Angeles Dodgers: $19.4 million
5. Philadelphia Phillies: $7.0 million
6. Toronto Blue Jays: $5.5 million
7. Atlanta Braves: $3.2 million
8. Texas Rangers: $1.8 million

The Mets, Padres, and Yankees all missed the playoffs in 2023. The other five clubs reached the postseason, with the Phillies advancing to the Championship Series and the Rangers of course winning the World Series. The eight clubs combined for a $209.8 million CBT bill. That breaks the previous record set last year at $75.8 million.

Thanks to their late-season salary dumping, the Los Angeles Angels squeaked in below the $233 million CBT threshold by $28,654. That is approximately eight days of the minimum salary. By staying under the CBT threshold, the Angels will receive a compensation draft pick before the third round rather than after the fourth round for losing Shohei Ohtani to free agency. That’s about a 70-pick difference.

CBT payrolls are based on the average annual value of player contracts plus miscellaneous expenses, such as each team’s contribution to player benefits and the pre-arbitration bonus pool. Deferred payments, like Ohtani’s, are discounted to the present day value for CBT purposes. The 2024 CBT threshold will rise to $237 million.  

CBT payments are due to the commissioner’s office by Jan. 21. The first $3.5 million of the total CBT pool goes to player benefits and 50% of the remainder goes toward player pensions. The other 50% is redistributed to non-CBT paying clubs that meet certain local revenue criteria.