Phillies Will Pay $7 Million Fine For Violating MLB Luxury Tax
The Associated Press reports that the Phillies formally owe $6.98 million for surpassing MLB‘s Competitive Balance Tax in 2023.
The CBT, sometimes called the luxury tax, will be paid by eight teams. The Mets received the worst punishment ever, with a payment of well about $101 million, smashing the previous record set by the 2015 Dodgers with $43.6 million.
The record number of teams to reach the $233 million first tax threshold was eight:
- Mets: $100.8M over
- Padres: $39.7M
- Yankees: $32.4M
- Dodgers: $19.4M
- Phillies: $6.98M
- Blue Jays: $5.5M
- Braves: $3.2M
- Rangers: $1.8M
Some financial penalties stand out from the others, as you can see. This is so that repeat taxpayers will face stiffer fines, which are divided into four tiers: over $233M, over $253M, over $273M, and over $293M. Nearly $256 million was spent on the Phillies in total.
For the second consecutive year, 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, like Texas, Atlanta, and Toronto, had a tax burden that was comparatively low—less than $7 million. The four clubs split the expense, which was about equivalent to the price of a respectable experienced reliever, between $1.8 million and $6.98 million.
Just around $2.9 million was the Phillies’ tax a year ago. The Mets, who ultimately had a final CBT payroll of $374.7 million after surpassing the maximum tax threshold of $293 million, were taken the hardest. A fee of 60% of each dollar between $293 million and that $374.M amount is also paid by them if they finish more than $60 million over.
Furthermore, the Mets will drop their first-round choice by ten positions in the 2024 draft. In total, MLB‘s eight luxury tax payers brought in little under $210 million. Of that amount, half went to qualified revenue-sharing clubs, while the remaining portion went towards player perks and individual player retirement funds.
Throughout the duration of the present Collective Bargaining Agreement, which ends after 2026, the luxury tax threshold rises annually. $241 million in 2025, $237 million in 2024, and $244 million in 2026 are the amounts.
Although the precise numbers are determined at the end of the season, the Phillies as they now stand are right at the luxury tax threshold for 2024. They still want to bring in a fourth outfielder and at least one more reliever this winter. If they’re in a strong position going into the trade deadline, they may also take on further debt.
The expected payrolls of the Dodgers, Mets, and Yankees are all $40–50 million more than those of the Phillies.
