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Mets Face A Luxury Tax of $101 Million Finishing 4th in MLB

Steve Cohen, New York Mets (Credits: Mary Altaffer)

The New York Mets are facing a record luxury tax bill of nearly $101 million after their fourth-place finish in the NL East, one of eight teams this season to incur this penalty, Major League Baseball confirmed Thursday.

Owner Steve Cohen’s Mets ended the 2023 season with a tax payroll totaling $374.7 million, as reported by The Associated Press, surpassing the previous high of $291.1 million set by the 2015 Los Angeles Dodgers.

The Mets’ hefty tax bill amounts to $100,781,932, reflective of their disappointing season with a 75-87 record. This surpasses the prior record of $43.6 million set by the 2015 Dodgers.

New York managed to save approximately $18 million through mid-season trades that included Max Scherzer, Justin Verlander, David Robertson, and Mark Canha. Their projected tax payroll on June 30 stood at $384 million, and the additional $9.3 million would have resulted in an even higher tax penalty.

The Mets received a tax credit of $2,126,471 under a provision in the latest collective bargaining agreement due to an overpayment involving three players they traded, slightly reducing their final tax liability. Over the past two years, the Mets have accumulated a total luxury tax payment of $131.6 million.

Other teams owing significant tax amounts include San Diego ($39.7 million), the New York Yankees ($32.4 million), the Dodgers ($19.4 million), Philadelphia ($6.98 million), Toronto ($5.5 million), Atlanta ($3.2 million), and World Series champion Texas ($1.8 million). This marks the first time the Blue Jays, Braves, and Rangers have incurred a luxury tax.

Steve Cohen, New York Mets Owner (Credits: Wendell Cruz)

The Yankees and Mets were the only franchises to exceed the fourth luxury tax threshold of $293 million introduced in the 2022 labor contract, often referred to as the Cohen Tax, aimed at curbing spending by Cohen.

This year’s total luxury tax payments amounted to $209.8 million across MLB, more than double the previous record of $78.5 million set in 2022.

The Los Angeles Angels narrowly avoided the luxury tax, finishing $28,654 below the $233 million threshold by the end of the season. They achieved this by allowing several players, including Lucas Giolito and Hunter Renfroe, to be claimed off waivers.

Texas, initially projected at $220.2 million, increased its payroll to $242.1 million by season’s end through key acquisitions including Max Scherzer and Aroldis Chapman.

Total spending on luxury tax payrolls increased by 12.2% to $5.79 billion from the previous high of $5.16 billion in the prior year.

Since the introduction of luxury tax penalties in 2003, the Yankees have been the most taxed team, totaling just under $390 million, representing 43% of the total $901 million in luxury tax paid across MLB. The Dodgers follow with $234 million in luxury tax payments. Fourteen of MLB’s 30 teams have incurred luxury tax penalties over the past two decades.

Luxury tax payrolls are determined based on average annual values, including earned bonuses, for players on 40-man rosters, along with additional allocations for player benefits and pre-arbitration player pools.

Next season, the initial luxury tax threshold will be set at $237 million, with escalating tax rates for those exceeding this threshold, peaking at 110% for amounts exceeding $297 million.

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