Dodgers cut projected tax payroll next year to $181M
NEW YORK — The Los Angeles Dodgers brought their projected 2018 payroll under the $197 million luxury tax threshold with the weekend trade that sent first baseman Adrian Gonzalez, oftinjured starting pitchers Scott Kazmir and Brandon Mccarthy and infielder Charlie Culberson to the Atlanta Braves for outfielder Matt Kemp.
Los Angeles will send Atlanta $4.5 million by May 1 as part of the trade announced Saturday, cutting its 2018 payroll for tax purposes by $25 million to about $181 million while increasing its 2019 payroll by $20 million.
The Dodgers rid themselves of three guaranteed salaries from next year’s tax payroll that totaled $49,554,483: Gonzalez at $22 million, Kazmir at $15,554,483 and Mccarthy at $12 million. Los Angeles acquired Kemp, a $20 million charge, along with the $4.5 million cash transaction.
That leaves Los Angeles with a projected luxury tax payroll that includes $122,969,286 for 10 signed players; an estimated $26 million for eight players eligible for salary arbitration; an estimated $10 million for the rest of its 40-man roster; $14,044,600 for benefits; and $8 million for the two cash transactions involving Kemp, including a $3.5 million charge for the December 2014 trade that sent him to San Diego. Los Angeles must pay the Padres $600,000 on the first of each month from April through August and $500,000 on Sept. 1.
Los Angeles still has room for 2018 additions, such as a deal for free-agent reliever Tom Koehler and inseason acquisitions.
The Dodgers’ 2017 luxury tax payroll was about $250 million with a projected tax of about $34 million, according to Aug. 31 figures compiled by the commissioner’s office. Final calculations are likely to be made this week.
Los Angeles will pay tax for the fifth straight year; because of that, its tax rate next year will be 50 percent of the amount above $197 million plus a 12 percent surtax on the portion above $217 million through $237 million and a 50 percent surtax on the amount over that.
If Los Angeles’ payroll finishes below $197 million in 2018, the Dodgers’ base tax rate would reset to 20 percent on the first $20 million above the 2019 threshold of $206 million. That would put them in a better position going into next year’s offseason, when Bryce Harper and Manny Machado could be free agents.
On a cash basis, the trade was neutral.
Atlanta acquired $47.5 million of 2018 salaries: Gonzalez gets $21.5 million, Kazmir earns $16 million (of which $8 million is deferred to Dec. 15, 2021) and Mccarthy gets $10 million. The Braves immediately designated Gonzalez for assignment and intend to release him.
Los Angeles took on the $43 million owed Kemp, who gets salaries of $21.5 million in each of the next two seasons and is likely to be traded or released. In addition, the Dodgers are sending the Braves the $4.5 million.