Friedman: Dodgers Won’t Trade From Roster To Avoid Luxury Tax

The Dodgers have had a quieter offseason than in recent years, limiting their acquisitions primarily to veterans on short-term deals so far. Many had speculated that the club was planning to dip under the competitive balance tax threshold in order to avoid paying the tax for a third year in a row and enter 2024 as a “first-time” payor. If they had any designs on that kind of approach, they largely went out the window when Trevor Bauer’s suspension was reduced, putting $22.5MM back onto their ledger.

That led some people to wonder if the club would then pivot to trading some salaried player to reduce their tax number, but Dodgers president of baseball operations Andrew Friedman has denied that will be a consideration. “No,” Friedman responded to the suggestion, per Fabian Ardaya of The Athletic. “We’re doing all we can to win a championship this year.”

Roster Resource currently calculates the club’s CBT number at $238MM, just $5MM over the $233MM threshold. Trading some salary to dip back under could be theoretically possible, though it would come with challenges. Blake Treinen is a name that has been speculatively floated by some as a candidate for such a trade, given his $8MM salary this year. However, he underwent shoulder surgery in November with an estimated 10-month recovery time. The Dodgers would have to include some kind of prospect to convince any team to take on that kind of money for a guy likely to miss the whole season. Others have floated Chris Taylor as a candidate for a salary-dumping deal, since he’s still owed $45MM over the next three years. But moving him now would be selling low after he had a subpar .221/.304/.373 showing last year. It would also subtract from an outfield that already appears to be somewhat thin. Even if the club did pull off some kind of move to limbo under the line, they would then be handcuffed by what moves they could make during the season, as making a notable deadline deal could get them right back over again.

Though they apparently aren’t going to avoid the tax this year, they have still kept their moves modest this winter. They’ve signed some veterans to one-year deals in Clayton Kershaw, J.D. Martinez, Noah Syndergaard and Shelby Miller, as well as acquiring Miguel Rojas from the Marlins, who has just one year remaining on his deal. Regardless of the financials involved, it seems the club is hoping for their prospect pipeline to feed their big league roster in a significant way this winter, with names like Trea Turner, Cody Bellinger, Justin Turner, Tyler Anderson and Andrew Heaney having departed via free agency.

James Outman has just four big league games under his belt but could potentially get a significant run in the outfield this year. Miguel Vargas has played 18 major league games but could be the club’s everyday second baseman if he’s playing well and Gavin Lux is successful in moving over to shortstop. Infield/outfield prospect Michael Busch has yet to make his debut but reached Triple-A last year and could push himself into the picture. Outfield prospect Andy Pages hasn’t made it to the big leagues yet either but spent all of last year at Double-A and should be on the cusp this season.

The club’s rotation seems in solid shape with Kershaw and Syndergaard joined by Julio Urías, Tony Gonsolin and Dustin May. Of course, pitcher injuries are inevitable and a path will eventually open up for prospects here as well. Ryan Pepiot has already made his major league debut, getting into nine games last year. He’s a bit ahead of Bobby Miller and Gavin Stone, who aren’t on the 40-man yet, though they each reached Triple-A last year and could have roster spots before long.

That tempered offseason means the club is just barely over the CBT line, but they will still be facing a steep tax rate. Since they also paid the tax in 2021 and 2022, they will be considered a third-time payor this year if they stay over. That means they will be paying a 50% tax on all spending over that threshold and that rate jumps to 62% if they eventually get above the $253MM line. Currently, that only amounts to paying about $2.5MM in taxes, but the final tally will depend on how the rest of the year plays out.

Though resetting their tax status doesn’t seem to be in the cards this year, it’s possible that the opportunity will arise again after the upcoming season. Since their additions have been limited to veterans who will reach free agency in November, there’s a decent amount of money coming off the books later this year. Kershaw, Martinez, Syndergaard, Miller, Rojas and Urías are all slated to hit the open market. The club has an option for Treinen for 2024 with the value falling somewhere between $1MM and $7MM based on his health and other factors. Since he’s going to miss most or all of the upcoming season, it will likely be on the cheap end of that spectrum. Then there’s Bauer’s deal, which will be off the books as well since 2022 is the last year of his contract. Max Muncy and Daniel Hudson have club options for 2024, though at reasonable salary numbers that seem likely to be triggered if they’re healthy.

That will give the club plenty of payroll flexibility next year but will also create roster holes. How much work the club has to do next winter will depend on how many of those gaps can be filled internally. The departures of Kershaw and Urias will be a blow to the rotation, but Walker Buehler will return from his August 2022 Tommy John surgery at some point and perhaps one of the prospects grabs hold of a job. Martinez and Rojas will be subtracted from the position player side of things, but maybe one of the youngsters emerges there as well. It will make 2023 an interesting season to watch, both for the season itself and its future implications, which will be followed by an offseason where the top available free agent could be Shohei Ohtani.