#competitive-balance-tax

#competitive-balance-tax

The Yankees missed out on signing pitcher Blake Snell due to competitive balance tax constraints.

Despite missing out on Snell, the Yankees are still in the market for starting pitching, exploring trade options such as Dylan Cease. [ more ]

The Yankees signed Marcus Stroman to a two-year, $37 million deal with an option for a third year to bolster their starting rotation.

Stroman's signing brings the Yankees' Competitive Balance Tax payroll above $300 million for the first time in franchise history. [ more ]

The Yankees have signed Francisco Vilorio, the number 15 international prospect in this year's class.

The Yankees are set to surpass a $300 million competitive balance tax for the first time in franchise history. [ more ]

The Los Angeles Dodgers signed Teoscar Hernández to a one-year, $23.5 million contract, continuing their offseason spending spree.

The signing pushed the Dodgers further over the competitive balance tax threshold, potentially resulting in a 12.5% surcharge on top of the 50% they already pay for spending over the threshold. [ more ]

Shohei Ohtani has signed with the Los Angeles Dodgers for a 10-year, $700 million contract.

Ohtani has agreed to defer the majority of his salary each year to give the team more spending flexibility and help build a strong team. [ more ]

Shohei Ohtani's historic contract with the Los Angeles Dodgers includes deferring $68 million of his annual $70 million salary.

Ohtani's decision to defer the majority of his earnings was motivated by helping the Dodgers sign other players and his lucrative off-the-field endorsements. [ more ]

Shohei Ohtani's contract with the Dodgers has a deferral structure, with a lower salary in the initial years and a higher salary in later years.

The purpose of these deferrals is not to evade the competitive balance tax (CBT) but rather a calculated approach to managing the luxury tax hit on the Dodgers.

The initially reported $70MM average annual value (AAV) was misleading, and the actual AAV is $46MM, which is in line with expectations. [ more ]