The Los Angeles , who are baseball’s reigning champions for two consecutive years, are set to pay a historic $169.4 million in competitive balance tax (CBT) for the 2025 season, according to the Associated Press. This tax amount is based on a CBT payroll of $417.3 million, likely the highest in the history of baseball, making the ‘ 2025 roster the most costly ever assembled.
The CBT threshold for 2025 was set at $241 million, with tax rates escalating the more a team exceeds this limit, especially for those repeatedly paying the tax. The , as repeat offenders, faced the steepest tax rate, incurring a 110% tax on any payroll exceeding $301 million—a threshold commonly referred to as the “Steve Cohen tax,” named after the Mets owner.
CBT calculations use the average annual value of a player’s contract rather than the player’s actual salary for that year. Kotz Baseball Contracts estimates that the ‘ actual cash payroll in 2025 will be around $347 million. Combining the payroll with the CBT payment of $169.4 million, the will be spending roughly $516.4 million on their 2025 championship-winning squad.
In total, nine teams will pay CBT this season, tying a record. These teams and their respective tax payments are:
– : $417.3 million payroll, $169.4 million CBT
– Mets: $346.7 million payroll, $91.6 million CBT
– Yankees: $319.5 million payroll, $61.8 million CBT
– Phillies: $314.3 million payroll, $56.1 million CBT
– Blue Jays: $286.1 million payroll, $13.6 million CBT
– Padres: $270.4 million payroll, $7.0 million CBT
– Red Sox: $248.9 million payroll, $1.5 million CBT
– Astros: $246.0 million payroll, $1.5 million CBT
– Rangers: $241.4 million payroll, $190,483 CBT
Altogether, these teams contributed nearly $403 million in CBT, with the first $3.5 million designated for player benefits. Half of the remaining tax money will be allocated to players’ retirement funds, and the other half will be distributed among teams not paying CBT, based on factors like local revenue growth, as decided by MLB Commissioner Rob Manfred.
The already paid $103 million in CBT for the 2024 season, setting the previous record. The 2023 Mets are the only team besides them to have paid nine-figure CBT, paying $100 million that year. Prior to 2023, no team had paid more than $43.6 million in CBT during a single season, but this figure has now been surpassed eight times from 2023 to 2025.
As the face this enormous tax bill, their manager Dave Roberts has expressed support for implementing a salary cap, while emphasizing the need for a minimum salary floor to ensure even lower-paid players benefit from increased spending. MLB and its owners are expected to revisit the salary cap issue when the current collective bargaining agreement expires in December next year.
Fan Take: This record-breaking competitive balance tax highlights the growing financial disparities in MLB and the challenges of maintaining competitive balance. For fans, it signals potential shifts in how teams build rosters and how the league might regulate spending to ensure a fairer, more exciting competition in the future.
