Dodgers’ payroll stuns MLB

$240m Tucker splurge sparks salary cap war

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The Los Angeles Dodgers’ US$240 million signing of Kyle Tucker has reignited calls for Major League Baseball to introduce a salary cap, putting team owners and the players union on a collision course.

Three months after clinching back-to-back World Series championships with victory over the Toronto Blue Jays, the Dodgers signalled they are intent on a three-peat after adding Tucker to an already stacked roster.

Tucker's four-year deal is worth an average $60 million a season, second only to Shohei Ohtani, who joined the Dodgers on a 10-year, $700 million contract in 2023.

The Dodgers also splurged in December by signing former New York Mets pitcher Edwin Diaz to a $69 million three-year deal, making him the highest paid closer in baseball.

The Dodgers’ willingness to flex their financial muscle is allowed under Major League Baseball's financial rules.

Unlike other North American sports, there is no hard salary cap in baseball, meaning teams can spend what they want provided they pay financial penalties under the league’s Competitive Balance Tax (CBT).

The CBT, often referred to as a “luxury tax,’ sets thresholds for total payroll. Teams exceeding the set threshold must pay a financial penalty which is then distributed to player retirement funds and clubs.