New York Mets hit with record luxury tax of nearly $101 million for season of fourth-place finish

The New York Mets face an unprecedented luxury tax bill of almost $101 million following their fourth-place finish in the NL East during the 2023 season. Owner Steve Cohen’s Mets boasted a record tax payroll of $374.7 million, surpassing the previous high set by the 2015 Los Angeles Dodgers.

Despite a mid-season selloff, shedding notable players like Max Scherzer, Justin Verlander, David Robertson, and Mark Canha, the Mets’ tax liability soared to $100,781,932, more than double the prior record.

The Mets managed to trim about $18 million through their strategic trades, yet their projected tax payroll on June 30 was $384 million, signaling a potential $8.4 million higher tax bill. Notably, the Mets benefited from a $2,126,471 tax credit under the latest collective bargaining agreement. Their two-year tax total now stands at a staggering $131.6 million.

Joining the Mets in facing the luxury tax penalties are San Diego ($39.7 million), the New York Yankees ($32.4 million), the Dodgers ($19.4 million), Philadelphia ($6.98 million), Toronto ($5.5 million), Atlanta ($3.2 million), and World Series champions Texas ($1.8 million). Remarkably, the Yankees and Mets were the only teams surpassing the $293 million threshold, introduced as the “Cohen Tax” in the 2022 labor contract to curb extravagant spending.

The total luxury tax spending surged to $5.79 billion, a 12.2% increase from the previous year. The Yankees, consistently incurring taxes since 2003, lead the league with just under $390 million in penalties, followed by the Dodgers at $234 million. Notably, 14 of the 30 teams have faced luxury tax obligations over the past two decades.

As teams prepare for the 2024 season, the initial luxury tax threshold is set at $237 million. Should the Mets, Yankees, Dodgers, Padres, or Phillies surpass this limit, they would be subject to the highest tax rate, reaching 110% for any amount exceeding $297 million. The financial landscape of Major League Baseball continues to evolve, with escalating luxury tax figures shaping the dynamics of team spending.