After signing Kyle Tucker to a four-year, $240 million deal, the Los Angeles Dodgers strengthen their position as the highest-spending team in Major League Baseball (MLB) for the 2026 season. According to updated projections from Spotrac as of January 19, 2026, the team’s Competitive Balance Tax (CBT) payroll is about $413.6 million. This is nearly $170 million above the luxury tax threshold set at $244 million. As a result, the Dodgers are expected to pay around $162 million in luxury tax, bringing the total roster cost (payroll plus tax) to approximately $575.6 million.

Tucker’s contract includes $30 million in deferred payments and a $64 million signing bonus. This gives him an average annual value (AAV) of $57.18 million for CBT purposes, the highest in MLB history. His contract alone accounts for about 23% of the Dodgers’ projected CBT payroll. Because the Dodgers are repeat tax payers (third straight year or more above the threshold), they face a base tax rate of 50%, plus extra surcharges of 12%, 45%, and 60% for spending more than $20 million, $40 million, and $60 million over the limit.

This spending strategy increases the economic gap across the league. The Dodgers’ CBT payroll is almost $96 million higher than that of the second-highest spender, the New York Mets (about $317–318 million), and more than $300 million higher than low-budget teams like the Miami Marlins (around $100–101 million). The Dodgers’ luxury tax payment alone in 2026 ($162 million) is higher than the entire projected payroll of at least 12 teams, including the Marlins, Rays, Guardians, White Sox, Twins, Pirates, Nationals, Cardinals, Rockies, Athletics, Reds, and Brewers.

Compared to other big-spending teams, the Dodgers still hold a clear advantage. Their long-term guaranteed commitments exceed $2.1 billion, nearly $800 million more than the second-place team, the San Diego Padres, at about $1.3 billion. Teams such as the Mets, Phillies, and Blue Jays also pay significant luxury taxes, but none come close to the Dodgers’ level of spending. This limits competition in the free-agent market and changes how talent is acquired across the league.

The luxury tax system redistributes the money collected—expected to reach hundreds of millions of dollars in 2026 from multiple teams—toward player benefits and support for small-market clubs. However, the Dodgers’ financial power, backed by strong revenue from TV deals, attendance, and sponsorships, allows them to absorb these costs while keeping an elite roster. This situation highlights the structural financial differences in MLB, especially as the league enters the final year of the current collective bargaining agreement before possible negotiations in 2027.