Blue Jays Believed To Have Gotten Under Luxury Tax Threshold

According to a report from Shi Davidi of Sportsnet, the Blue Jays are thought to have gotten their 2024 player payroll below the first competitive balance tax threshold of $237MM. However, that will not be confirmed until later this offseason when the commissioner’s office calculates each team’s final payroll and formally announces which clubs will have to pay luxury tax penalties for the 2024 season.

The Blue Jays came into the season with a luxury tax payroll approximately $11MM above the first threshold, but they shaved some money off the books by trading several players ahead of the deadline. It’s also worth keeping in mind that publicly available payroll estimates are exactly that – estimates.

According to the estimates at RosterResource, 10 teams (including the Blue Jays) are in line to pay the luxury tax this January. The Mets, Dodgers, Yankees, Braves, Phillies, Astros, Giants, and Rangers are certain to be penalized, while the Blue Jays and Cubs are close enough that they could potentially slip under the $237MM threshold in the final calculations. RosterResource has Toronto’s final 2024 luxury tax payroll at $240.4MM and Chicago’s at $238.4MM. While neither the Blue Jays nor the Cubs would have to pay a particularly high penalty for their modest overages (if they do in fact go over), the Blue Jays, in particular, could benefit from resetting their penalties. They paid the luxury tax for the first time in franchise history last season. Luxury tax penalties increase when a team goes over the first threshold for a second consecutive season and increase again when a team goes over for a third consecutive season. Unless the Blue Jays are confidently planning to decrease payroll this winter, it would make a big difference if they could reset their penalties this year. After all, a 30% tax on a few million dollars in overages wouldn’t be that big of a deal for Toronto, but the potential for a 50% tax (the penalty for a third-time offender) next year and beyond could significantly hamper offseason spending.

What’s more, if the Blue Jays get under the luxury tax threshold, they would only lose their second-highest draft pick (and not their second and fifth-highest picks) if they sign a free agent who received the qualifying offer this winter. Similarly, they would only lose $500K of international bonus pool money rather than $1MM. Perennial high-spenders, like the World Series champion Dodgers, understand that it’s worth losing a few draft picks and some international bonus pool money in order to sign the best major league players and field the most competitive major league team. However, one can understand why the Blue Jays, who finished 74-88 in 2024 and would likely only be a few million over the luxury tax threshold (if they went over at all), would prefer not to be so harshly penalized.

There is no reason to believe the Blue Jays are entering a rebuilding or retooling phase after their disappointing 2024 season. Instead, it seems more likely they will try to contend once again in their final season of team control over Vladimir Guerrero Jr. and Bo Bichette. As they attempt to do so, it would certainly help if they don’t have to be quite so concerned about signing a QO free agent or bringing next year’s payroll above the first luxury tax threshold ($241MM in 2025). Davidi notes that team president Mark Shapiro doesn’t see the team’s payroll “either growing or decreasing in a big way,” but that still leaves for the team to sign at least one QO free agent and possibly eclipse the first tier of the CBT. RosterResource estimates that Toronto’s luxury tax payroll for 2025 is currently $211.2MM, approximately $29.2MM lower than this past year’s estimated total.