After flurry of trades, Blue Jays look to be below the 2024 Luxury Tax threshold

Following a flurry of moves that saw pending free agents Yusei Kikuchi, Justin Turner, Danny Jansen, Kevin Kiermaier, Trevor Richards and Yimi García all traded ahead of this year’s Trade Deadline, along with Isiah Kiner-Falefa and the disappointing Nate Pearson, RosterResource puts the Blue Jays competitive balance (luxury) tax payroll below the $237M threshold for 2024.

They project the revamped Blue Jays luxury tax payroll at $235.4M, below the threshold that would trigger penalties again for the Blue Jays in 2024. Toronto paid a $5.5M luxury tax on their 2023 payroll following a 3rd place finish in AL East last year.

They added 13 prospects from those trades, eight of whom are now included in the Blue Jays top 30 per MLB Pipeline. Southpaw Ryan Yarbrough was also acquired for Kiermaier after he was designated for assignment by the Los Angeles Dodgers on Monday, but he’s only a two month rental before reaching free agency after the season. He’s owed another ~$1.3M this season.

Per Cot’s Contracts, Kiermaier also has bonuses of $150K for 120 days on the active roster, and $100K for 150 days. He was at 115 days as of Tuesday, so did the Blue Jays potentially avoid paying those?

Getting their 2024 CBT payroll below that threshold was a key goal of the front office’s sell-off. Trading IKF, who has another year of control at an AAV of $7.5M, was probably the result of the payroll being right on that “razor’s edge” that general manger Ross Atkins referred to above.

As we’d noted earlier in July, if the Blue Jays were able to get that CBT payroll number under $237M at the Trade Deadline, it would reset their luxury tax penalty. As per MLB, “A team’s Competitive Balance Tax figure is determined using the average annual value of each player's contract on the 40-man roster, plus any additional player benefits. Every team's final CBT figure is calculated at the end of each season.”

If they had remained above the $237M tax threshold at the end of this season, they would have paid a 30% luxury tax on the amount above that threshold given it would have been a 2nd consecutive season above the limit.

It would also mean that if they were a 3rd consecutive payor next season — above the $241M luxury tax threshold in 2025, they would have paid a 50% tax on all overages $20M or less above the threshold, and 62% if they’d exceeded that threshold by $20~40M.

With Toronto able to dip below that threshold for 2024, the penalty level is reset. That means the Blue Jays would only pay a 20% tax on any overages above the 2025 luxury tax threshold, which rises to $241M.

And with close to ~$60M in salary dropping off of Toronto’s Opening Day payroll after this season, they should have some room to sign Vladimir Guerrero Jr. to a lucrative, long term extension as well as to add some top of the market free agent starting pitching and bullpen depth.