The Angels’ final luxury tax calculations placed the team slightly under the $233M threshold, according to The Athletic’s Ken Rosenthal. As a result, the Halos will both avoid paying any tax money and ensure that they will receive a higher compensatory draft pick should Shohei Ohtani depart in free agency. If Ohtani signs elsewhere, the Angels’ pick will fall after the second round of the 2024 draft, whereas the pick would’ve come after the fourth round as part of the penalties attached to teams who exceed the Competitive Balance Tax threshold.
This represents a difference of roughly 55-60 spots in the draft order for the Angels, which is no small matter even if a compensatory pick is a relatively thin silver lining for losing a generational talent like Ohtani. Staying under the tax line also means, however, that Los Angeles would face less of a penalty if it signs another free agent who rejected a qualifying offer. Signing such a player will now cost the Halos $500K in international bonus pool money and their second-highest pick in the 2024 draft, whereas if they had exceeded the CBT threshold, the Angels would’ve had to give up $1M in international pool money and their second- and fifth-highest selections in the 2024 draft.
Since owner Arte Moreno has made a point of bringing big-name free agents to Anaheim, it wouldn’t be a surprise if the Halos responded to the possible loss of Ohtani by trying to obtain another star. It also can’t be ruled out that Ohtani might stay with the Angels after all, even if the expectation is that the AL MVP will depart for a team that can offer him a better chance at winning than the perennially disappointing Angels.
In avoiding a tax penalty, the Angels continue their streak of staying under the CBT threshold in every season since 2004, which was Moreno’s first full year as the club’s owner. As much as Moreno has been willing to splurge on big contracts, it has been clear that he has viewed the tax threshold as an unofficial salary cap, with this past season being the one exception. As part of a final push to retain Ohtani and finally end the Angels’ string of losing seasons, the club was aggressive throughout the summer in adding pieces to atone for injury losses, until a disastrous run in August ended their playoff hopes.
L.A. then pivoted by placing a big chunk of their roster on the waiver wire just before the Sept. 1 deadline for postseason eligibility, hoping that contenders in need of reinforcements would make some claims and bring the Angels some salary relief. Given the specifics of the dollar figures and the narrow margin of error the Angels were working with, it wasn’t quite clear until today whether or not Los Angeles had gotten under the tax line or not, but it appears as though the team’s efforts weren’t for naught.