Money doesn’t buy championships, but it certainly helps.
Eight of the past 12 World Series winners have had a Major League Baseball top-10 payroll in the season in which they won. The exceptions: the 2011 St. Louis Cardinals, the 2015 Kansas City Royals, the since-tainted 2017 Houston Astros and the 2021 Atlanta Braves. Of the winners, the Royals are the only one considered a small-market club.
So when the 2022 MLB campaign begins Thursday — a 99-day lockout ended in time to preserve a 162-game season — expectations will be highest for teams at the very top of the payroll standings. They’re a mix of the usual suspects (the Los Angeles Dodgers, Boston Red Sox and Yankees) and a newcomer (the Mets) — all from big markets. It was the teams who were, in many ways, at the center of a conflict that ended nearly three decades of social peace in sport.
The resurgence of the once thrifty Mets has added a new dynamic to the baseball hierarchy in New York and across MLB due to second-year Mets owner Steven A. Cohen’s willingness to spend money, a new luxury tax threshold that was negotiated in the sport’s new labor contract by the 30 club owners of MLB bears his nickname. Meanwhile, still-in-the-game Yankees owner Hal Steinbrenner bristled at the thought that he should follow Cohen.
“I can’t control what resources other owners or other teams have, and what they’re going to do with those resources,” Steinbrenner said last month. “I make the same commitment every year my family does, which is to do everything we can to field a championship-caliber team and try to win a World Series.”
But the Yankees haven’t won a World Series, or even been in one, since 2009. The Mets’ last title was in 1986, but their last trip was in 2015. The Dodgers have appeared in three of the last five, winning in 2020.
Those three clubs, all of which are expected to pay the luxury tax this season, top MLB’s projected payroll rankings heading into Opening Day. According to FanGraphs payroll calculations for luxury tax purposes, the Dodgers ($293 million) lead the pack, followed by the Mets ($287 million) and Yankees ($262 million).
“It’s great for New York fans to have two competitive baseball teams,” Steinbrenner said.
Steinbrenner was one of seven owners on the MLB labor committee that negotiated the new collective bargaining agreement with the players’ union. For months, the parties have argued over the economic basis of sport. One big reason for the tension: MLB is the only major North American men’s professional sports league that doesn’t have a strict salary cap. In the NFL and NBA, revenue is split between team owners and players at a fixed rate.
But in MLB, where player salaries are public but not owner earnings, teams can spend as little as they want. They can also spend as much as they want – as long as they’re willing to pay the competitive balance tax penalties, which are considered a soft cap by some teams and a hard cap by others. The union successfully negotiated the largest luxury tax threshold jump from one labor agreement to the next, with the first threshold rising from $210 million in 2021 to $230 million in 2022. To achieve this, however , the players agreed to a new fourth threshold at $60 million over base.
MLB lockdown is coming to an end
That’s no problem for Cohen.
“Look, $290 million is a lot of money to spend overall and I’m okay with that,” he said last month. “I don’t feel like it’s so confining that I can’t live with it.”
Even before the pandemic affected the sport’s revenue, players had complained about the behavior of teams. Despite record contracts in recent years, overall spending has fallen.
In 2021, the $4.05 billion spent on payrolls was the lowest for a full year since 2015, according to calculations by The Associated Press. Only two teams — the San Diego Padres and the Dodgers — have paid the luxury tax. Nine teams spent $92 million or less on payroll. MLB’s median salary was $1.15 million, down from a record high of $1.65 million in 2015. And the average career length was about four years, with salary arbitration, which offers significant raises, usually starting only after a player has accumulated three years of career. service time.
Those numbers, however, are expected to increase in the current deal, as the parties have agreed to raise the league’s minimum rate, which the majority of players earn, from $570,500 in 2021 to $700,000 in 2022. will also have a $50 million bonus. pool for the best young players who are not yet eligible for arbitration. This offseason, the owners have spent more than $3 billion on new player salaries, breaking the previous winter record, set in 2016.
“MLBPA has always wanted a market-based system,” commissioner Rob Manfred said, referring to the players’ union, the night the new deal was reached last month. “During multiple negotiations, this has been one of their main objectives. Markets produce market results. And I think the changes that have been made to this agreement have moved significantly in their direction on things like the CBT threshold.
During labor negotiations, the owners — who ran a business estimated to be worth $11 billion a year before the pandemic — advocated for ways to cut high-end spending and improve talent or labor sharing. money between the clubs. The players, a more diverse group whose members are not all millionaires, wanted a freer market, better competition between clubs (and therefore more spending), and a spin-off economy led by top clubs.
“The highest spending teams in the market means the system works well. That wasn’t the case here for a long time,” Mets shortstop Francisco Lindor, a senior union committee member, said in Spanish.
He went on to point out that the Bronx team spent less in some years to reset their luxury tax penalty status: “The Yankees also stopped spending for a while. And that means the system wasn’t working the way it was supposed to. We hope that with this new CBA there will be new teams spending and especially those in the big markets.
New teams opened their checkbooks this winter. After keeping their payroll relatively low in recent years, the Texas Rangers have taken on more than half a billion dollars in commitments. They handed shortstop Corey Seager a 10-year, $325 million deal and a seven-year, $175 million deal to second baseman Marcus Semien. The Detroit Tigers and Philadelphia Phillies have joined the Dodgers and Mets in securing more than $200 million in new contracts this winter.
“It’s important to the industry as a whole – and I’ve said this before, so it’s nothing new – no fan should come to spring training thinking their team has no chance. of winning a division, no chance of qualifying for the playoffs,” Steinbrenner mentioned. “It can only be bad for the industry as a whole, so I have supported competitive balance and measures to try to address it, even in this agreement.”
But some clubs don’t seem ready to compete for the playoffs, which have been reduced from 10 to 12 teams. Some – even those in big markets (the Oakland Athletics) or those receiving revenue sharing from others (the Pittsburgh Pirates) – are rebuilding and losing players and salaries. The growing gap between the teams that spend the least and those that spend the most has people like Lindor concerned.
Case in point: Lindor’s teammate Max Scherzer, who will earn $43.3 million this season after signing with the Mets, is expected to earn more than the estimated opening day payrolls of the following teams, according to Cot’s Baseball Contracts: the Baltimore Orioles, the Athletics and the Pirates. The Cleveland Guardians are not far ahead of Scherzer, with a projected payroll of $52 million. Lindor singled them all out and compared them to the Mets payroll.
“It’s $200 million difference, and you haven’t seen it before,” said Lindor, who was traded by Cleveland to the Mets before last season and then signed a 10-year, $341 million extension. dollars to stay. He added: “When teams win, they make money. They say they don’t make a lot of money, but they generate a lot. The industry continues to grow.
At one point in labor negotiations, MLB proposed a $100 million salary floor — which would have been a first for the sport — in addition to a lower luxury tax threshold of $180 million, which included higher rates for overruns. Some players were open to the idea of setting a minimum for team payrolls, but were uncomfortable with the more onerous cap that comes with it.
Despite a draft lottery, which was created to keep teams from losing on purpose in hopes of getting the top pick, Michael LeRoy, a professor and athletic work expert at the University of Illinois at Urbana-Champaign, said baseball is “always a sport that is going to suffer from acute inequality in spending on quality players. He pointed to the small market teams in the NFL that were vying for the playoffs.
“Teams that want to hang out will keep hanging out,” he continued. “And that will impact the overall economics of the sport. I think finance, management can live with that. And they also have enough freedom to allow the Dodgers and the Yankees and anybody who wants to come out and really compete on the free agency market to do it and pay the tax. So I think it’s more or less the same with a higher threshold. And I also think the money will be spread evenly among middle players in opening that cap, so you’ll have fewer players below a million dollars.