MLB Payrolls on the Rise: $100 Million Not a Big Deal Anymore
There was a time and not that long ago, when a $100 million payroll for an MLB team was considered excessive. Times have changed, and now, with more than 20 franchises in the league spending over $100 million a season just to retain their players and staff. Just last year, this number was 15 and in 2012, only nine franchises had that big of a payroll. So, it’s clear that the Major League Baseball is generating more money than ever but the teams are spending more money than ever before.
At the time the season started, at least two franchises had payrolls over $200 million. The Dodgers have a payroll over $270 million, which means it is a realistic assumption that they will be spending more than $300 million in the near future on payroll. Next to follow are the Yankees, whose payroll is around the $220 million mark, but still crazy money when compared to the era when only a kingpin like George Steinbrenner had the power to write checks that big (and his beloved Yankees are keeping the flag flying high in that regard).
The Red Sox are the third biggest spenders, with wages nearing $190 million, so they could be the next to join the $200 million payroll club. Of the 22 franchises with a $100 million plus payroll, the San Diego Padres are the thriftiest, spending just over $100 million. Of the teams below this threshold, the Miami Marlins bring up the rear, spending less than $70 million. Given the payroll differential between the Marlins and the Dodgers (over $200 million), one can safely assume the Marlins aren’t in with much of a chance to win the title (and if they do, it would be one of the biggest MLB upsets ever).
Yet, at the same time, the recent history shows us that spending bucket-loads of cash for retaining talent. Even the commissioner of the league, not too long ago, had stated that at least 80% of the clubs were operating at a loss and that only the teams with deep pockets stood a realistic chance of winning the season. This is juxtaposed by the fact that the Yankees, despite having the second biggest payroll, didn’t make the playoffs last season (and the season before that). On the other hand, the Royals and the Rays made it through despite spending much less.
The fact of the matter remains that until a salary cap is introduced in the MLB, as it has been in virtually every other sport played professionally in the US, the spending of the teams would remain at this level. They are making more money and are willing to spend more. Without the cap, there would be chaos if it hadn’t been for the revenue sharing structure. Plus, there is the debt rule to ensure teams have some incentive to curb their spending.
Yet, despite the massive disparities in the amount of money they spend, the clubs at the top aren’t performing. Though it is still likely that one of the big teams would win, a dominant season is unlikely. Also, the teams at the bottom of the payroll table are making progress. They have been making shrewder investments and their performances are improving season on season. However, their restricted access to the best players on the market means they are less likely to cope with the intense pressure come the business end of the season.
As you can see, $100 million is no longer the exception to the rule. It is fast becoming the rule and in a few years, might even be considered a bargain.