The debate for a salary cap in baseball is ongoing. Would setting a limit on how much clubs should spend help or hurt the game we all know and love? Let’s discuss.
Franchises are spending more money than ever before to sign star players, develop their farm systems and compete for championship rings. Some think it’s important for the growth of baseball. Others realize that this prevents smaller clubs from being able to compete. How is Stuart Sternberg’s $800 million supposed to compete with Steve Cohen’s $21.3 billion?
Major League Baseball accounts for the majority of the top contracts in professional sports. Just this offseason, the largest contract in history came from Juan Soto’s record-breaking 15 year, $765 million contract with the New York Mets. Soto’s contract is expected to reach $805 million by 2029, allowing the Mets to void his opt-outs.
If we look toward other sports, their largest contracts do not even scratch the surface in comparison. For the NBA, the biggest contracts are just touching $300 million, while contracts in the NFL do not even reach that. Boston Celtics’ Jayson Tatum currently makes the most in basketball at 5 years, $314 million and most recently in football, Dallas Cowboys’ Dak Prescott agreed to a 4 year, $240 million deal.
So why is it that baseball players are making significantly more than other professional athletes? Well, the NBA and NBA have both implemented salary caps, and maybe MLB commissioner Rob Manfred should take notes.
Powerhouses of MLB
Major League Baseball implemented a luxury or Competitive Balance Tax (CBT) to take the place of a salary cap. The threshold for 2024 was set at $237 million and is expected to be $241 million for the 2025 season. Nine teams went over this limit and paid $311 million in luxury tax last season.
Since the 2023 offseason, the Los Angeles Dodgers have been building a super-team. They surpassed $1 billion after signing just Shohei Ohtani, Yoshinobu Yamamoto, and Tyler Glasnow. Shohei Ohtani’s contract is especially striking, at 10 years, $700 million with $680 million being deferred. This worked out in the Dodgers favor as they were able to take the 2024 World Series trophy back to LA.
This offseason, the Dodgers continue to add to their already stacked roster, as they acquire Blake Snell, Roki Sasaki, Kirby Yates, and more. At first, fans thought they were creating a dynasty, but now it’s becoming excessive.
Currently, the Dodgers have $1.375 billion in deferred money. That’s more than the value of seven franchises: the Marlins, Athletics, Royals, Rays, Reds, Pirates, and the Guardians are all worth less than the amount of deferred money on active Dodgers contracts.
Let that sink in.
The Dodgers aren’t the only team with exceedingly high payrolls. Others among this list include the Philadelphia Phillies, New York Yankees, New York Mets, and Houston Astros. These teams have been dominating the league the past few years, in regards to signing all the hot names on the market and advancing far into the postseason.
In recent offseasons, the Phillies have been freely spending to sign stars, such as Bryce Harper and Trea Turner, to multi-hundred million dollar contracts. Harper holds one of the largest active contracts at 13 years, $330 million. Turner’s contract is significantly large as well, at 11 years, $300 million. The Phillies also added Kyle Schwarber and Nick Castellanos in the same offseason they extended Zack Wheeler and Aaron Nola. They currently have the highest payroll in the MLB.
New York, being a large sports market, has had no problems signing key players. As previously mentioned, the Mets handed Juan Soto the largest contract in professional sports. Aside from Soto, the Mets dealt 10 years, $341 million to Francisco Lindor. Across the East River, the Yankees have also agreed to some large contrats. Including a 9 year, $360 million deal with Aaron Judge in 2023 and a 9 year, $324 million deal with ace Gerrit Cole in 2019.
Small Market Clubs
But what about the small market teams? The Marlins' payroll sits at $42 million, which is lowest in the MLB. The Athletics is just above $50 million. They could not possibly compete with the Yankees’ or Phillies’ $200 million plus payroll. Manfred could also apply a salary floor in order to maintain a balanced and competitive payroll in the league, considering the amount larger markets are spending.
One of the smallest market franchises in recent history is the Athletics, who do not even have a city to call home. The A’s left the Oakland Coliseum after multiple failed attempts to replace it. With fans urging them to sell the team and rumors of moving to Las Vegas, the A’s were forced to stay in California and relocate to Sacramento for the 2025 season. With large market teams (Dodgers and Padres) in their backyard, they will still struggle in years to come.
Ultimately, the CBT is not nearly as effective as a salary cap would be since the tax rate increases if a team exceeds the threshold for multiple consecutive seasons. Many teams’ payrolls are so high that they are essentially paying almost double for each player they sign. Had a salary cap or floor been implemented in the MLB, this would not be the case. A salary cap would allow for a more balanced playing field in the front office of major league clubs and on the diamond.
Edited by Taylor N. Hall
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