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Something very odd is happening in Major League Baseball. At the same time payroll inequality is reaching levels not seen in more than a decade and barreling toward the imbalance of the mid-2000s, fewer teams are outright punting on their seasons than in recent years. Whether it's because of talent, spending or a subpar division, 26 of baseball's 30 teams enter Opening Day with genuine playoff aspirations. The two ideas -- massive spending gaps and nearly 90% of the sport eyeing October -- make for strange bedfellows. And yet there's a reasonable explanation for this phenomenon, one that general managers around the game point to when queried about the incongruence: the new collective bargaining agreement. With it came a higher luxury tax threshold, playoff expansion and anti-tanking measures. Low-payroll teams still bemoan their big-spending brethren, but they can take solace in greater opportunity to participate in the postseason, where the randomness of the game often leads to the antithesis of a chalk bracket. This year, it feels truer than ever. Large-market, high-revenue teams still often do everything they can to leverage their advantage. After becoming the first team to reach a $300 million payroll a season ago, the New York Mets are no longer alone going into this season: The Los Angeles Dodgers and New York Yankees also are projected to go well beyond the mark as calculated by the competitive balance tax this season. (CBT payroll, which takes the average annual value of contracts and adds around $17 million paid to players in benefits, differs from the actual cash spent by teams and is typically higher.) In total, a record nine teams this season are projected to spend more than the $237 million threshold that triggers the CBT.
While research on the correlation between payroll and regular-season wins universally agrees that more money spent equals more success, the degree to which that's the case varies. Which leads to the opposite end of the spectrum, where nine teams are set to carry payrolls at least $100 million below the $237 million threshold. At least seven -- Cleveland, Cincinnati, Miami, Detroit, Pittsburgh, Tampa Bay and Baltimore -- can squint their eyes and see a path to contention. This is where playoff expansion resonates. MLB added a pair of spots to its playoff structure in 2022, going from 10 to 12 and offering greater opportunity for the teams that can't -- or opt not to -- compete financially with the big city leviathans. "I wish our payroll was higher, but it doesn't have to be," one general manager for a team below $100 million said. "You've got a 40 percent chance to make the playoffs. It doesn't really seem to matter how good you are in the regular season when you do. The Diamondbacks were the sixth seed [last year], and they made it to the World Series. The Rangers were the fifth seed, and they won the World Series." New guardrails in the CBA serve to promote spending -- or, at very least, keep teams from engaging in the sort of tanking that built recent championship teams in Chicago and Houston. Beyond the implementation of a draft lottery that flattened the odds among the game's worst teams to nab the top pick, the system prevents small-market teams from getting top-six picks for more than two consecutive seasons, forcing them to choose no higher than 10th in the third, regardless of their record. It's even more onerous on teams that pay revenue sharing: They get one lottery pick before an automatic draft-order demotion. How do we interpret what this all means for the game? More teams pushing for the playoffs is a good thing, but, since ESPN's Bradford Doolittle wrote in early February that payroll inequality was trending in the wrong direction, it has gotten worse, with Cody Bellinger, Blake Snell and Matt Chapman all joining teams with $230 million-plus payrolls. The standard deviation of major league payrolls, from a $159 million average, is $71 million, the highest it's ever been. Even so, the inclination to simply secure one of the six spots in each league is a logical driving force in behavior. Each of the past three Octobers, the playoff participant with the worst record in its league has gone to the World Series. The 88-win Atlanta Braves won a championship in 2021. Then the past two years, the 87-win Philadelphia Phillies and the 84-win Arizona Diamondbacks -- neither of whom would have been in the field before postseason expansion -- have lost in the World Series. The Braves and Phillies spent aplenty. The Diamondbacks didn't. All of this has led to a clear stratification in baseball. There are nine big spenders, nine small spenders and a dozen teams in between. Within each of those groups, there are substrata that offer insight into each club's present motivations and how those stimuli dovetail with the rest of the game in 2024. Here are the different groupings entering the new season, with estimated CBT payroll figures for 2024 coming from Jeff Euston of Baseball Prospectus (MLB rank and playoff probability in parentheses).
The financial behemothsNew York Mets: $340.0 million (1st, 24% chance to reach the postseason)
Los Angeles Dodgers: $320.4 million (2nd, 99%)
New York Yankees: $306.7 million (3rd, 76%) Here stand the three teams that have set spending records since the modern version of the luxury tax arrived in 2003. First, it was the Yankees, who, in 2005, guaranteed nearly as much as the second- and third-highest-spending teams combined. They outspent everyone for eight years, at which point the Dodgers took the mantel through 2022. Last year, the Mets blew everyone away, blasting past the $300 million mark, only to see the Dodgers and Yankees join them this season. Even with the Mets' record payroll that, with a luxury tax bill, went well beyond $400 million last season, they didn't make the playoffs. Neither did the Yankees. Only the Dodgers, in recent years known as much for their player development factory as their spending habits, played in October. After rolling out their lowest payroll since 2019 with a $268.2 million CBT number last season, the Dodgers added nearly $50 million to it this offseason in signing Shohei Ohtani and Yoshinobu Yamamoto and trading for Tyler Glasnow.
The CBT payorsAtlanta Braves: $267.5 million (4th, 99%)
Philadelphia Phillies: $260.6 million (5th, 68%)
Houston Astros: $258.8 million (6th, 92%)
San Francisco Giants: $251.9 million (7th, 40%)
Toronto Blue Jays: $247.9 million (8th, 55%)
Texas Rangers: $247.6 million (9th, 54%) Previously, the most teams to exceed the first CBT threshold was eight last year. Before that, in 2022, it was six. In the three seasons since the collective bargaining agreement was signed, the first threshold hasn't served as nearly the impediment players worried it would. Thirty percent of MLB teams this year are at least $10 million above it. The Astros and Giants rejoined the club, though in past years they were barely over, spending less than $10 million each in penalties. Houston rocketed past the second threshold of $257 million, joining the Braves -- whose projected actual payroll is $229.4 million -- and their National League East rival Phillies, who are near the top of the table for the third consecutive season. Toronto and Texas were middle-of-the-pack spenders this winter, lending credence to those who suggest that while the CBT doesn't fit the definition of salary cap, teams are cognizant of it, and its associated taxes may dissuade them from adding players who fit their needs.
The CBT avoidersChicago Cubs: $233.6 million (10th, 49%)
San Diego Padres: $230.1 million (11th, 32%)
St. Louis Cardinals: $212.8 million (12th, 56%)
Boston Red Sox: $206.8 million (13th, 21%) At some point, three of the four teams in this group have surpassed the threshold: the Cubs in their World Series-winning 2016 season as well as 2019; the Padres last year; and the Red Sox 11 times -- but just once in the past five seasons. The Cardinals are habitual shirkers, and this is the first time they're projected to top $200 million in CBT payroll. All four have something else in common, too: They're in the muddled middle talent-wise -- good enough to desire October baseball but unwilling to push themselves financially to ensure a spot. The Cubs and Cardinals play in the second-weakest division in baseball, the NL Central, and still neither was inclined to go beyond $237 million. The Padres cut drastically from last season, shaving $61 million off their CBT number and $80 million from their actual Opening Day payroll. And the Red Sox? Well, their CBT austerity plan has led to $1.2 million in taxes in the most recent half-decade. Chairman Tom Werner's comments before the winter that Boston was planning to go "full throttle" into free agency wound up with $50.75 million in guaranteed money to free agents -- $38.5 million of which went to Lucas Giolito, who underwent season-ending elbow surgery. In what surely must be a coincidence, Boston is projected to finish last in the American League East for the fourth time in five years.
The cusp pushersArizona Diamondbacks: $191.2 million (14th, 51%)
Los Angeles Angels: $188.2 million (15th, 7%) Talk about teams going in opposite directions. The Angels might as well be the Cardinals of the AL. They have gone over the threshold just once, 20 years ago, and paid less than $1 million in taxes. Frankly, the Angels could very easily be in the last group of teams on this list that aren't playoff contenders -- especially with 39 games against the Texas-Houston-Seattle monster in the AL West -- but the return of Mike Trout and efforts to strengthen their bullpen this winter at least illustrated they weren't dismissing the 2024 season entirely. Arizona, on the other hand, spent $136.5 million in free agency this winter and acquired third baseman Eugenio Suarez in a trade. The Diamondbacks enter this season a considerably better on-paper team than the one that embarrassed the 100-win Dodgers before dethroning the then-defending NL champion Phillies en route to the Fall Classic. The Diamondbacks almost certainly won't ever join the CBT payors, but a top-half payroll after far too many years ranked in the 20s suggests progress.
The 159ersMinnesota Twins: $159.8 million (17th, 76%)
Seattle Mariners: $159.1 million (18th, 51%)
Kansas City Royals: $159.0 million (19th, 6%) There are large financial gaps among the subgroups -- and ideological divides within them, too. Just look at the 159ers. They're all in the same place financially, right at the league average for payroll. They're all trying to make the postseason. But they are not all stretching their financial muscles to the best of their abilities. The Twins are far and away the guiltiest of parsimony. Coming off an AL Central championship, Minnesota spent $7.7 million on free agents this winter. Because it is a well-run organization that has graduated significant talent to the major league team in recent seasons, Minnesota may still remain the king of the AL Central. But for all of the teams that have cited the uncertainty in revenue from regional sports networks as an impetus for a lack of spending, there's a team like the Royals, who share that fear but haven't let it get in their way. Next to the Dodgers, who guaranteed well over $1 billion to free agents, the second-highest-spending team this winter was the Royals. They lavished $110 million on free agents and guaranteed star shortstop Bobby Witt Jr. another $288.8 million over 11 years. Certainly they wanted to illustrate their commitment to fans who soon will be voting to keep a tax that funds a new downtown stadium, but they also saw the race to 85 wins in the AL Central as a realistic possibility -- even coming off a 56-106 season. It's hubristic, certainly, especially with an iffy farm system, but in a free agent climate that has seen $1 billion melt off of guarantees across the sport compared to the 2022-23 winter, assertiveness of any sort is worthy of plaudits. That's what made Seattle's winter so frustrating compared to what it could've been. With their fireballing rotation and MVP candidate Julio Rodriguez, they're smack in the middle of a window to win. And what did they do? Follow last year's CBT payroll of $183.3 million with one projected this season 13% lower. It's not the outright cheapness displayed by others to follow; it's simply a lack of recognition by ownership that the Mariners are a player or two away from fielding a genuinely championship-quality team and that wasting such years with miserliness is perhaps the ultimate sin for a baseball owner.
Cheap but tryingCincinnati Reds: $121.3 million (24th, 31%) One offseason of spending does not absolve Reds ownership for wasting too many years on the sideline during free agency. Still, their $110.7 million winter -- the fifth highest in MLB -- warrants an acknowledgment that they're stacking free agents around their awesome young core, the very sort of thing an NL Central team ought to do. Whether they ascend or descend from this category depends on their willingness and ability to extend some of that core. If they try and can't, they may wind up in the next tier, which isn't exactly the worst place to be.
Cheap but really goodTampa Bay Rays: $119.6 million (28th, 54%)
Baltimore Orioles: $114.4 million (29th, 60%) There's a cognitive dissonance with the Rays and Orioles. On one hand, fans want to scream at them to take this incredible foundation and build on it, as if they're a plot of land in Malibu begging for a mansion befitting its view. On the other, it goes back to what the GM said about the correlation between spending and winning earlier. Since 2018, here are the records of the five best teams in MLB: Dodgers: 558-313
Astros: 530-340
Braves: 515-354
Rays: 511-359
Yankees: 509-361 So, that's behemoth, payor, payor, Rays, behemoth. Tampa Bay keeps undeniable company at somewhere between half and a third of the price. It's a staggering run of excellence. And considering the variance of October, screaming from the mountaintops for the Rays to spend runs in direct conflict with the reality that they're far more successful than the majority of the teams that do. The Orioles are on their way to that territory, only they've got an ace in the hole with new owner David Rubenstein, the billionaire set to officially take control of the team any day. Baltimore will be a fascinating test case in the coming years. Will Rubenstein lock up some of the core and accentuate it with complementary pieces, or does he adopt an if-it-ain't-broke-don't-fix-it approach and live in this fantasyland of excellence at a bargain price?
Cheap and should spend moreMilwaukee Brewers: $147.9 million (20th, 25%)
Cleveland Guardians: $131.6 million (22nd, 29%)
Miami Marlins: $121.0 million (25th, 18%)
Detroit Tigers: $120.9 million (26th, 19%)
Pittsburgh Pirates: $119.9 million (27th, 8%) A case could be made for including Milwaukee and Cleveland in the previous category, but the current state of these two Central teams doesn't quite match that of Tampa Bay and Baltimore. The Brewers are entering the season with their weakest roster in years and project to have a lower CBT than each of the previous two seasons even after guaranteeing $72 million in free agency and locking up top prospect Jackson Chourio with an $82 million deal before his major league debut. Compared to Cleveland, the Brewers are downright munificent. Despite their offensive woes, the Guardians' biggest outlay this winter was $4 million for backup catcher Austin Hedges. It was another missed opportunity in a winnable AL Central. Detroit, after the retirement of Miguel Cabrera and departure of Eduardo Rodriguez, is down more than $25 million in CBT payroll. The Marlins, coming off a playoff appearance, have cut back, too. The Pirates are on pace to spend a franchise-record sum and still sport among the bottom-five payrolls across the sport, which doesn't exactly warrant huzzahs and back-pats. Were one to argue the Pirates actually belong in the next category, that may be fair, but with the arrival of No. 1 overall pick Paul Skenes coming soon and geography placing them in an eminently winnable division, starting the season with hopes and dreams is more worthy of encouragement than derision.
The noncontendersColorado Rockies: $167.3 million (16th, 0.1%)
Washington Nationals: $137.3 million (21st, 0.1%)
Chicago White Sox: $121.9 million (23rd, 0.4%)
Oakland Athletics: $80.5 million (30th, 0.2%) Here's how bad these teams are. It's not just the comically misguided spending in Colorado or the comically bad lack of spending in Oakland. Nor is it that the Nationals and White Sox are so far away from their past spending ceilings that pointing it out borders on cruelty. No, it's the cudgel that is the draft lottery. Because the Nationals chose No. 2 overall in last year's draft and pay revenue sharing, they will be picking 10th overall this year. Further, the A's are ineligible for the 2025 lottery because by July they'll have had back-to-back lottery picks. The White Sox are dinged in 2025 as well after winning the No. 5 pick in the upcoming draft and the Rockies will be on the outside of 10th in 2026 if they remain anything close to the mess they were last season, which feels like a likelier outcome than, oh, them usurping the Dodgers or even the Diamondbacks, Giants and Padres. Now the 2024 season is upon us, and even as the payroll gap keeps getting bigger, the number of teams vying to raise the Commissioner's Trophy come October might be deeper than ever.
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