Major League Baseball suffered massive financial losses during the COVID-19 pandemic, cutting player salaries by more than half and only playing a 60-game regular season. Just two years later, baseball is spending more money than ever before.
The salaries for the highest paid players in MLB are skyrocketing, in large part thanks to new TV deals generating billions of dollars in revenue for the sport. Furthermore, the addition of billionaire New York Mets owner Steve Cohen and the upcoming Washington Nationals franchise sale are bringing owners with deeper pockets into positions of power.
It was reflected this winter with some of the top MLB free agents landing record-setting contracts one after another. There are now more $300 million contracts than ever before, with MLB being one of the professional sports that guarantee contracts.
Even before teams reportedly spent nearly $4 billion guaranteed on free agents this offseason, spending was at an all-time high across the league.
Related: 2023 MLB power rankings
According to Front Office Sports, MLB luxury tax payrolls hit $5.2 billion at the conclusion of the 2022 season. It’s a record-setting figure, marking the first time that clubs combined to spend more than $5 billion on players, including salaries, meal allowances, healthcare and pension insurance ($16 million per team).
Importantly, this figure takes into account teams who exceed the sport’s luxury tax threshold and must pay a penalty. MLB set a $230 million payroll threshold before the season, which many of the playoff teams surpassed.
MLB luxury tax penalties
- Los Angeles Dodgers – $32.4 million
- New York Mets – $30.8 million
- San Diego Padres, Philadelphia Phillies, Boston Red Sox, New York Yankees – Undisclosed
While the $5.2 billion tag is the most ever spent in league history, it’s not even half of MLB revenue from the 2022 season.
There are also still a significant number of teams with a payroll under $100 million, with the Oakland Athletics ($56 million), Baltimore Orioles ($75 million), Tampa Bay Rays ($74 million), Pittsburgh Pirates ($76 million) and Cincinnati Reds ($82 million) all projected to have the lowest payrolls in 2023.
As spending gradually increases league-wide with playoff contenders now reaching toward or eclipsing the payroll threshold, we’ll likely see this $5.2 billion figure surpassed at the conclusion of next season and it could become a yearly occurrence.