What is the difference between the World Series favourite Los Angeles Dodgers and the tied-for-last-place in the National League East Miami Marlins? It turns out, about $406 million.
The Marlins head to Chavez Ravine Monday to kick off a three-game set against the Dodgers, for a matchup of what is considered to be the largest payroll gap in modern MLB history.
The Dodgers will dole out $325.9 million in salary this season — as calculated by MLB’s labour relations department — resulting in an estimated competitive balance tax bill of over $150 million, bringing their grand total to $476 million.
A stark contrast to the $69.1 million in guaranteed money Miami has committed to its roster.
The series is a perfect depiction of the vast disparity in financial might that exists between the big-market clubs at the top of baseball’s financial scale and those at the bottom, whose lack of resources (or unwillingness to use them) necessitate a drastically different approach to team building.
To get a better idea of how much this gap has grown and just how large it has become, we’ll take a by-the-numbers look at MLB’s biggest spenders in contrast with its most frugal clubs.
Major League Baseball first attempted to address the growing divide between the highest and lowest spending franchises by instituting the Commissioner’s Blue Ribbon Panel on Baseball Economics after the 1999 season.
The stated goal of the panel was to come out with a report examining “the question of whether baseball’s current economic system has created a problem of competitive imbalance in the game.”
At the time, the New York Yankees paced the majors with an $88.1 million payroll, 72.9 million more than the last placed Florida Marlins at $15.2 million.
Fast forward to the present day, and it’s clear that despite modifications to MLB’s collective bargaining agreement over the years in an attempt to create more competitive balance, this gulf has only grown.
First implemented in 2003, the competitive balance tax thresholds mean that big-budget teams have to pay for exceeding a predetermined payroll threshold. There are also additional surcharge thresholds and increasing penalties for each consecutive year a team exceeds the tax line.
Yet, this has done little to deter baseball’s high-rollers from pushing the envelope each successive season, with Steve Cohen’s New York Mets and Mark Walter’s Dodgers exceeding the superfluous spending seen by the Yankees through the 2000s and 2010s.
With the measures in place having done little to change results, commissioner Rob Manfred has publicly addressed MLB’s “massive disparity problem” with both the New York Times and discussed the possibility of a salary cap on FS1’s “The Herd.”
While national and local media revenue make up a large portion of an MLB team’s cash flow, research from Sportico done in 2024 indicated that ticket sales were still the leading revenue stream at 31 per cent.
There is a strong correlation between spending and ticket sales, particularly when it comes to the bottom end of the spectrum, with the Athletics finishing last in both categories for three straight seasons.
Meanwhile, at the other end, the Dodgers have led in ticket sales and have been top five in payroll for five consecutive years. (Omitting the 2020 COVID-19-affected season, as there were no ticket sales).
Data provided by MLB attendance reports
So far this season, the Dodgers are pacing MLB in ticket sales yet again at a staggering average attendance of 52,174 per game. The Marlins sit 28th with 12,027 and have recorded eight games with four-digit crowds.
The best way to fill seats is by fielding a competitive product for fans to enjoy. So, will spending a fortune on personnel guarantee success and a return on investment?
As evidenced by the Dodgers, Yankees and Mets, and the Athletics, Pirates and Marlins, there appears to be a relationship between spending a lot of money on players, filling seats in the ballpark and winning games.
However, there are exceptions. The Tampa Bay Rays stand out as a modern example of a team that has eschewed this trend, finishing bottom 10 in payroll in each of the last five years while accumulating 419 wins, fourth-most in the majors, and a World Series appearance.
The 2023 Mets shattered baseball’s previous payroll record and proceeded to flounder, leading to them offloading the expiring deals of future Hall of Famers Max Scherzer and Justin Verlander at the trade deadline.
But these big market behemoths aren’t leaving anything to chance. A losing season and missed playoff opportunity despite a gargantuan payroll certainly didn’t discourage the Mets from shelling out $765 million over 15 years to Juan Soto this past summer for the largest contract in sports history.
The Dodgers gave out $450 million in guaranteed money this past off-season, causing even Hal Steinbrenner to remark that it’s “difficult” to keep up with them.
At the same time, the Marlins are primed to potentially trade away one-third of their MLB low $69.1 million payroll if they opt to deal starter Sandy Alcántara ahead of this season’s trade deadline.
Doing so would only continue to widen the ever-growing chasm between baseball’s highest and lowest spenders.
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