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Baseball’s big spenders: Where the money went this offseason

A lot of money was spent leading up to Opening Day, but not all 30 teams were eager to chip in. Here’s how MLB teams chose to spend — or save.
Photo Illustration by Michael Castillo

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What makes Opening Day such an exciting start to the season? It could be that all 30 fan bases can trick themselves into thinking they can seriously compete in 2025. All 30 teams are on a level playing field record-wise, and the games can go in directions on one expects — I mean, who thought that the New York Mets would've made a run to the NLCS last season?

While every fan base is excited for the regular season to get underway, some are more bought-in than others. For example, how can Mets fans not be thrilled? They just made an unlikely run to the NLCS and followed that up with an offseason of the ages, headlined by Juan Soto's arrival.

Overall, 1,098 free agents have signed ahead of Opening Day. $4,741,544,100 was spent overall. The Mets and a select group of other teams spearheaded that spending, making serious efforts to compete in 2024, but other teams took more of a back seat.

Note: All payroll figures are via Spotrac as of 3/20.

Where the money went this offseason

  1. The big picture: Who spent the most?
  2. Position spending trends: Starting pitching is king
  3. The teams that didn’t spend: What’s the plan?
  4. MLB luxury tax: Everything you need to know

The big picture: Who spent the most?

Much of this past offseason's discourse revolved around the Los Angeles Dodgers and their payment structures, but the Dodgers were far from the only team that spent big this past winter. In fact, they weren't even the team that wound up spending the most.

New York Mets: $1.03 billion

You knew they'd be here. The New York Mets made the biggest splash not only this offseason — not only in MLB history, and in professional sports history. Juan Soto signed a 15-year, $765 million deal to ditch the New York Yankees and return to the NL East. To take it a step further, Soto has an opt-out after the fifth year of his deal. If he exercises the opt-out, the Mets can void it by adding another $4 million to his AAV, guaranteeing him a whopping $805 million over the totality of the deal. Soto's deal has a $51 million AAV as is, and that would jump to $53.66 million if he opts out and the Mets void it. Oh yeah, not a single cent of it is deferred, either.

Yes, it's a lot of money. I'd even venture to call it an overpay. However, it's not my money! Steve Cohen, an owner who has had one of the five highest luxury tax payrolls in each of his five seasons running the show in Queens, has proven time and time again that he's willing to spend to win as long as the investments make sense. How many chances will the Mets have to sign a generational 26-year-old who is about to enter his prime and is on a Hall of Fame trajectory?

Cohen showed his willingness to spend before and after coming to terms with Soto, handing out multi-year deals to Frankie Montas, Clay Holmes, Sean Manaea, A.J. Minter, and Pete Alonso, improving the team's roster from top to bottom. The Mets might not be favorites to represent the National League in the World Series, but they've certainly improved from last season's NLCS loss.

Key offseason expenditures:

Player

Position

Contract

Juan Soto

OF

15 years, $765 million
(FA)

Sean Manaea

SP

3 years, $75 million
(FA)

Pete Alonso

1B

2 years, $54 million
(FA)

Clay Holmes

SP

3 years, $38 million
(FA)

Frankie Montas

SP

2 years, $34 million
(FA)

A.J. Minter

RP

2 years, $22 million
(FA)

Soto is obviously the headliner, and he made up for most of New York's offseason expenditures, but he was far from the only player they brought in. The Mets completely revamped their rotation, key contributors Luis Severino and Jose Quintana departed in free agency, replacing them with Clay Holmes and Frankie Montas while re-signing Sean Manaea. The Mets' rotation might not be scary on paper, but combining Kodai Senga's return to full health with Manaea's return, Holmes' upside, and David Peterson's steadiness, the team does have the makings of a solid staff if things break their way.

David Stearns did more than focus on just the rotation, as you can tell from their key additions. After a long offseason of back-and-forth, Pete Alonso re-signed with the only organization he's ever known, giving Soto the protection in the lineup he coveted. Alonso is not Aaron Judge, obviously, but he's a 40+ home run threat that the team can hit behind Soto.

Lastly, the Mets brought former division rival A.J. Minter aboard, giving the team a dynamic left-handed reliever they've lacked for several years. A bullpen featuring the likes of Minter, Ryne Stanek, and Jose Butto setting up for Edwin Diaz has serious potential.

Los Angeles Dodgers: $507 million

On one hand, it's reasonable to expect a big market team like the Los Angeles Dodgers to appear on a list like this. I mean, this same organization spent over $1 billion last offseason and wound up winning the World Series, thanks in large part to those expenditures. On the other hand, though, they just won the World Series. If they didn't make a single move, they would've been favored to win it all again, and yet, they outspent every team other than the Mets. They deserve credit for that.

The Dodgers began what turned out to be a gargantuan offseason by poaching Blake Snell away from their arch-rivals, the San Francisco Giants. In addition to being a two-time Cy Young award winner, Snell has always dominated Los Angeles, as his 2.62 ERA in 14 starts would suggest. Dodgers fans are thrilled to know Snell's remaining prime years will be spent in Dodger Blue.

In addition to signing one of the best starting pitchers on the market, the Dodgers added the two best relievers available, signing Tanner Scott and Kirby Yates to free agency deals. The bullpen was the one area in which it felt as if the Dodgers didn't dominate the rest of the competition on paper. These signings change that in a big way.

The Dodgers spent over half a billion this offseason in free agency and extensions, and yet, managed to get the best value deal by winning the Roki Sasaki sweepstakes. The Dodgers were always the favorites to land Sasaki, and sure enough, they got to add a 23-year-old who could very well win multiple Cy Young awards in the not-too-distant future on a minor league deal. The Dodgers winning and spending as much money as they have in recent years undoubtedly made themselves the premier destination in Sasaki's mind.

The top storyline of the 2025 campaign will be if a team can dethrone the Dodgers, perhaps the most talented team we've ever seen. Most MLB fans will be rooting for it, but as of now, it's tough to pick the field over them.

Key offseason expenditures:

Player

Position

Contract

Blake Snell

SP

5 years, $182 million
(FA)

Tommy Edman

INF/OF

5 years, $74 million (extension)

Tanner Scott

RP

4 years, $72 million
(FA)

Teoscar Hernandez

OF

3 years, $66 million
(FA)

Blake Treinen

RP

2 years, $22 million
(FA)

Michael Conforto

OF

1 year, $17 million
(FA)

Kirby Yates

RP

1 year, $13 million
(FA)

Hyeseong Kim

2B

3 years, $12.5 million
(FA)

What's impressive about the Dodgers offseason spending is that while yes, they obviously spent over $500,000,000, they didn't overpay in most of their moves. Blake Snell was probably a bit of an overpayment, but would anyone be overly shocked if he won his third Cy Young Award in 2025? Any reliever making eight figures annually is certainly paid well, but Tanner Scott is one of the best relievers in the sport — he got what he deserved. The same can be said for Kirby Yates, who somehow didn't even require more than a one-year commitment. Even Teoscar Hernandez came back on what feels like very team-friendly terms.

The Dodgers have spent a ton, but part of how they've been able to build such a juggernaut has to do with some players taking less than they otherwise could have. That includes Shohei Ohtani, by the way, whose contract is worth less than $500 million in present value.

The Dodgers are in a warm-weather city, play their home games in one of the biggest markets in the world, and are set up as well as any other team in professional sports to win sustainably. They're going to be good for a very long time, whether you want them to or not.

Arizona Diamondbacks: $305 million

Much of the offseason was spent by fans complaining about the Dodgers' spending to no end, when the real focus should have been on the smaller market teams not making any effort to compete. The Arizona Diamondbacks could have simply rolled over and given up for the next several years, knowing they're in a division with the Dodgers, but they are proof that smaller market teams can and should try to compete.

The Diamondbacks wound up coming out of nowhere by winning the Corbin Burnes sweepstakes, giving themselves one of the prizes of the offseason. The Diamondbacks also now have one of the premier rotations in the sport, with Burnes being followed by Zac Gallen, Merrill Kelly, Eduardo Rodriguez, and Brandon Pfaadt (with Jordan Montgomery and Ryne Nelson as high-end depth).

I'm not here to tell every small market team to go out and spend $200 million on an ace like Arizona did, but the Diamondbacks doing so proves that these teams can do a whole lot more than they are doing. The Diamondbacks won't be favored to win the NL West, but they're probably the second-best team in that gauntlet of a division, and have a team more than capable of getting to and winning the World Series. They won the NL Pennant in 2023 and are arguably even better now on paper.

Key offseason expenditures:

Player

Position

Contract

Corbin Burnes

SP

6 years, $210 million
(FA)

Geraldo Perdomo

SS

4 years, $45 million (extension)

Zac Gallen

SP

1 year, $13.5 million (arbitration avoided)

Josh Naylor

1B

1 year, $10.9 million
(arbitration avoided)

Another example of the Diamondbacks being a model organization for other smaller market teams comes in the form of the Josh Naylor trade. Arizona lost Christian Walker to the Houston Astros, and it felt like they had acquired Naylor, his replacement, immediately after the Walker news broke. Naylor isn't as good of an all-around player as Walker, and there's concern that this might end up being a rental, but he's also six years younger than Walker and is a player they can afford to pay next offseason or perhaps sooner.

It's risky for a small market team to make a trade for a fairly expensive player entering his final year of club control, but risks are worth taking when you have a chance to win now like the Diamondbacks do.

Burnes was Arizona's offseason centerpiece, but the Naylor acquisition should help them immensely in 2025 (if not beyond), and Geraldo Perdomo's extension will help the team long-term. Perdomo is a steady starter playing a premium position, so getting him locked in on what could end up being team-friendly terms through his 20s is good business.

New York Yankees: $274 million

At the end of the day, the New York Yankees' 16-year, $760 million offer to re-sign Juan Soto wasn't good enough, but that didn't deter Brian Cashman from spending. Just days after Soto made his final decision, the Yankees gave Max Fried a whopping eight-year, $218 million deal. It felt like a bit of a head-scratching decision for the Yankees to prioritize an ace over a big bat after losing Soto, but with Gerrit Cole now out for the year, Cashman certainly made the right decision in that regard, even if Fried was a bit of an overpay.

After signing Fried, the Yankees went for the quantity over quality approach. Essentially, they went out and acquired solid contributors like Devin Williams, Cody Bellinger, and Paul Goldschmidt to fill several holes on their roster instead of going out and splurging on another star. Given how much more well-rounded their roster looks now, it probably was the right move for them to have made.

Yankees fans wish that Cashman did more (it's hard to blame them, considering what the Mets and Dodgers accomplished), but the reality is that the Yankees were among the leaders in money spent this past offseason and will once again have one of the highest payrolls in 2025. Winning a World Series without Cole is going to be incredibly difficult, if not impossible, but prior to that devastating injury, Cashman put them in position to accomplish that task even without the generational Juan Soto.

Key offseason expenditures:

Player

Position

Contract

Max Fried

SP

8 years, $218 million
(FA)

Cody Bellinger

OF/1B

2 years, $47.5 million
(trade)

Paul Goldschmidt

1B

1 year, $12.5 million
(FA)

Devin Williams

RP

1 year, $8.5 million
(arbitration avoided)

As mentioned above, the Yankees went all-out for one player after losing Soto, and that was Max Fried. The Yankees gave him the most money any left-handed pitcher has ever received. Now, especially with Cole out, it's on him to prove he's worth that kind of payday.

Beyond Fried, the Yankees took some short-term risks. Devin Williams is one of the best closers in the game, but how will he bounce back after giving up Milwaukee's season-defining home run to Pete Alonso last season? Paul Goldschmidt was once an MVP winner but is now 37 years old and is coming off his worst season. Cody Bellinger was also once an MVP winner but is coming off a down year. If he bounces back, he'll opt out of his contract and can leave in free agency. If he has another underwhelming year, he'll opt into the final year of his deal, giving the Yankees another contract they'll want no part of. There's some serious boom or bust with several of these Yankees moves.

Regardless of how the moves play out, the Yankees do deserve credit for spending money after losing Soto, even if the fan base expects more. New York is often among the leaders in payroll, and that will be no different in 2025.

San Francisco Giants: $231 million

The San Francisco Giants won three World Series in six years, a little over a decade ago, and have been the definition of mediocre since. In fact, in their nine full seasons since their most recent World Series win, the Giants have gone 732-726 in their 1,458 games. They had a 107-win season in 2021 and lost 98 games in 2017, but for the most part, the Giants have been average. They've finished within four games of .500 in each of the last three seasons.

Given their struggles, the Giants have tried very hard to flip the script, heavily pursuing high-end free agents like Aaron Judge, Shohei Ohtani, and Carlos Correa (to name a few), but for the most part, to no avail. This offseason, they wound up spending a good amount of money to sign players like Willy Adames and Justin Verlander, bolstering their lineup and rotation with those transactions.

Unfortunately, even with a good amount of money attributed to their payroll, it's tough to envision this Giants team going anywhere with Adames as (arguably) their best hitter in an incredibly tough NL West.

Key offseason expenditures:

Player

Position

Contract

Willy Adames

SS

7 years, $182 million
(FA)

Justin Verlander

SP

1 year, $15 million
(FA)

There wasn't much quantity in San Francisco, but the Giants made what turned out to be the second-most expensive offseason expenditure for a position player by signing Willy Adames to a seven-year, $182 million deal. That signing alone made them among the five most aggressive teams this offseason in terms of total dollars spent, at over $230 million.

This was certainly a lot of money to fork over to a 29-year-old who has never even made an All-Star team, but Adames adds a much-needed big bat to their lineup and gives them an outstanding clubhouse presence as well. The Giants have had trouble luring stars; Adames' presence might help them change that.

Position spending trends: Starting pitching is king

As is the case in every sport, some positions are more valuable in Major League Baseball than others. In football, you see quarterbacks get paid the most money because that is the most valuable position. In hockey, the best forward often gets paid the most money. Baseball's most valuable position is undoubtedly starting pitching, based on how those players got paid this past offseason, and it isn't hard to see why that position is king right now.

Innings are at a premium. The pitchers who are able to eat up six or seven innings consistently every fifth day are worth a ton. Max Fried might not have the best stuff in the world, but he has thrown at least 160 innings and has made at least 28 starts in four of the last five full seasons (excluding 2020) while posting a sparkling 3.06 ERA in that span. Given his proven ability to take the ball every fifth day and get results, it isn't hard to see why he was as coveted as he was.

The chart below shows just how valuable starting pitching is on the marketplace compared to other positions.

Note: All contracts are via Spotrac.

Position

Biggest Contract

Total Spent on MLB FA

Catcher

2 years, $13.5 million (Kyle Higashioka)

$64 million

First Baseman

3 years, $60 million (Christian Walker)

$151.5 million

Second Baseman

1 year, $15 million (Gleyber Torres)

$46.9 million

Third Baseman

3 years, $120 million (Alex Bregman)

$131.8 million

Shortstop

7 years, $182 million (Willy Adames)

$226.5 million

Left Field

3 years, $49.5 million (Tyler O'Neill)

$125.1 million

Center Field

1 year, $6.25 million (Harrison Bader)

$9.2 million

Right Field

15 years, $765 million (Juan Soto)

$940.7 million

Designated Hitter

2 years, $37 million (Joc Pederson)

$49.5 million

Starting Pitcher

8 years, $218 million (Max Fried)

$1.29 billion

Relief Pitcher

4 years, $72 million (Tanner Scott)

$337.2 million

Starting pitchers made well over $1 billion this past offseason, with Fried, Corbin Burnes, and Blake Snell as the headliners. The only position that even racked up over $500 million was the right fielders, and Juan Soto's $765 million ate a large portion of that.

Perhaps the most shocking revelation that comes from this chart is that first basemen didn't get much relative to the talent level the position had on the open market. Christian Walker and Pete Alonso are two of the best players at the position, and established veterans like Paul Goldschmidt, Carlos Santana, Josh Bell, and Justin Turner were out there, too. Yet, every first baseman combined wound up signing deals that totaled less than Blake Snell's deal with the Dodgers.

First basemen continue to be valued less by the year, mainly due to the value of defense at that position, or lack thereof. First base is the least valuable position defensively, which will make Vladimir Guerrero Jr.'s upcoming free agency that much more interesting.

The teams that didn’t spend: What’s the plan?

Anyone blaming the Dodgers for "ruining baseball" should instead look at these teams. The Dodgers are doing whatever they can to win games, while several teams are standing idly by and letting Los Angeles take full control. No, not every team can realistically compete with the Dodgers financially, but it's not as if the Dodgers are severely overpaying their players. Being in a smaller market does not excuse teams for not spending at all, which can be said about these five teams below.

Miami Marlins: $21 million

The Miami Marlins made a surprising run to the postseason in 2023 and, to the surprise of very few, collapsed immediately after. What they had done in 2023 was never sustainable, and GM Peter Bendix knew that. When the team got off to the sluggish start that it did, he began shipping off several of the team's core pieces to the point where their roster now is completely unrecognizable.

The Marlins went from having one of the most exciting rotations in the National League and a pesky lineup led by three-time batting champion Luis Arraez to a team that has a decent staff and an atrocious lineup. I mean, outside of Xavier Edwards, is there anyone position player-wise to really be excited about right now?

To make matters worse, Miami continued to blow things up this offseason, trading Jesus Luzardo and Jake Burger, two of the best players on the team. It would've been one thing had Luzardo and Burger been entering the final years of club control, but that's not the case with Luzardo not hitting free agency until after the 2026 campaign, and Burger not even hitting arbitration until after this upcoming season. To take it a step further, I'd argue that the Marlins got fairly underwhelming returns for both players. The Marlins choosing to trade Luzardo and Burger when they did has fans wondering when, not if, the organization's best and most popular player, Sandy Alcantara, will be dealt. Chances are, that's coming very soon.

2024 Record

2025 Luxury Tax Payroll (MLB Rank)

62-100

$61.8 million (30th)

With the team entering a full-blown rebuild, Miami did very little to improve this offseason. In fact, the only players the team signed were Eric Wagenman (one year, $800,000) and Cal Quantrill (one year, $3.5 million). There's a good chance that neither of these players will be in the organization beyond the 2025 campaign, if they even last that long.

The goal in Miami is to rebuild, but that does not excuse them from spending virtually nothing all offseason. Signing current free agents like David Robertson, Kyle Gibson, and Anthony Rizzo to cheap one-year deals can help net Miami additional prospects at the trade deadline, further helping them rebuild for the future. It's easy to see why the Marlins didn't do much, but that doesn't excuse them for not making any effort. Their refusal to spend might end up backfiring in a major way for owner Bruce Sherman.

Colorado Rockies: $27 million

The Colorado Rockies are in as poor a position as any MLB team. They've lost 100+ games in each of the last two seasons, proving that they don't have much going for them at the MLB level. They haven't won 75 games in a single season since 2018. You'd think a team that has struggled mightily for over half a decade would, at the very least, have an exciting farm system, but you'd be mistaken. The Rockies rank 18th on MLB.com's latest rankings, and their top position player prospect, Charlie Condon, just suffered a wrist fracture.

The Rockies have some exciting players on their roster, like Brenton Doyle and Ezequiel Tovar, but this is a team that isn't going anywhere anytime soon, especially given how tough the NL West is and how subpar their farm system is. The Rockies were once willing spenders, and even signed Kris Bryant to a massive deal not too long ago, but they mostly shied away from free agency this past winter.

The only players that the Rockies gave MLB deals to were Scott Alexander, Thairo Estrada, and Kyle Farmer. All three of these players inked cheap one-year deals and it would not be surprising to see one or two of them get released before the end of the regular season.

2024 Record

2025 Luxury Tax Payroll (MLB Rank)

61-101

$130.9 million (21st)

The Rockies lost over 100 games in 2024 and their payroll has dipped by over $40 million after the fact. Colorado's recent refusal to even attempt to be competitive will almost certainly be impacted by attendance numbers at Coors Field. The Rockies ranked seventh in the majors, averaging over 37,000 fans per game at Coors Field in 2018 — the last time they made the postseason. They dipped out of the top 10 for the first time since 2018 in 2023, and ranked 15th, averaging just over 31,000 fans in 2024. It would not be surprising at all to see them in the bottom half of the league.

The Rockies are doing this to themselves, at the end of the day. Their refusal to trade veterans like Ryan McMahon and Kyle Freeland for prospects and enter a full-blown rebuild, combined with their refusal to spend money, makes it really tough to win, especially in a division with the Dodgers. Their plan should be to rebuild the right way, but knowing the Rockies, they're going to continue to confuse their fan base.

St. Louis Cardinals: $28 million

All offseason, all we heard from the St. Louis Cardinals was that they were eager to trade Nolan Arenado. That mindset made a lot of sense for a multitude of reasons. Arenado is owed $74 million over the final three years of his contract, the Cardinals plan on retooling after back-to-back incredibly frustrating seasons, and the veteran's presence prevents some of the organization's young infielders from getting an opportunity to play. It wasn't all John Mozeliak's fault that a deal never materialized, but it was Mozeliak's fault that he seemed to put all of his energy into the Arenado trade.

It got so bad to the point where the Cardinals didn't sign a single player to an MLB contract until mid-March when Phil Maton inked a one-year deal worth $2 million to join the team he grew up rooting for. Their main offseason expenditures revolved around coming to terms with players like Ryan Helsley and JoJo Romero to avoid arbitration and with Lars Nootbaar and Brendan Donovan during arbitration.

2024 Record

2025 Luxury Tax Payroll (MLB Rank)

83-79

$148.9 million (18th)

The Cardinals' payroll isn't as bad as some of the other teams on this list, but they're eager to trim it. There's a good chance they'll be in the bottom 10 by the end of the 2025 campaign, which is not where a team that draws as well as the Cardinals do should be.

As for what their plan is for 2025, your guess is as good as mine. In an ideal world, veterans like Arenado, Helsley, and Steven Matz would be traded sooner rather than later, but there isn't much interest in Arenado and Matz, and based on what the Milwaukee Brewers got for Devin Williams, it's tough to blame the Cardinals for holding onto Helsley.

The roster that the Cardinals have isn't good enough to be a playoff team, but also isn't bad enough to enter a full-on rebuild. Hopefully, young players who should get ample opportunity to play like Masyn Winn, Jordan Walker, Victor Scott II, and Ivan Herrera can take steps forward, giving Cardinals fans something to look forward to.

Chicago White Sox: $33 million

The Chicago White Sox just wrapped up the worst season in modern MLB history, going 41-121, and then proceeded to make little to no effort when it came to improving. In fact, they wound up trading their best player, Garrett Crochet, to the Boston Red Sox over the winter.

With Crochet gone, an argument can legitimately be made that the White Sox will somehow be even worse in 2025. I'm not going to say that the White Sox will win fewer than 40 games, because that'd be legitimately insane, but the White Sox went 9-23 in his starts. In his first 15 outings, the White Sox were 7-8 - they struggled a lot more when Crochet was limited down the stretch.

The conversations of the 2024 White Sox being better than the 2025 White Sox will only get louder when Luis Robert Jr., their best position player, gets traded sometime during the 2025 campaign. Robert will begin the year in Chicago, but assuming he bounces back following a frustrating 2024 season, he'll almost certainly get dealt by the trade deadline.

2024 Record

2025 Luxury Tax Payroll (MLB Rank)

41-121

$70.4 million (29th)

The White Sox have the second-lowest payroll in the majors, with only the Marlins trailing them. Assuming they wind up trading Robert, they could easily end the year with the lowest payroll in the sport. That's right - they finished with the worst record in modern MLB history and are only cutting their budget after the fact.

The White Sox do have an exciting farm system thanks in large part to that Crochet trade and the emergence of Noah Schultz, but in the short term, things are incredibly bleak on the South Side. Jerry Reinsdorf's refusal to spend anything to make this team more watchable only adds to that.

Pittsburgh Pirates: $41 million

All they had to do to be competitive in a very winnable NL Central division was to add position player talent. Unfortunately, owner Bob Nutting seemed more eager to get his hands on a Skenes rookie card than he was to help the Pittsburgh Pirates win games, or even extend the young phenom while he still can.

The best hitter that the Pirates acquired this offseason was Spencer Horwitz, who is unlikely to be ready for Opening Day after undergoing wrist surgery. The most expensive position player signed by Pittsburgh was Andrew McCutchen, who signed a one-year deal worth $5 million. That's right — 38-year-old Andrew McCutchen was their marquee signing.

2024 Record

2025 Luxury Tax Payroll (MLB Rank)

76-86

$100.4 million (26th)

All Pirates fans can do at this point is laugh. The last time that the Pirates ranked outside of the bottom five in luxury tax payroll was in 2017, when they ranked 24th overall. They have a golden opportunity to spend money now with Skenes and Jones making the minimum and Keller on a team-friendly deal, but Nutting refuses to invest in the team.

Pirates fans aren't asking for Juan Soto, but they deserve a legitimate needle-mover, whether that comes in free agency or via trade. The Pirates are in arguably the easiest division in the sport and are set up to win sustainably for the next half-decade. Their refusal to do so is nothing short of embarrassing and makes their plan much less exciting than it should be.

MLB luxury tax: Everything you need to know

One thing that differentiates Major League Baseball from other sports is the fact that it does not have a salary cap. Instead of limiting how much teams can spend, MLB has a luxury tax system in place, incentivizing teams to slow down with spending instead of forcing the issue.

The luxury tax for this season is set at $241 million, according to MLB.com. Penalties for each team that goes over the tax vary based on whether certain teams are repeat offenders and how far over the tax they've gone. Below is a list of the teams currently projected by Spotrac to go over that mark and their total luxury tax bills.

Team

Current Luxury Tax Payroll

Luxury Tax Bill

Los Angeles Dodgers

$378,206,946

$126,327,641

New York Mets

$319,456,449

$61,702,094

Philadelphia Phillies

$298,928,770

$39,432,332

New York Yankees

$281,886,666

$23,242,333

Toronto Blue Jays

$257,450,238

$8,225,119

San Diego Padres

$253,938,678

$6,469,339

As you can see, luxury tax penalties can be substantial, especially for teams like the Dodgers and Mets, who have soared over the highest luxury tax tier. Both of those teams are responsible for a 60 percent surcharge for going $60 million or more over the luxury tax. The Mets are actually paying 110 percent on every additional dollar that they spent, because, in addition to their 60 percent surcharge for going well over the tax, they're paying a 50 percent surcharge for going over the tax for more than their third year in a row. There's a reason Mets fans believe Steve Cohen is the best owner in the league.

The Mets and Dodgers are two of a select group of teams willing to pay hefty sums of money in luxury tax fees, but for many organizations, the luxury tax acts as a hard cap. The Los Angeles Angels, for example, have stayed under the luxury tax for two decades straight. They went over the tax in Arte Moreno's first full season as the team's owner back in 2004, and have remained under since, even with the team spending big money on stars like Mike Trout, Anthony Rendon, and Albert Pujols. Moreno's frugal spending has severely hindered the Angels' ability to win. If they miss the postseason again in 2025 it will be their 11th straight season without appearing in a playoff game, the longest drought in MLB. This is particularly embarrassing for an organization operating out of a big market.

In terms of where the luxury tax money goes, there's more than one place. Eric Fisher of Front Office Sports summed it up pretty well.

"The luxury tax money is divided among several uses, including player benefits and retirement accounts, and a supplemental commissioner’s discretionary fund. That latter fund, in turn, was used in part to help aid teams that have seen their local media rights reduced by ongoing disruption in that industry," Fisher wrote.

A portion of the payments goes directly to the players, but part of it is also up to the commissioner's discretion. Rob Manfred has recently used the money to help smaller market teams that have had their local media rights impacted. In short, the money is used to help players directly and to try and create a bit more competitive balance.

Whether it has worked or not is up to you to decide. On one hand, only six teams, as of this writing, are over the luxury tax threshold, and only two teams are above the fourth tier. On the other hand, though, the Dodgers and Mets, in particular, don't seem to be impacted at all by the luxury tax with how it's set up. Those two organizations are able to do things that other organizations would never fathom. Without an established hard cap, the Mets and Dodgers can spend as much money as they want to, making it hard for other teams to be competitive.

Fortunately, in Major League Baseball, the teams that have the highest payrolls are not guaranteed to win the World Series or even be competitive. The Mets have had one of the five highest payrolls in the sport in each of their five full seasons with Steve Cohen as the owner, and yet, have just two postseason series victories in that span, both of which came in 2024. On the flip side, the Arizona Diamondbacks won the NL Pennant in 2023 with the 19th-highest payroll. A team like the Tampa Bay Rays is almost always competitive with one of the lowest payrolls in the sport.

The luxury tax will always be a hot topic of discussion among baseball fans, especially while teams like the Dodgers and Mets spend with no limitations. I mean, teams like the Marlins and Pirates spend less than Los Angeles and New York spend in tax fees, but games are played on the field for a reason. Teams with low payrolls that are built properly can and are competitive.