In Major League Baseball, the rich keep getting richer

On Wednesday night, superstar Shohei Ohtani hit a walk-off home run to lift the LA Dodgers past the Atlanta Braves and into the MLB’s all-time record books.

• The Dodgers, who entered Opening Day with the highest title odds in the league’s last 20+ years, are now the first defending champs to ever start the season 8-0.

It’s the latest example of how the gap between MLB spendthrifts and thrifty spenders is growing wider than Michael Strahan’s front teeth, as top teams and players continue to dominate the league’s money conversations.

The payroll chasm

Despite MLB adding a new tier to its luxury tax system in 2022 to reign in big spenders, the LA Dodgers—thanks in large part to a 25-year, ~$8.4B local TV deal—will spend ~$550M dollars on player salaries and luxury tax penalties this year, a record amount. Billionaire investor Steve Cohen’s New York Mets aren’t far behind at $400M+.

Fall down the ladder…and you’ll find the Miami Marlins, with a payroll of ~$70M, while three other teams—the Rays, White Sox, and A’s—all come in under $90M.

Based on a widely used measure of economic inequality known as the Gini coefficient, MLB spending on payroll/luxury tax projects to be the most unequal since at least 1985.

But…While throwing out cash like Stratton Oakmont at an office party can almost guarantee a playoff spot—since 1998, teams with a top-five payroll have averaged 89 wins/season vs. 74/season for the bottom five—it doesn’t appear to correlate to championships.

• Sixteen organizations have won the World Series since 1998, the most of any major American sport.
• There hasn’t been a repeat champion in baseball since the Derek Jeter-led Yankees claimed three straight from 1998 to 2000.

Looking ahead: The current collective bargaining agreement between MLB and its players’ union expires after the 2026 season. And when it does, owners appear poised to push for a salary cap—something the players’ union vehemently opposes, potentially setting up a summer without baseball. In 1994, the last time owners seriously pushed for a cap, the World Series was canceled because the players all went on strike.