Analyzing MLB Team Payrolls (2019)

MLB Team Payrolls

Given Major League Baseball’s status as the only major American sports league without a salary cap, I’m always interested in seeing how teams choose to allocate their resources every year. There’s a lot that plays into how much any given team will spend on their roster, depending on everything from how badly a team is looking to compete, the proportion of their production coming from young players vs older players, how their local cable TV deals are looking, and how much of a dip each team takes in that season’s free agent market.

While some trends seem to always hold true (the Yankees and Red Sox pace big-market team spending, the Rays penny-pinching at any opportunity), it’s interesting to observe the things each season that change as teams make moves and add/cut payroll to fit their GM’s vision. A few notes from looking at this season’s projected payrolls:

  • The Dodgers' spending has really come down over the last seasons after reaching over $300M in the 2015 season. There was a lot of speculation over the past season that they had sought to sign either Machado or Harper in free agency - contracts that would have added another $30M each to their payroll this season. However, with those players taking their talents elsewhere, the Dodgers are looking at their lowest team payroll since 2012
  • The Red Sox, Cubs, and Yankees are the only teams already above this season’s Luxury Tax Threshold of $206M. Without Harper’s contract on their books, the Nationals and Dodgers both sneak under this year and avoid revenue sharing
  • The AL Central is the stingiest division in the league, with none of the five teams surpassing the MLB average payroll of $126M
  • The NL West is the freest-spending division in the league, with an average team payroll of $141M

MLB Payrolls by Position Group

Some really interesting takeaways from this data, which views the proportion of each team’s payroll spent on each position group:

  • The Cubs and Dodgers' pitching staffs are the two most expensive position groups in baseball, coming in at nearly $100M each. I’m sure this isn’t shocking given that they combine to employ Jon Lester, Yu Darvish, Cole Hamels, Clayton Kershaw, Kenley Jansen, and Rich Hill, but I thought the amount of resources devoted by each of these times was pretty striking
  • The Padres and Angels spend the most on their position players and least on their pitchers. Given the Padres' recent contracts to Hosmer and Machado this actually makes a lot of sense, and Mike Trout’s new contract combined with Albert Pujols' monster (and never-ending) deals are also massive
  • I was surprised to see what a high proportion of their total payroll some AL teams devote to the DH position - Cleveland, Oakland, Texas, and more are all spending ~15% of their team-wide payroll on a single designated hitter