MLB Has A Spending Problem, And It's Not What You Think

The Los Angeles Dodgers have become the villains of Major League Baseball by winning the World Series and continuing to build the best possible team. Fans of opposing franchises, frustrated that the Dodgers care about winning, have demanded a salary cap or other spending restrictions to punish them.

But as new data from BrooksGate on X demonstrates, the spending problem in baseball isn't coming from the Dodgers. It's coming from teams that refuse to spend an acceptable proportion of their revenue.

BrooksGate estimated revenues in 2024 for each team, then calculated their 2025 payrolls and estimated luxury tax bill. While these are just estimates, and outside the Atlanta Braves, there's little in the way of concrete information available, it does show that several teams are more than happy to spend as little on payroll as possible. Raking in huge revenues, without commensurate spending.

Per their post, the New York Mets spend the highest percentage of their revenue on payroll, at 90 percent. The Dodgers are a distant second at 73 percent, while the Blue Jays are also big spenders at 71.5 percent. In fact, the top six teams are all spending more than 63.8 percent of their revenue on payroll, including the Phillies, Diamondbacks and Padres. 

The majority of teams spend more than 45 percent of their estimated income on payroll. But that's where the problems start: there are a whole bunch of teams who don't. And it's clear most aren't even trying.

Juan Soto during a spring training workout in Port St. Lucie, Florida on Feb. 16, 2025. (Photo by Alejandra Villa Loarca/Newsday RM via Getty Images)

Teams At Bottom Of MLB Have Lots Of Excuses, Little Explanation

Looking at the list, there seems to be a clear range that most organizations prefer to stay in. And it's between 45 percent to 60 percent. Teams above that level are willing to invest more in their rosters to win the most regular-season games, bring in the biggest crowds, and increase their probability of hosting lucrative postseason games. The franchises in the 45 percent to 60 percent range are focused on "sustainable" spending and putting profits first, with competitiveness a close second. Teams like the Houston Astros traded one of the best hitters in baseball this offseason to save money. 

Then there's the bottom group. 

The Brewers, Guardians, Cubs, Pirates, Red Sox, Marlins, Rays and White Sox. Those teams exemplify the problem baseball currently has. 

Spending 30 percent to 40 percent of revenue on payroll, or less, is simply unacceptable. The Marlins, which essentially sold off any MLB-caliber stars in favor of cast-offs and AAAA-level utility players, made an estimated $317 million in revenue last year. And spent 27 percent of it on payroll.

Here's why that's a problem: if the teams at the top are still making a profit, and they most certainly are, how much profit is Miami taking in?

The Dodgers are run by the Guggenheim Partners, one of the world's largest financial services firms with more than $330 billion in assets. Companies like that, ownership like that, does not lose money on investments. If they're turning a profit with 73 percent of their revenue going to payroll, how much profit are the Marlins taking in at 27 percent? 

That's the problem with modern baseball: players like Anthony Rizzo struggle to find jobs, even though he'd be a vast improvement over most of the Marlins roster. Why? Because he's more expensive to sign. So even if he makes Miami more watchable on a nightly basis, it's not worth the hit to profitability. This pattern is repeated throughout the small-market teams, which rake in massive revenue-sharing payments they refuse to reinvest.

A salary cap wouldn't mean the Marlins, Guardians and so on spend more money. It just means the top players would make less money, with more of it going to the pockets of owners who are already collecting huge profits. That's what Rob Manfred needs to fix. Unfortunately, he's shown no interest in doing so.