2017 Projected Opening Day Payrolls

With free agency more or less in the books and all arbitration cases having been decided, the projected payrolls for Major League Baseball teams are becoming more clear. A few moves could occur before the start of the season — maybe some contract extensions, maybe some trades — but given the information we have, we can come pretty close to projecting Opening Day payrolls for all 30 teams.

Overall, spending has increased moderately since last season. A year ago, the average Opening Day payroll was right around $128 million, which itself represented a very small increase over 2015 despite big spending in free agency. This year, the average payroll is up to $133 million, a 4% increase despite uncertainty with the new Collective Bargaining Agreement and a weak free-agent class.

In what follows, I’ll consider the league’s payrolls in a few different ways. Salary information has been collected from Cot’s Contracts, while the equivalent of the MLB-minimum salary has been attached to open roster spots, bringing each team to 25 players. Money for players not on a club’s roster roster — as in the case of the Reds, for example, who are paying $13 million for Brandon Phillips to play in the Atlanta suburbs — is included in the payroll for the team actually paying the money.

To nobody’s surprise, the Los Angeles Dodgers have the highest payroll in baseball.

The Dodgers come in at around $235 million, which is roughly $40 million clear of the second-place Detroit Tigers. Even after accounting for the competitive-balance tax, it appears as though the Dodgers are still looking at a reduction of more than $30 million from last season. Even if they need to cut payroll more, the result should hardly be debilitating for the health of the team.

The tax amount for this season is $195 million. When you account for the $15 million or so that gets added for benefits and the rest of the 40-man roster, it would appear that the Tigers and Yankees will pay between $5 million and $10 million, the Giants will be right on the borderline, and the Red Sox might actually be under, as Allen Craig and Rusney Castillo don’t count for tax purposes.

All the way at the other end, we see Tampa Bay, still scraping toward contention with a very small payroll and hoping for a new stadium and television deal in the not-so-distant future. In the middle of a rebuilding phase, Milwaukee has cut their payroll almost in half from a few years ago when they were contending. The San Diego Padres, meanwhile, have transitioned in recent years from faux-contender to a rebuild; more than half of their payroll is reserved for players on other clubs.

Mirroring trends on the player-specific level, we see here a shrinking middle class. In theory, to identify the middle-third of clubs in terms of payroll, we could take the average of $133 million, go up one-sixth to $155 million and down one-sixth to $111 million. We’d expect to find 10 teams in that range — maybe more if the “middle class” of clubs were particularly strong. We don’t see that, though, as just eight teams appear in the “middle” by that methodology. There’s a clear upper-middle class: 11 teams feature payrolls above the Texas Rangers’ level of $158 million. Another 11 teams have payrolls at or below the Houston Astros’ $109 million figure, with nine franchises sitting under $100 million. This could pose some problems, as the relationship between money and wins last season was on the rise.

Spending in any one particular season isn’t always meaningful; a single team’s payroll often fluctuates depending on how close the relevant club is to winning. For example, the Cubs and Astros had fairly low payrolls as they rebuilt. Now, the Cubs already appear near the top of the league, while the Astros presumably have room to continue growing their payroll. The last four years won’t fully capture spending power, but examining them does show what teams have spent to win. Below is the average Opening Day payroll for all teams from 2014 through this season.

Generally speaking, this graph looks a lot like the 2017 one. The teams are in roughly the same spots, although there isn’t the same type of tiering we see this year. Adding four years tends to smooth things out a little bit. When we compare this season to the four-year average, the biggest gainer is the Miami Marlins, who still sport a below-average payroll — just not as embarrassingly low as it used to be. The New York Mets are second. After ownership debt issues kept payroll down for some time, the team is edging up, although still not commensurate with the market from which they benefit. The aforementioned Cubs and Astros have increased spending by around $40 million, as have the Baltimore Orioles, perhaps reaping the benefits of a favorable television deal with the Nationals.

At the other end of the spectrum, the rebuilding Brewers, Phillies, and Padres have seen the biggest drops, at $25 million or more. The fourth-biggest drop in payroll from 2014 to -16 compared to this year belongs to the New York Yankees. As other teams have spent more money, the Yankees’ spending power continues to wane. Even just three seasons ago, the Yankees’ $197 million payroll represented 5.7% of MLB payroll, while their $195 million payroll this season is “only” 4.9%. That’s a 14% drop in spending power in just three years — and half of what it was in the early 2000s.

Comparing only last season to this one, we can see which teams have changed the financial picture of their roster the most in 12 months.

The Marlins started last season with a payroll under $75 million. Raises for Giancarlo Stanton and Dee Gordon added $10 million; signing Junichi Tazawa, Edinson Volquez, and Brad Ziegler added another $20 million; and retaining Martin Prado and a handful of other arbitration raises meant a more than $40 million increase over payroll from a year ago. The Atlanta Braves added a trio of pitchers in Bartolo Colon, R.A. Dickey, and Jaime Garcia; plus the trade for Matt Kemp explains the Braves’ increase. Cleveland used part of the bounty for making the World Series by reinvesting in the team. The Padres and White Sox gave up on contention for the time being, while the Yankees saw Mark Teixeira retire and moved most of Brian McCann’s contract to the Astros.