The Current State of 2022 Team Payrolls

With last week’s lockout of the players by ownership, the league has frozen all transactions for the foreseeable future. That’s bad news — but it also makes this a good time to take a snapshot of team payrolls, because there are no new deals coming down the pipe to mess up the analysis midway through. As such, the following is an update on each team’s payroll as it stood at the start of the lockout. Here are our team-by-team RosterResource projections:

A few notes, some of which will likely be familiar to you if you followed past versions of this exercise written by former FanGraphs writer Craig Edwards. The above data counts salaries for 2022, not average annual values. It includes estimates for arbitration, as well as estimated minimum salaries paid throughout the season; our payroll pages currently use the 2021 league minimum, but that number could change in the upcoming CBA. The numbers don’t include incentive bonuses, or a few specific CBA wrinkles, such as the approximately $2 million that teams pay to players who aren’t in the majors but are on the 40-man roster or the roughly $16 million per team spent on player benefits. They also don’t include as-yet-unsigned free agents, naturally.

The Mets’ recent signing spree, combined with the Dodgers’ losses in free agency, has seen the two teams change places at the top of the payroll standings (somewhat surprisingly, the Mets finished as the second-highest spenders in 2021). All told, there are three teams (the Mets, Dodgers and Yankees) that are currently projected for more than $200 million in player salaries in 2022, the same number (and the same teams) as last year. Meanwhile, there are two teams (the Pirates and the Guardians) with projected payrolls below $50 million, one more than last year, and neither of those teams is likely to make meaningful free agent signings when transactions resume.

The Yankees and Dodgers seem likely to increase their spending before the season starts, which I’ll cover below. First, though, let’s breakdown the team-by-team changes in payroll versus 2021:

Relative to 2021, league-wide payrolls are down $90 million, though truthfully, I’m not sure how much that number tells us. Final 2021 salaries included plenty of players who are currently free agents, as well as incentive bonuses (a far smaller outlay). To compare apples to apples, I took the crowdsourced contract estimates for every unsigned free agent on whom we polled, a group of 47 players. That’s not to say that no other free agents will sign beyond that group, but many of the remainder will sign deals for near the league minimum. As our analysis already includes projected league minimum spots, signing those players won’t affect payroll that much.

Despite the early boom in free agency, the crowd (and I) project that there are plenty more stars to be had. Carlos Correa, Freddie Freeman, Kris Bryant, Nick Castellanos, Trevor Story — that’s just the top five hitters, and on their own, they have an aggregate crowdsourced salary estimate of $121 million in 2022.

The total projected outlay for every remaining free agent comes to $486.7 million. That would bring total team payroll in 2022 to $4.385 billion. That would represent an increase of nearly $400 million over 2021 salaries. Again, it’s just an estimate, but I think it’s a fairly good one. Two offsetting factors — the players at the top of the list seem likely to beat the crowdsourced projections given the tenor of the market so far, while some of the players at the bottom of the list won’t get major league deals — balance the risks.

Of course, 2021 is a strange year to use as a baseline. As the first year after the pandemic-shortened season, it had anything but a normal offseason preceding it. Teams scrimped and saved everywhere. In total, 2021 payrolls were $230 million lower than non-prorated 2020 salaries, and $218 million lower than 2019 salaries. In other words, 2022 projects to be an increase of roughly $200 million over the steady-state total payrolls of years past, counting 2021’s decrease as a one-year blip.

Meanwhile, the competitive balance tax faces an uncertain future. It will be an integral part of the ongoing CBA negotiations, which makes it hard to project a tax level for next year. Still, just for completeness’ sake, here are each team’s projected CBT payrolls, excluding free agents who have yet to sign:

This breakdown makes it clear that the owners’ earlier suggestion of a $100 million floor, offset by an initial CBT threshold set at $180 million, was a non-starter. The exact details of that offer were never made public, but the gist was that payrolls above the CBT thresholds would incur stiffer penalties, which would in turn be used to float the clubs with payrolls below $100 million up to the required level. But even with so many free agents yet to sign, the floor would already have no effect. The teams below $100 million in CBT payrolls total a shortfall of $110 million, while the teams over the proposed ceiling constitute a “surplus” of $280 million, making clear which payroll state serves the players better.

Setting that aside, the early returns on 2022 salaries are encouraging. The dip in salaries for the 2021 season was somewhat understandable given the pandemic, but a one-year dip and a downward trend both look the same as they happen. A recovery in total salaries is a welcome sign that there’s still plenty of money in the game. Of course, salaries aren’t the whole picture — how they compare to league-wide revenues is central to the current CBA disagreement, as is how they are distributed across different parts of the player population — but the bounce-back in salary this year is unquestionably a good thing.