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.





Ben is a writer at FanGraphs. He can be found on Twitter @_Ben_Clemens.

62 Comments
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Michaelmember
8 months ago

Pittsburgh has about 15 players on its 25 man who are pre Arb. Raising pre Arb salaries up to $1M would instantly get the cheapest team up $7M

Robbie314member
8 months ago
Reply to  Michael

Total projected 2022 payroll for the Pirates: $39 million.

Max Scherzer’s AAV: $43.3 million.

v2miccamember
8 months ago
Reply to  Robbie314

Yeah, the MLBPA has kind of backed themselves into a corner. They fought a salary cap, and the salary floor that accompanied it. But they allowed the luxury tax, which acts as a de-facto salary cap without the salary floor. This will allow teams like the 2021 Pirates or the 2015 Astros to spend as little on salary as possible on losing teams while ownership continues to pocket a small fortune.

This will never happen, but I would love to see revenue sharing tied to winning. Field a AAAA team and lose 100 games, you get nothing from revenue sharing, enjoy your draft picks.

richwp01member
8 months ago
Reply to  v2micca

Raise minimum and automatic increases for 0, 1, and 2, year players (tiered), at least until they hit Arb.

sadtrombonemember
8 months ago
Reply to  v2micca

I think proposals like this don’t grapple with the thorny issue that revenue sharing has consequences for future spending. If a team really didn’t get revenue sharing because they lost 100 games, it’s not like that’s going to get them to go out and spend more money the next year. They’re going to keep running out there with low-paid guys until their young guys break through.

hughduffy
8 months ago
Reply to  v2micca

There is a de-facto salary floor: the league minimum salary, $570,500, or $14,833,000 for a 26-man roster. They could increase the salary floor any time by increasing the major league minimum.

Lanidrac
8 months ago
Reply to  v2micca

That may encourage rebuilding teams to spend more on free agency, but wouldn’t it also make rebuilding periods last longer even among teams that aren’t tanking?

John Northeymember
8 months ago
Reply to  v2micca

I’m more in favor of screwing with their draft picks – I vote for the draft to be split in 2 – non playoff teams where the best of them gets #1, 2nd best 2nd pick, etc. until the O’s (or whoever decided not to compete) gets the last pre-playoff team draft pick. Might change the incentive for teams.

Thrasiusmember
8 months ago
Reply to  John Northey

Is the 1st pick more valuable than the one game wildcard?

sadtrombonemember
8 months ago
Reply to  Robbie314

I can’t wait to see what the Mets give deGrom after he opts out. I’m thinking 3 years, $150M.

gettwobrute79member
8 months ago
Reply to  Robbie314

Yeah Buccos!

sadtrombonemember
8 months ago
Reply to  Michael

I really think that this is an important point for the MLBPA if they can pull it off, along with moving arbitration earlier (which sounds like a tough lift). Not only would it automatically make it harder for teams to run zero payroll, giving players more money earlier in their career makes it so that they don’t feel quite as much pressure to lock in guaranteed money.

kick me in the GO NATSmember
8 months ago
Reply to  Michael

I agree, a million minimum for any MLB player. $100k min for AAA. $75k for AA. $50k for A, and $40k for rookie league players. A bonus of $5k for Arizona fall league players. Do this and the Pirates and Cleveland ownership sell. But the game is healthier overall.

Matt
8 months ago

This isn’t relevant to the discussion. MiLB players aren’t covered by MLBPA and therefore receive pay at the owners’ discretion unless aside from what is negotiated prior to signing.

cookiedabookie
8 months ago
Reply to  Michael

My idea: Get rid of arbitration completely.
First year minimum $500,000 if on 40 man, regardless of debut date
2nd year: $1 million if on 40 man
3rd year – $2 million
4th year – $4 million.
5th year – $8 million
6th year – $16 million
7th year – $32 million

If a team decides not to tender a contract at these levels, the player becomes a free agent. Only top tier players would ever be held for seven years, and likely will have signed an extension by then. Max pay out for seven years is $63 million, I suspect there’d be a lot of 5-7 year $30-60 million extensions being signed, especially after the first year. Most players would likely hit free agency after their fourth or fifth year. This may suppress their salaries, but they’ve made more at the beginning of their careers, and get earlier control over where they play.

Dmjn53
8 months ago
Reply to  cookiedabookie

Arbitration needs to be completely overhauled, but I don’t like the idea of all players getting paid the same rate regardless of performance. There has to be incentive for a player to perform better

Michaelmember
8 months ago
Reply to  cookiedabookie

I kinda love this idea.

Also would penalize teams like the Rays that use 40 man players like tissues. No team would want to sign with them knowing they’d never hit year two or three.

Dmjn53
8 months ago
Reply to  Michael

Well if you’re drafted by that team, which nearly all year 1 and 2 players are, you don’t really have a choice

sadtrombonemember
8 months ago
Reply to  cookiedabookie

This certainly would be popular with the players since you are essentially assigning everyone the maximum anyone will get through arbitration in the later years. But I don’t think the players have even 10% of the leverage needed to force this through.

cookiedabookie
8 months ago
Reply to  sadtrombone

But that would lead to teams signing more players to long term contracts that avoid these automatic salaries

Lanidrac
8 months ago
Reply to  cookiedabookie

Why would players interested in signing such extensions when they could either make a lot more through the escalating salaries or hit free agency early? On the contrary, you’d see a lot fewer early career extensions, another problem with this idea that further ruins competitive balance.

cookiedabookie
8 months ago
Reply to  Lanidrac

because the alternative is being non-tendered and not getting those dollars, then competing in a larger free agent pool

Lanidrac
8 months ago
Reply to  cookiedabookie

That’s easily worth hitting free agency a year or two earlier than they otherwise would. Even with a larger free agency pool, they’d still make significantly more money during those extra prime years than they would through an early career extension or even the current arbitration system.

tz
8 months ago
Reply to  cookiedabookie

I really like the part about starting the clock when a player first hits the 40-man roster. If just that part of your idea got implemented, it would basically do away with service time manipulation.

Lanidrac
8 months ago
Reply to  tz

It’s a good idea in a vacuum, but it should be incorporated into the current service time system with a 7th year of team control added before free agency in exchange (given players generally spend about a year on the 40-man roster beyond their Major League service time).

In order to prevent service time manipulation, the yearly division should be set to the day after 40-man roster decision are due before the Rule 5 Draft. That way, teams have to decide between starting a prospect’s service time clock that year or risk losing him to another team.

Lanidrac
8 months ago
Reply to  cookiedabookie

Yes, that would get many young players paid more, but even the current arbitration system is much more fair regarding player performance. Those 4th-5th year salaries are extremely cheap for players who have already established themselves as All-Stars.

Furthermore, thrusting all but the star players into free agency after just 5 years on the 40-man roster at most would ruin competitive balance, as the only way small markets can compete at all is through young stars under team control (or early career extensions) who get paid significantly less than they would in free agency.

The current service time system is unfair but necessary for competitive balance. As such, modest changes like significantly raising the MLB minimum or adding an extra year of arbitration to the 3+ year service class would be good compromises, but there should not be any major changes like completely overhauling the system, removing a year of team control before free agency, or significantly raising arbitration salaries to be much closer to free agent salaries.

averagejoe15member
8 months ago
Reply to  Lanidrac

In a vacuum it hurts competitive balance but what if revenue sharing was more aggressive for example?

Lots of larger market teams are establishing their own TV networks to protect that local TV revenue from revenue sharing. Open up that box.

Feels like the MLBPA could be savvier about playing owners against each other by offering concessions that benefit half the group.

Lanidrac
8 months ago
Reply to  averagejoe15

League-owned TV rights with even revenue sharing like in the NFL doesn’t work very well in a sport where every team plays almost every day, and it would be impossible to setup over a single offseason.

Meanwhile, MLB already has as much revenue sharing as it can handle while the TV rights do indeed remain local.

averagejoe15member
8 months ago
Reply to  Lanidrac

I’m not talking about league-owned TV rights. Simply noting that when teams own their own networks it’s a workaround to protect some of the local TV money from revenue sharing.

I also disagree that MLB has as much revenue sharing as it can handle. What proof exists that this is true?