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 Bluesky @benclemens.
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
Total projected 2022 payroll for the Pirates: $39 million.
Max Scherzer’s AAV: $43.3 million.
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.
Raise minimum and automatic increases for 0, 1, and 2, year players (tiered), at least until they hit Arb.
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.
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.
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?
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.
Is the 1st pick more valuable than the one game wildcard?
I can’t wait to see what the Mets give deGrom after he opts out. I’m thinking 3 years, $150M.
Yeah Buccos!
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.
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.
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.
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.
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
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.
Well if you’re drafted by that team, which nearly all year 1 and 2 players are, you don’t really have a choice
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.
But that would lead to teams signing more players to long term contracts that avoid these automatic salaries
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.
because the alternative is being non-tendered and not getting those dollars, then competing in a larger free agent pool
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.
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.
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.
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.
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.
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.
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?
Good work, well presented. I wonder why the owners would have introduced their cap/floor proposal when basic math shows what a loser it is for the players. A couple of points I’d make–the three biggest spenders, Dodgers, Mets and Yankees, are not only in big markets but also in high tax states and, for their net dollars to match up to, say, Texas, they have to pay more. That’s obviously only a portion of the problem, given that Florida is a low tax state, and neither Tampa nor Miami spend. The second is that the current system encourages the teams who would struggle to make .500 to just take things apart and reset for four-five years later, while subsidizing that poor play. It’s more economically advantageous to be lousy. MLB management must understand that if they want to monetize a national brand, they should do everything possible to limit the number of teams tanking, but they haven’t made a proposal that doesn’t have the players pay for it.
This does matter for some players–Zack Greinke is the one who comes to mind first. But to be fair, lots of players also want to play in LA or NY. It’s not like being in a major international media market with a huge number of lifestyle amenities for the wealthy is hurting them.
Unfortunately MLB doesn’t want to monetize a national brand they view it as a regional sport and they market it as a regional sport. If they wanted to market a national brand they would solve the blackout issue yesterday.
Also the league makes the most money when the large market teams like the Dodgers, Yankees, Red Sox, Giants, etc. are good. The small market teams understand that it’s collectively most beneficial for larger market teams to be good as they bring in more overall revenue to be shared.
The economic incentives simply need to change. Bad actors like Nutting need to be penalized for doing the bare minimum and spending needs to be incentivized for smaller markets. MLB collectively shouldn’t be okay with owners who just want to own an appreciating asset while riding the coattails of those owners putting in the effort.
There are only 30 MLB teams available, this isn’t an normal industry, it doesn’t have to work this way.
Looking at this, the team that jumps out to me the most is the Phillies. With the Phillies’ revenue stream, needs in both the infield, and Dave Dombrowski at the helm I’d put them as one of the few teams in on Correa, Story, or Bryant. Toronto could also be in on one of those guys too, since Biggio can play second base just fine.
Atlanta’s salary is probably going up since they will probably re-sign Freeman. If they don’t, I wonder if they would go after Correa. I kind of think the Cubs should go after Correa too. Oakland’s salary is probably going down, as are the Rays.
The Giants have a ton of payrolls space and I’m not exactly sure what they’re going to do with it at this point. Probably it won’t be one big splash since they’ve already got Crawford at shortstop and most of the guys who make sense getting a massive contract are shortstops.
I’m continually annoyed at the Angels. They’re going to waste both Trout and Ohtani. I get the sense the Rangers are close to done but they have holes everywhere. They could really use a lot of help, especially with pitching but also in the outfield.
It’s weird, but thanks to the Rangers, the Angels are no longer the stars-and-scrubsiest team in the AL West lol.
Agree about the Phillies – they can use Stott as a trade chip if they grab either of the top SS, and Bryant might be a great fit as well.
For the Blue Jays, where do you see Bo Bichette going if he’s moved off SS?
The Rangers have two replacement level starters, three if Spencer Howard doesn’t turn things around. They have at least two (maybe three, if you don’t buy Adolis Garcia’s breakout) replacement level outfielders, one of whom they actually signed this year to a free agent deal because their other options were worse. Their projected DH has a career 86 wRC+ (although Steamer sees him being at 115).
They do have some interesting pitchers at AAA (Winn, Yerry Rodriguez) but the outfield is a bit of a mess. They’ve got one prospect in AAA who was left unprotected in the Rule 5 and a whole lot of guys in A-ball. They can probably shift one of their many 2nd base prospects to left, but this is going to be one of the weirder teams for the next couple of years.
I think Bo goes to 3b for what it’s worth but only if they got Correa which I find unlikely. Like even if they sign Story I think Bo stays at SS and Story goes to 2b.
It’s a similar story for Soto in DC. They may be the worst team in the NL this season even though they have the best player. More to the point he does not have an extension. At least LAA pay Trout and Ohtani what they deserve.
That’s…… not true at all? Ohtani made $3m last year in arbitration. At age 23 (the same age Soto is now), Trout signed a 6 year $144m extension, to say he was underpaid during those years is an insult to the word “underpaid”
I think Story and Bryant still have pretty large markets yet.
Correa is definitely a confusing one for me at this point though. Truly no idea where he’ll land at this point.
The bigger problem for the MLBPA is the distribution of salaries. In 2021, the top 100 players are received over half the salaries paid (52.4%), an increase from 42.5% in 2017. The top are getting paid and that’s driving overall salary increases.
Both the average and the median salary have gone down because veterans aren’t being paid like they used to. The average salary dropped from $4.45 million in 2017 down to $4.17 million at the start of 2021. The median salary dropped from $1.65 million in 2015 down to $1.15 million at the start of 2021.
I’m not sure that’s there’s an easy way to fix that. Front offices have figured that younger, cheaper players can provide replacement level talent the same as proven replacement level veterans. Making arbitration available earlier might help with that to some extent.
Is this a problem though? I mean no one is paying to come and see a replacement level veteran. You are coming to see the stars, and they should be compensated accordingly. I’m sure Josh Harrison is a nice guy, but other than his family no one is not buying a ticket if a pre-arb player is out there in stead of him.
For the MLBPA, it is a problem. People pay to see the stars, but the other players are really good at baseball too. Without them, the game isn’t possible.
The bargain from previous collective bargaining agreements was that players wouldn’t be compensated fairly during their early years, but they would reap the rewards later in free agency. That bargain has broken down.
If front offices are going to use younger, cheaper players, then the union has to make them more expensive, so their salaries more appropriately reflect the value they are providing. That means that players must be compensated earlier in their careers, either by shortening the path to free agency, or increasing the years subject to arbitration.
Shortening the path to free agency is probably going too far, but I can see arbitration happening a year earlier, or they could significantly raise the MLB minimum and/or institute a salary floor.
I don’t know if there’s a fix to this. Change compensation any way you want, but it’s not going to make a 33 year old any more attractive compared to a cheaper, similarly productive 24 year old
Yeah the only way to fix this is to make pre-arb and arb players more expensive. This was Travis Sawchik’s hobby horse when he was here, and it doesn’t make any sense. Every so often you get teams throwing money at Kole Calhoun because all their other options are below replacement. But for the most part, teams have guys who are just as good as the various 1-1.5 win hitters floating around and they’re cheaper too.
The replacement level players aren’t usually that good, otherwise by definition the veterans would be worth 0 WAR or worse.
It’s just that the extra performance the veterans provide isn’t often worth the extra money they make in the eyes of cheapskate and tanking owners and GMs, despite the fact that paying them even $2-4M per year is absolutely worth 1-1.5 WAR (even when using a more accurate sliding $/WAR scale), and competitive teams and many of the rebuilding teams that aren’t tanking do indeed still sign these kinds of free agents.
But most teams are capable of producing a 1-1.5 win player from the minors, thus giving no reason to pay more money for a veteran
Only on occasion can they do so and only at a single position (or maybe a utility guy) for the 15 or so guys who get Rookie of the Year votes each year. That still leaves plenty of room (including bench and bullpen spots) on many teams for those kinds of veterans.
It does make some sense though.
By making young players more expensive you’re making comparable vets relatively more attractive by changing the risk equation.
At $500k for a fringe prospect brought on to the roster versus $2m for a 1-1.5 WAR vet you take the rook every time and cycle guys through. That equation changes drastically at say a $1.5m minimum.
That’s why the union wants to make sure the 24 year old isn’t cheaper anymore. If front offices are going to go for younger players, then the union wants them compensated accordingly.
It’s about relativity. There’s some value to some teams in the known quantity of a vet versus a young player. If the compensation for young players is increased it makes the vet relatively more valuable.
It’s almost less about getting middling vets more money and more about getting middling vets more jobs by increasing the risk of going with a younger player.
If a salary floor is enacted (and without lowering the CBT level), then that would at least force rebuilding teams that would otherwise tank more than necessary into signing some decent free agents to 1-2 year stopgap deals.
Avoiding the political claims of who is to blame, etc, we may be entering a period of indeterminate length of higher inflation than we are used to. I grew up in the 70s and am used to some staggering levels of it, but when we have been at like 1-2% inflation like forever, even like 5% is a big change in mindset.
Don’t know where I am going with this and how it will affect negotiations, salaries in long-term deals and the like, but I wonder if that is hovering in the back of peoples’ minds as the money talk goes forwards…
I doubt that it matters much at all. Much more important in the talks are how much MLB’s revenues have increased, and how much player salaries as a percentage of that revenue has gone down.
It definitely matters, especially for dollar values which are static from CBA-to-CBA . with a high inflation rate we can expect revenue and costs to increase at a greater pace which would lead to static numbers (like the minimum pay and CBT) becoming outpaced quickly as the CBA progresses. The MLBPA has been EXTREMELY short-sighted over the past decade when it comes to the growing revenue of MLB as a whole as they’ve negotiated these static numbers.
It’s imperative that MLBPA gets it’s head out of the sand and tie some of the income levels to the overall revenue, otherwise they will once-again be outpaced and their share will continue to dwindle. A high inflation rate during the life of the agreement will compound the issues which already exist.
Inflation doesn’t matter because MLB’s increase in revenue has outpaced inflation every year up through 2019. I went back as far as 2001 before I quit. The time frame of a CBA is 5 years. The highest percentage increase in revenue over any 5 year time span was just over 50%, with the average being just under 36%. You plan your negotiations around increases in revenues, not inflation. Inflation only matters if it outpaces revenue.
MLBPA doesn’t want to tie salary levels to the overall revenue because the only way to do that is a salary cap. They want to get back to players getting over 55% of team revenues, which is where they were before the 2003 CBA. What they need to do is increase returns due to winning, which the current revenue sharing rules may decrease.
As soon as Covids over the supply chain is fixed and inflation goes away. If you want to help this along then get people you know who are not vaccinated to be vaccinated.
Excess savings are still out there for the long term. Address Covid and both logistics and labor pressure ease.
If inflation was really an issue, the bond market would show it like it did in the 70s. You can get a private 30 year fixed rate mortgage at 4% today. That’s heaven.
SEA …after all that talk of being willing to spend big…is at exactly the same payroll as 2021…and $80 million below 2018. I know they’ll pick up another bat, but passing on Stroman seems cheap. Now they’re talking about trading prospects for a #2 SP……..cheap cheap cheap.
Could have signed Stroman and Bryant and Story or Suzuki and still been under 2018 payroll.
You’re acting like a team can sign any player they want just by offering market value or that players will always take the top offer. Furthermore, all but Stroman are still free agents.
For all we know, they did seriously pursue Stroman, but they were either outbid or he had another reason to pick the Cubs over them. They could also very well still sign one or more of the other players you mentioned once the lockout is over.
If arbitration were abolished, and teams only had 4 years of control of college and 6 years of high school draftees then I think baseball would be a lot better
You mean it would be a lot worse, since only the larger markets could ever manage to field winning teams. The service time system is unfair but necessary to ensure competitive balance!