Does Major League Baseball need a Salary Cap?
MLB betting analyst Nick Galaida takes a look at whether or not Major League Baseball needs a limit on payroll spending ahead of Opening Day 2023.
Major League Baseball has a Steve Cohen problem, but not in the way most people think.
Cohen’s willingness to dive into the shallow end of his enormous fortune in pursuit of winning is less of a problem for competitive balance and more of a problem for his peers, team owners who are finally being exposed as unwilling to spend money to win, rather than incapable of investing in prized talent.
Cohen, baseball’s wealthiest owner, has nearly doubled the New York Mets’ payroll since his purchase of the team was approved in October 2020. In his short tenure as the team’s owner, he has signed Francisco Lindor, Brandon Nimmo, Max Scherzer, Edwin Diaz, Justin Verlander, Starling Marte, Kodai Senga, and Mark Canha to new contracts that total over one billion dollars, per Spotrac.
Cohen’s willingness to blow past the fourth and highest tier of the competitive balance tax entering the 2023 season has reignited conversations surrounding a payroll cap in baseball, amid concerns that the other organizations will be unable to fairly compete with a man who has a higher net worth than the 14 least wealthy MLB owners combined, according to statista.
Though Cohen is unusually rich, that does not preclude other owners from paying the relatively modest sum required to compete for a championship. As of February 2022, the least wealthy owner of a major league team is Robert H. Castellini of the Cincinnati Reds, who boasts a net worth of approximately $400 million. Castellini purchased the Reds in 2006 for $270 million, a franchise that is now worth $1.19 billion according to Forbes.
When he bought the team, he proclaimed in his introductory press conference that he was “buying the Reds to win. Anything else is unacceptable.” Yet, in 16 years as majority owner, it is abundantly clear that there is one thing that makes losing acceptable – profit.
In 2021, the Reds accrued $266 million dollars in revenue, less than half of which was spent on payroll. However, Castellini still spent 47.6% of his revenue on payroll – making him look like a reckless spender compared to Ohio’s other professional baseball team owner, the Dolan family, which spent only 19.0% of their 2021 revenue on payroll.
Since the playoffs were expanded in 2012, teams that have ranked in the top-10 in payroll have made the postseason 52.7% of the time. However, from 2012 to 2021 (excluding the pandemic-shortened 2020 campaign), only 22.7% of teams that have made the playoffs with a payroll outside of the top-10 have won a playoff series, compared to 51.7% of teams with a top-10 payroll. Only twice in the last 11 years has a team outside of the top-10 in payroll won the World Series.
In 2022, the Mets spent over $268 million on payroll, trailing only the Los Angeles Dodgers in spending, but neither team won the World Series. Consistent with the last decade of data, spending large sums of money on talent in baseball did not guarantee a championship, or even a pennant, for the league’s top spenders, though a higher payroll strongly correlated with making the playoffs and winning at least one playoff series.
After failing to win a championship last fall, the Mets further increased spending during this past winter, hoping to end the franchise’s 36-year title drought – bringing in prized talent such as Verlander, who won last year’s American League Cy Young award, to bolster their rotation. Still, there is no guarantee that the addition will lead to the ultimate goal.
Cohen is putting forth maximum effort and maximum dollars to make the team better whenever and wherever possible. There is no guarantee that his expensive additions will lead to a title, but nobody can blame him for a lack of effort, or for prioritizing profit over winning.
Baseball has a Cohen problem – the fact that there is only one of him.
2023 World Series Odds
- Houston Astros (+600)
- New York Yankees (+800)
- Los Angeles Dodgers (+800)
- New York Mets (+800)
- Atlanta Braves (+1000)
- Toronto Blue Jays (+1500)
- Philadelphia Phillies (+1700)
- Seattle Mariners (+1800)
- St. Louis Cardinals (+2500)
- Cleveland Guardians (+3300)
- Chicago White Sox (+3500)
- Milwaukee Brewers (+4000)
- Minnesota Twins (+5000)
- Los Angeles Angels (+5000)
- San Francisco Giants (+5500)
- Texas Rangers (+5000)
- Boston Red Sox (+7500)
- Chicago Cubs (+8000)
- Baltimore Orioles (+10000)
- Miami Marlins (+10000)
- Arizona Diamondbacks (+15000)
- Detroit Tigers (+17000)
- Kansas City Royals (+20000)
- Cincinnati Reds (+25000)
- Pittsburgh Pirates (+30000)
- Colorado Rockies (+40000)
- Washington Nationals (+50000)
- Oakland Athletics (+100000)
If you are not in a state with legal sports betting, you can target Francisco Lindor player props using our No House Advantage promo code in a DFS game.