Sep 20, 2022 - Sports

The strong connection between MLB payrolls and wins

Data: MLB; Table: Thomas Oide/Axios
Data: MLB; Table: Thomas Oide/Axios

Large MLB payrolls don't always equal large win totals, but there's a strong correlation this season.

State of play: Eight of the top 10 teams by luxury tax payroll are in playoff position entering Tuesday, per data provided by MLB. Here are the current playoff teams, and where their payroll ranks:

  • NL: Mets (highest payroll), Dodgers (2nd), Phillies (4th), Padres (6th), Braves (8th), Cardinals (15th)
  • AL: Yankees (3rd), Astros (9th), Blue Jays (10th), Mariners (21st), Rays (23rd), Guardians (27th)

Between the lines: The Mets — who just clinched the playoffs — are on track to have MLB's highest payroll for the first time since 1989 (when it was just $21.3 million), and they're one of a record-tying six teams set to pay the luxury tax this year.

  • Mets: $298.8 million payroll ($29.9 million tax)
  • Dodgers: $290 million ($29.4 million)
  • Yankees: $267 million ($9.4 million)
  • Phillies: $243.1 million ($2.6 million)
  • Red Sox: $234.5 million ($900,000)
  • Padres $232.8 million ($800,000)

How it works: The luxury tax is designed to prevent big market teams from far outspending their peers. There's no salary cap, so owners can spend as much as they want on players, but they start paying penalties once their payroll balloons to $230 million.

  • There are four thresholds — $230 million, $250 million, $270 million and $290 million — with teams taxed at increasing rates for every dollar they go over each threshold. Repeat offenders (Dodgers and Padres this year) are also taxed higher.
  • Mets owner Steve Cohen was so adamant about spending money to build a winner that the new $290 million threshold — which his team did indeed surpass — was unofficially named the "Cohen Tax."
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