Final MLB Payrolls For All 30 Teams Show Second-Largest Decline Since 2004

Spending was down dramatically on player payroll in Major League Baseball for 2018, based on final payroll figures.

Based on figures provided by the Associated Press, the 30 clubs in MLB spent $4.548 billion on player salaries. That was down $115.388 million compared to 2017.

The decline in spending on player payroll is the first-time since 2010 ($2,911,575,488) to 2009 ($2,913,904,332) in Major League Baseball. The drop of $115,390,452 between 2018 and last year is the second-largest drop year-over-year since 2004 (-$204,784,305). Should final total player payrolls drop again in 2019 it will mark only the second time since 2004-05 that decline has occurred in consecutive years.

Biggest drop was the Tigers, decreasing end of year player payroll from $207,204,947 in 2017 to $135,349,421 in 2018, a drop of nearly $72 million ($71,855,526).

Other large drops included the two clubs that have been in an arms race around spending over the last several seasons: The Los Angeles Dodgers and New York Yankees. Both these clubs got under the Luxury Tax threshold by decreasing spending dramatically. The Dodgers, while still having the fourth-highest Luxury Tax payroll in 2018 ($195,039,730) dropped spending by $58,594,163 compared to end of year player payroll in 2017 that was $253,633,893. The Yankees dropped all the way to sixth in ranking end of year payrolls by doling out $192,980,833, a decline of $31,243,874 compared to 2017 ($224,224,707). Other big drops included the Kansas City Royals (down $53,076,100 compared to 2017), and Marlins (a drop of $46,806,365 compared to last year).

Three clubs saw final payrolls below the $100 million threshold. They included the Oakland A’s ($96,478,025), Tampa Bay Rays ($95,568,294), and Chicago White Sox ($82,889,649)

In terms of the biggest spenders, the 2018 World Series Champion Boston Red Sox led the way at $239,481,745, followed by the Washington Nationals at $204,953,656. The two clubs were the only ones to break MLB’s Luxury Tax threshold, and in doing so paid penalties. The Red Sox will pay $11,951,091 while the Nationals will owe $2,386,097.

The total of $14,337,188 in Luxury Tax penalties is the second-lowest amount incurred ranking behind only 2003 when the New York Yankees paid $11,798,357. The Red Sox have paid the Luxury Tax 2004-07, 2010-11, 2015-16, and 2018. This year marks the first time, ever, that the New York Yankees have not paid the Luxury Tax. It is also the first time since 2012 that the Los Angeles Dodgers have not had to pay under baseball soft cap system.

Since the current Luxury Tax system was put in place, the New York Yankees continue to have paid the largest percentage. Of the $553,009,082 in penalties, the Yankees have paid $340,767,870 of the total, or 61.6%. They are followed by the Dodgers ($149,589,945, or 27.1% of total), and Red Sox ($37,068,570, or 6.7% of total)

The largest increases in final player payroll over last year was incurred by the Red Sox ($47,593,323), Houston Astros ($46,910,954), and Arizona Diamondbacks ($39,093,613). For 2018, just two clubs, the Red Sox and Nationals has final payrolls over $200 million. That compares to four in 2017. All told, just 12 clubs out of 30 spent more in 2018 than 2017 on player payroll and benefits.

The calculations for final payrolls are for the 40-man roster, that also “include the average annual values of contracts and $14,044,700 per club for benefits and extended benefits, which include items such as health and pension benefits; club medical costs; insurance; workman's compensation, payroll, unemployment and Social Security taxes; spring training allowances; meal and tip money; All-Star game expenses; travel and moving expenses; postseason pay; and college scholarships,” according to the Associated Press. The totals include “incentive bonuses, non-cash compensation, buyouts of unexercised options and cash transactions. In some cases, parts of salaries that are deferred are discounted to reflect present-day values.”

Source: Associated Press