Shohei Ohtani’s offseason addition to the Los Angeles Dodgers underscores the team’s ‘spend big to win big’ philosophy, which led to a 2024 World Series trophy. (Photo by Wally Skalij/Los Angeles Times via Getty Images)
PHOENIX – In the offseason leading toward the 2024 Major League Baseball season, all eyes were on one man – Shohei Ohtani. One of the biggest free agent names in the history of the sport, Ohtani can pitch and hit with the best of them.
And he didn’t even need to pitch this season following elbow surgery to still come away as a unanimous American League MVP award winner.
Ohtani signed a 10-year, $700 million contract with the Los Angeles Dodgers. Included in the contract is a record amount of deferred money, where he gets paid $2 million in salary over the 10 years, while getting $68 million a year the next 10 years after his Dodgers contract expires.
Along with signing Ohtani, the Dodgers also committed money to Japanese pitcher Yoshinobu Yamamoto and outfielder Teoscar Hernandez, ballooning their 2024 payroll to $241 million, which ranked fifth among all 30 teams. Before that spending spree, the Dodgers already had existing big-money contracts with Mookie Betts and Freddie Freeman, both former MVP winners.
In baseball, there is no salary cap, so teams can spend as much as their owner provides – and their market supports. While the Dodgers broke through in a big way in 2024 winning the World Series, their previous postseason failures show that the biggest spenders don’t always come out on top.
The Dodgers are one of the bigger-spending teams, while also being in one of the bigger markets in the country. They are continuously in the running for free agents that command large contracts.
Alden Gonzalez, a beat reporter covering Southern California sports teams for ESPN, pointed out that paying for great players can result in regular-season success, but not necessarily postseason success.
“In baseball, any team can lose two out of three or three out of five,” Gonzalez said. “There’s no better example than the Dodgers. You’ve seen them do so well in the regular season, then one of the best two or three players went cold at the wrong time, then their season is over.”
Winners of over 100 games in four of the last five full regular seasons, the Dodgers have been large spenders ever since new ownership took over before the 2013 season. They have been perennial playoff contenders, and prior to their championship in 2024, they had only won one World Series championship since 1988 – and that was in the COVID-shortened 2020 season.
Why is all of this important? No salary cap in baseball means there can be a large gap between the good and the bad teams, which means good teams can pay to stay good for long periods.
But does that automatically mean they will win it all?
Does spending to win actually work?
Eight out of the last 10 World Series champions have been ranked inside the top 10 for payrolls that specific year. The two outliers are the 2017 Houston Astros, ranking 17th out of 30 teams, and the 2015 Kansas City Royals, who also ranked 17th.
The Royals have not made the playoffs since hanging their championship banner almost a decade ago, and the Houston Astros have drastically increased their payroll to remain competitive, as they have not missed the playoffs since winning the 2017 championship.
The Royals stand out as the true outlier here, but they are a smaller market team that pushed all of their chips into the middle to go for it during their short two-year window from 2014 to 2015.
The moral of the story is that clubs need to spend to even have a good chance at playoffs, let alone the World Series. Filling out a team with high-salary players where they appear to be the best fit has been the recipe for winning championships. Even if the next few years following a spending spree might be rough, most teams see it as totally worth it.
Bigger market, bigger spenders
In the MLB season before the COVID pandemic hit, five out of the 10 highest spenders made the playoffs. The Boston Red Sox and Chicago Cubs, two teams that won championships in two of the previous three seasons, missed out on the playoffs entirely. They were the two highest payroll teams that season.
In 2024, the top six spenders all made the postseason. Teams ranked seven through 12 for payroll in 2024 all missed the playoffs.
In the 2023 MLB season, six out of the top-10 spending teams made it to the playoffs, with the fourth-highest spending team winning it all. The top three spenders – the New York Mets, the San Diego Padres, and the New York Yankees – all missed the playoffs.
Preseason expectations heralded the Mets and Padres as 2023 World Series favorites, only for both of them to flame out and finish below .500.
Being a big spender does not always work. Look at the 2023 Mets. New owner Steve Cohen purchased them in late 2020, then almost instantly turned them into the highest payroll team ever in 2023.
The Mets tried to buy a championship during the 2022 and 2023 seasons, and failed so miserably that Cohen decided to sell all the high-payroll players at the 2023 trade deadline.
“The Mets essentially paid down these big salaries so that they could get better prospects than they otherwise wouldn’t have in a trade,” said Anthony DiComo, who has been covering the Mets for MLB.com for 14 years. “They wanted to rebuild their farm system, and money was the way to do that.
“The best way to win is from your farm system. If you’re consistently pumping out prospects, then you’re getting some of the more captivating players, and you’re getting them cheaper.”
DiComo also referenced how the Atlanta Braves, who won the World Series in 2021, are extremely homegrown, and pay to keep their players when they hit free agency.
The Mets seemed to skip the important step of developing their own players, and just wanted to pay for aging stars and hope they were enough to put the team over the top. To say this did not work out is an understatement. New York went from World Series hopeful to league average at best in less than a calendar year.
The Mets, even though they struck out at the 2023 deadline, chose to add players with smaller salaries before the 2024 trade deadline. This is an about-face for the Mets compared to last season, where they spent big money.
Dicomo mentioned prior to spring training that if the team was in contention at the mid-way point of 2024, they could add pieces at the deadline.
“They built a team that they believe is capable of winning 80-something games,” DiComo said. “If they find themselves in a spot where some of the prospects are ready to go, then you could potentially make your move, make some moves at the trade deadline.”
They found themselves in that exact spot, and added players to help push them to two wins from a World Series berth in 2024.
Across the country, in another large market with a large spender, the Dodgers have been a great regular-season team, making the playoffs in 12 consecutive seasons. They consistently win in the regular season, and the balance between their highest-paid players and young inexpensive players is a big key.
“You can’t have an entire team of guys making a ton of money,” Gonzalez said. “These players are giving them value at a relatively affordable rate because they’re young in their careers still.
“That’s why it’s so important for organizations to develop players. As they come up and they’re early in their careers, they’re bringing new value and they’re good but they’re not making as much money. You need guys that balance it out.”
The Dodgers broke through in a big way in 2024, breaking a trend of falling short in the playoffs with a World Series championship. Gonzalez recognized prior to the 2024 season beginning, that the regular season and the playoffs are two different things.
“It’s winning throughout a six-month regular season, and then there’s winning in the playoffs,” Gonzalez said. “What you really need is depth. You need quality players throughout a 40-man roster because the season is so long.”
While the Dodgers won big in 2024, there is no guarantee they will be able to repeat as champions in 2025. Not every year will see two top-five payroll teams in the World Series.
Sometimes, that is just how baseball goes. Anything can happen in a seven-game series.
Smaller spenders, big dreamers
In the 2022 season, when the high-spending Astros won it all, only one of the bottom five spending teams reached the postseason, that being the Cleveland Guardians.
For four consecutive seasons, excluding 2020, the Tampa Bay Rays made the playoffs every year, and they have not exceeded $100 million in payroll in any of those seasons. They missed the playoffs in 2024 and decided to trade away players, most notably shipping outfielder Randy Arozarena to the Seattle Mariners. They’ve only come close once, spending $98 million in 2022.
Low-spending teams can make the playoffs, as both the Guardians and Rays have shown. Winning a championship as a lower-spending team? That is much harder. However, if a team makes a run in the playoffs, spending more money the following year can be a good way to try and win it all.
Increasing payroll after a championship run is something that the last 10 World Series-winning teams did, even the Royals as a team that usually hadn’t been a big spender. Increasing payroll after losing in the World Series? This is almost just as common, with most teams wanting to get over the hump.
The last 10 World Series champions (excluding the shortened 2020 season), with their payroll in the year they won it, as well as where it ranked league-wide among all 30 teams. (Graphic by Noah Sasaki/Cronkite News)
The Arizona Diamondbacks had the 18th-highest payroll in 2023, spending $124 million, and they advanced to the World Series, eventually falling to the Rangers who spent $251 million in 2023. Falling just short prompted the Diamondbacks to up the payroll spending to $166 million before the 2024 season.
“There was around a $30 million jump in revenue for getting to the World Series,” said Nick Piecoro, who covers the Diamondbacks for The Arizona Republic and azcentral.com. “The money that they brought in allowed them to do this.”
The Diamondbacks put themselves in a position to add players before the trade deadline, which they chose to do by acquiring infielder Josh Bell and relief pitcher A.J. Puk from the Miami Marlins. Players notice when a team is clearly spending to improve the team.
Team owner Ken Kendrick has heard this firsthand.
“The first day of spring training, one of the players came up to Kendrick and thanked them for spending more,” Piecoro said. “All those guys all pay attention, because it impacts them in the end.”
The Diamondbacks had not been close to the league’s top 10 in per-year payroll, and they still haven’t reached it even after spending more this season, coming in at 14th. However, one big season can change a team’s perspective, and help them push even more money into their ball club.
The Royals did it in 2015 after reaching the World Series, and it paid off with a championship just one year later after committing nearly $15 million more to the team. The Diamondbacks tried to follow a similar feat by adding $53 million more to their payroll, but Arizona ultimately fell short of the playoffs in 2024.
On a different note, making the playoffs after a long drought will usually prompt a team to spend money and make improvements, particularly mid-market teams.
The Seattle Mariners broke a 21-year playoff drought in 2022 and had high expectations entering the 2023 season. While its odds were not better than the bigger-market Mets, Seattle was still forecasted as a playoff team.
Entering the 2023 season, the Mariners ranked 18th in payroll, committing $128 million to their club, and fell just one game short of the playoffs. Seeing two division rivals make it and one winning it all discouraged the Mariners from committing future investments in a high payroll with no return.
“They found out very early on in the winter that they weren’t going to have as much financial bandwidth to go out and pursue free agents, trades, things of that nature,” said Daniel Kramer, a Mariners beat reporter for MLB.com for the past three years. “You have some significant issues with your lineup that you want to address, you can’t really go out and do that because all these players are going to not just cost the same, but some earn more in arbitration.”
Missing the playoffs in back-to-back seasons sparked ownership to maintain the same payroll, and as Kramer noted, they had to make trades to invest their payroll in different areas.
“I do think they probably would have kept a large group of the roster that they had last season and attacked from there,” Kramer said. “It worked, they got to the playoffs, and the AL West was only decided by two games between three teams.”
Making the playoffs absolutely can correlate with a team’s overall payroll year to year, and as Kramer points out, more playoff appearances will mean more money coming in.
“Playoff revenue, you’re drawing in significantly more money if you’re playing in these postseason games,” Kramer said. “The television component of it is obvious, but also ticket revenue. It’s just the marketing that goes with it (and) the merchandising that goes with it.”
Although missing the playoffs isn’t all the reason to blow up a decent roster, a mid-level spending team such as Seattle sometimes does not have a choice year over year, with many players coming and going.
“They began by trading Eugenio Suarez, then Jarred Kelenic, Marco Gonzalez and Evan White,” Kramer said. “Moving expensive contracts among players who are maybe being paid more than they were valued at.”
Seattle followed up by reinvesting their payroll in shorter-term deals for other players, such as Mitch Garver, as well as bringing back outfielder Mitch Haniger in a trade with the San Francisco Giants.
All in all, the Mariners trimmed their payroll, and the big reason for this move was not making the playoffs. If you don’t make the playoffs with higher-paid players who are on the older side, they become expendable quickly.
Midseason payroll benefits
Spending in the offseason to bring in great players can help get contenders make the postseason, or even help organizations hoist a championship banner. The data shows that teams who pay are more likely to win. Four of the last 10 champions were in the top five for payroll in their World Series-winning year.
Having money to spend doesn’t just help in the offseason leading up to the start of the season, it helps in the middle of the year.
The late July trade deadline is an important period for teams in the hunt for the playoffs. Teams that are having a down year may be looking to sell their players on expiring deals. Teams like the Dodgers can afford to outbid smaller spending teams for players who are about to be traded, as they did for former Detroit Tigers starting pitcher Jack Flaherty before the 2024 trade deadline.
Teams on the lower end of the spectrum, such as the Guardians and the Rays, are at a disadvantage but they deserve credit for maintaining success without spending money at a high rate.
“Your margin for error becomes so much greater when you could just spend money to fix a problem,” Gonzalez said.
“One thing the Rays are notorious for is when a player starts getting older, they trade that player when he still has another year or two left of control before becoming a free agent, to get young players back. They did it with Blake Snell, and Tyler Glasnow.”
Trading players a year before they hit free agency, or a year too early can sometimes not sit well with a fan base, but the Rays’ fan base has seen it happen so many times that they have to be used to it.
“Granted, they haven’t won a World Series, but it seems like they outsmart everybody,” said Bob Nightengale, a USA Today baseball columnist. “When they trade them at the right time, you can get great value in exchange.”
In the end, winning takes commitment to spending to bring in or keep good players. The Rays have been an anomaly, maintaining success while notoriously not spending big money and continuously flipping players and mixing up their roster.
Putting the Rays aside, it’s clear teams need to spend to win, and some teams are at a natural disadvantage in order to get to this path. Keeping an open market for player contracts with the lack of a salary cap will help the bigger spenders stay spending, and the lower spenders left to find another way to go all the way.
