Don’t expect the New York Yankees to match the Los Angeles Dodgers in spending anytime soon, judging from their controlling owner’s recent comments.
Yankees chairman Hal Steinbrenner responded to the Dodgers’ run of recent signings, which has pushed them up to a projected 2025 payroll upwards of $375 million, in an interview with YES Network’s Meredith Marakovits. His answer was something you’d expect to hear from a small-market team, rather than baseball’s financial titan of the past century.
Steinbrenner’s comments, via YES Network:
Q: “You look at the Dodgers, they just continue to spend money. Their payroll almost approaching $400 million. What is going through your mind as you see them continuing to make these big signings?
A: “It’s difficult for most of us owners to be able to do the kind of things that they’re doing. We’ll see if it pays off. They still have to have a season relatively injury free for it to work out for them, and it’s a long season, as you know, and once you get to the postseason, anything can happen. We’ve seen that time and time again. So we’ll see who’s there at the end and if they’re the ones.”
Before we get into the financial dynamics at play here, let’s first note that playing the “we’ll see what happens in the postseason and if they stay healthy” card about a team roughly three months after they decisively beat you in the World Series thanks to a defensive meltdown, with three healthy starting pitchers, is a capital-c Choice by Steinbrenner.
The Dodgers have been the undisputed featured player of the current offseason, to the point that their spending has inspired calls for a salary cap so owners of less lucrative teams don’t have to face pressure to spend to a similar degree.
The team has signed free agents Blake Snell, Teoscar Hernández, Michael Conforto, Tanner Scott, Blake Treinen, Hyeseong Kim and Kirby Yates to contracts totaling $384.5 million, much of it in deferred money. It also nabbed Roki Sasaki, a player barred from signing a major-league contract and was left to pick the team that fit him best. He selected the Dodgers because, well, why wouldn’t you?
Add that to pre-existing mega-contracts like that of Shohei Ohtani ($700 million), Mookie Betts ($365 million) and Yoshinobu Yamamoto ($325 million), and the team is now on track for a CBT payroll of $388.6 million per Cot’s Contracts, which would be the highest in MLB history.
For their part, the Yankees are on track for third in that number at $302.9 million, down from last year’s $316.2 million. When factoring CBT surcharges, the discrepancy in payroll between the Dodgers and Yankees would work out to more than nine figures.
What are the Yankees when they’re getting outspent by the Dodgers and Mets?
Beyond the Dodgers’ spending, the biggest moment of the offseason has been the New York Mets signing Juan Soto to a monster $765 million deal. Neither of those stories are great for the Yankees, who responded with deals for players including Max Fried, Paul Goldschmidt, Cody Bellinger and Devin Williams.
Granted, the Mets still have a ways to go before they match the Dodgers in anything, but both teams seem perfectly willing to outspend the Yankees for the foreseeable future.
For the Mets, it’s pretty simple. Hedge fund billionaire Steve Cohen owns the team and just spent three quarters of a billion dollars to demonstrate he will outbid the Yankees on anything he wants. The Steinbrenners have been running the Yankees like an enormous family business while the Mets are an expensive hobby for Cohen, who is willing to run up a huge deficit because he was much more money from elsewhere in his life.
The Dodgers, meanwhile, have Shohei Ohtani.
You probably saw a lot of people describing Sasaki’s $6.5 million deal as the most outrageous bargain in baseball this decade, but Ohtani’s $700 million deal more than gives it a run for its, well, money. The Dodgers might be getting a player worth, say, $200 million for peanuts in Sasaki, but they might legitimately have a player worth a billion dollars in performance and brand recognition at the price of about $460 million when adjusting for inflation.
The Dodgers don’t get much money from Ohtani jersey sales or streaming games in Japan (both of those revenues are distributed evenly across MLB), but he has made them an advertising powerhouse in his home country and around the world. The Mets might have Soto, the Yankees might have Aaron Judge, but Ohtani is on a different level when it comes to the business side of baseball. There is only one international superstar in baseball, and the Dodgers have him for the next nine years.
However, even if the Yankees are acting like the financial advantage they’ve enjoyed for decades has evaporated, let’s maintain some perspective. Per Sportico’s calculations, the Yankees made $720 million in revenue in 2023, most in MLB (the Dodgers were second at $637 million).
We’ll see how the 2024 numbers shake out in a couple months — the Dodgers could have very well leap-frogged them — but the point is the money should be there if the Yankees want to do what the Dodgers and Mets are doing. The Steinbrenners just happen to have the shortest arms at the rich kids’ table.
Per The Score’s Travis Sawchik’s calculations, the Dodgers were previously spending a significantly larger proportion of their revenue on players than the Yankees were (while the Mets were throwing money to a financially psychotic degree). The problem is the Dodgers might be making just as much money as the Yankees now, if not more. And that’s to say nothing of a robust player-development pipeline that is the envy of MLB.
You can run your team like a straightforward business or treat it as if it’s more than a business, as it is to many fans. You just can’t do the first while claiming the second, and that’s where resentment toward many owners comes from.
Hal Steinbrenner is right about something, at least
The area where Steinbrenner is not wrong is that anything can happen in the postseason.
The Dodgers are the strong favorites to win the 2025 World Series, but they aren’t odds-on favorites like the Golden State Warriors were when they brought in Kevin Durant. That’s not how baseball works.
BetMGM currently has the Dodgers at +250 odds to win this year’s Fall Classic, well ahead of the second-place Yankees at +800. However, +250 odds works out to an implied probability of 28.6%. So the oddsmakers are acting as if there’s nearly a three-quarters chance that something goes fatally wrong for the Dodgers between now and November.
If that happens — if the Dodgers’ injury woes prove insurmountable, or their bats go cold or they face the wrong team at the wrong time — the sport might not look as unfair as the salary cap-hungry owners want it to.
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