You’d think after a century of professional baseball, we’d have a simple answer to the question: does spending the most money actually work? Honestly, the 2025 season just made that answer a whole lot more complicated.
If you’re a fan of the Los Angeles Dodgers, you’re probably feeling pretty smug right now. They basically turned the league into a video game on "easy" mode. After winning the World Series again in 2025, the Dodgers proved that if you have deep enough pockets to sign Shohei Ohtani, Mookie Betts, and Freddie Freeman, you can pretty much weather any storm. But if you look at the rest of the MLB team payrolls 2025 rankings, you’ll see that the "pay to win" strategy is a lot more fragile than it looks.
Take the New York Mets, for example. Steve Cohen spent like he was trying to buy the moon, ending the year with a payroll hovering around $347 million once the final accounting was done. They missed the playoffs. Just imagine spending nearly $350 million on a roster, plus paying over $90 million in luxury taxes, only to watch October from your couch. It’s brutal.
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The 2025 Spending Hierarchy: Who Blew the Budget?
The gap between the haves and the have-nots has never felt wider. In 2025, we saw nine teams cross the Competitive Balance Tax (CBT) threshold of $241 million. This isn't just a slap on the wrist anymore. The Dodgers’ total bill for the year—payroll plus their massive $169.4 million tax hit—crossed the $580 million mark. To put that in perspective, the Dodgers' tax bill alone was higher than the entire active payroll of the bottom 12 teams in the league.
Here is how the top of the mountain looked at the end of the 2025 campaign:
- Los Angeles Dodgers: $417 million (CBT Payroll)
- New York Mets: $347 million
- New York Yankees: $320 million
- Philadelphia Phillies: $314 million
- Toronto Blue Jays: $286 million
The Blue Jays are actually the most fascinating story here. They jumped into the top five, went over the tax threshold for the second straight year, and rode that spending all the way to a World Series loss against the Dodgers. It was a "worst-to-first" type of roar for Toronto, proving that strategic spending can actually fix a sinking ship if you target the right holes. They didn't just throw money at names; they built a rotation that could actually survive the AL East gauntlet.
The Ohtani Effect and Contract Deferrals
We can't talk about MLB team payrolls 2025 without mentioning the "Ohtani loophole." While Shohei Ohtani's contract is technically worth $70 million a year, the Dodgers only saw a fraction of that hit their actual CBT number because of the massive deferrals. This allowed them to go out and sign guys like Blake Snell and Tyler Glasnow while other teams were "crying poor."
It’s a bit of a cheat code. By deferring $68 million a year until 2034, the Dodgers basically bought themselves a decade-long window of dominance. Other owners are furious about it, but hey, it’s legal under the current Collective Bargaining Agreement.
The Basement: Life Below $100 Million
While the Dodgers are out here playing with $400 million, the Miami Marlins and Chicago White Sox are basically operating on a shoestring budget.
- Miami Marlins: $87 million
- Chicago White Sox: $92 million
- Tampa Bay Rays: $103 million
- Pittsburgh Pirates: $109 million
- Oakland (Athletics): $118 million
The Athletics are a weird case. They’re the "Moneyball" originators, but lately, they’ve just been the "No Money" team. In 2025, their payroll stayed near the bottom despite their impending move. It’s a tough sell for fans.
Then you have the Tampa Bay Rays. They are the perennial outliers. They consistently run payrolls in the bottom five but somehow manage to win 90 games. In 2025, they were once again in the mix for a Wild Card spot with a payroll that wouldn’t even cover the Dodgers’ infield. It makes you wonder why teams like the Angels—who spent over $221 million this year—can’t seem to figure it out. The Angels finished 2025 with a losing record despite having one of the highest payrolls in the American League. It’s almost impressive how much they struggle to convert dollars into wins.
Why the Luxury Tax Matters Now More Than Ever
The luxury tax, or the Competitive Balance Tax, is supposed to be the "great equalizer." For 2025, that base threshold was $241 million. If you go over, you pay a percentage. If you stay over for three years in a row, like the Dodgers, Mets, and Yankees, you get hit with a 50% tax on every dollar over the limit.
But there’s a hidden catch: the "Steve Cohen Tax." If you go $60 million or more over the threshold, you don’t just pay money—your highest draft pick gets moved back 10 spots.
For the New York Yankees and Philadelphia Phillies, this is a major headache. The Phillies have one of the oldest rosters in the league. They need young talent, but because they keep spending to keep their window open, they’re effectively sabotaging their own farm system by pushing those draft picks down the board. It’s a cycle that usually ends in a very painful "rebuild" decade.
Actionable Insights: What This Means for Your Team
If you’re wondering where your team is headed in 2026, the 2025 payroll numbers tell the whole story.
- Look for the "Reset" Teams: The Atlanta Braves, San Francisco Giants, and Chicago Cubs all managed to dip just below the tax line in 2025. This was a tactical move. By resetting their "repeater" status, they can now go back to spending big in the 2026 offseason without the 50% penalty. Expect them to be the big movers in the next free-agent market.
- The Orioles are Coming: Baltimore spent over $200 million in the most recent offseason, a massive jump for them. They signed Pete Alonso to a $155 million deal. They aren't the "cheap" O's anymore.
- Watch the Blue Jays' Pivot: Toronto is at a crossroads. They spent big, made the World Series, and lost. Now they have aging stars and a high tax bill. They’ll likely have to decide by the 2026 trade deadline whether to double down or start a "soft" rebuild.
Basically, the 2025 season proved that money is a tool, not a guarantee. You can buy your way into the conversation—just ask the Mets—but you can't buy your way out of a bad bullpen or an aging roster. As we look toward 2026, the teams that reset their taxes this year are the ones holding all the cards.