The unprecedented spending this offseason is unlike anything we’ve ever seen in Major League Baseball. The biggest example is the Juan Soto sweepstakes, where Soto signed a record-breaking 15-year, $765 million contract with the New York Mets — the largest deal in professional sports history. This contract includes $75 million in signing bonuses and is fully guaranteed with no deferred payments. Additionally, Soto has the option to opt out after five years. His deal also comes with significant performance bonuses, including $500,000 for winning the award for Most Valuable Player and $1 million for each additional MVP award he earns.
The Mets now face the challenge of pushing their payroll deep into luxury tax territory. However, the luxury tax is the closest thing MLB has to a salary cap, and for their multi-billionaire owner Steve Cohen, it’s akin to finding a crumpled dollar bill in an old jacket pocket.
While the Mets and Soto dominated headlines, the Los Angeles Dodgers quietly had one of the most expensive spending sprees in free agency. Their major acquisitions included Blake Snell, who signed a five-year, $182 million deal; Teoscar Hernández, who joined on a three-year, $66 million contract; and Ha-Seong Kim, who agreed to a three-year, $12.5 million deal. The Dodgers also secured Roki Sasaki on a six-year contract, with his 2025 salary set at the rookie minimum and future terms still to be determined due to his amateur international free-agent status, along with $6.5 million in signing bonuses. Additionally, they signed Tanner Scott for four years at $72 million, Kirby Yates for one year at $13 million, Enrique Hernández for one year at $6.5 million and Clayton Kershaw for one year at $7.5 million.
With these signings, the Dodgers’ payroll has ballooned to $392 million, accompanied by an additional $140 million in luxury taxes. However, they have structured over $1 billion in deferred payments, allowing them to continue signing top talent while maintaining financial flexibility in the long run. The reigning champions are going all-in, aiming to win back-to-back World Series titles, something that hasn’t been accomplished in over two decades.
Unlike Cohen, who has openly embraced aggressive spending, Dodgers owner Mark Walter has never made public comments about financial matters. Dodgers president Stan Kasten has attributed their spending power to continued fan support, emphasizing its importance in their pursuit of talent. The Dodgers also prefer to frame their spending as “investments” rather than simply throwing money at players, reinforcing their long-term commitment to sustained success.
At the end of the day, it’s the responsibility of owners and front offices to build teams capable of long-term success, and MLB’s lack of a salary cap allows for this strategy more than any other major sports league. For comparison, the NHL has a hard salary cap of $87.7 million, except for Long-Term Injury Reserve exemptions, with a cap floor of $65.5 million and no luxury tax. The NBA operates with a soft cap of $141 million, allowing teams to exceed it under specific conditions, with a luxury tax threshold of $172 million that imposes stricter penalties as teams spend more. The NFL has a hard cap of $255.4 million per team but allows contract restructuring and signing bonuses for flexibility.
The Dodgers have broken no rules this offseason. They’re leveraging their financial strength, but their spending has drawn significant criticism from rival teams and fans. The concern is that franchises like the Dodgers, with seemingly unlimited resources, are creating an anti-competitive environment. Currently, only nine MLB teams are projected to have a payroll exceeding even half of the Dodgers’ total. This disparity highlights the growing financial divide between large-market and small-market teams, leading many smaller-market owners to push for a salary cap in the name of competitive balance.
However, the MLB Players Association has repeatedly opposed salary cap discussions, arguing that it would restrict player salaries. The Chicago Cubs owner Tom Ricketts has been vocal about the challenges of competing financially with teams like the Dodgers, calling the financial gap “disheartening” for both teams and their fan bases.
At this point, it’s hard to argue against the Dodgers as World Series favorites. While winning a championship is never guaranteed — injuries and adversity always play a role — the sheer depth and talent they’ve assembled give them a significant edge over most teams. In many cases, their backup options are better than some teams’ starting lineups.
The salary cap debate will continue as long as MLB remains the only major league without one. What we do know is that the current collective bargaining agreement expires on Dec. 1, 2026. Many owners and fans will continue advocating for a cap to address financial disparities, while the players’ union remains staunchly opposed. MLB Commissioner Rob Manfred has acknowledged concerns about the Dodgers’ spending but defended their right to operate within the rules. However, he also noted that the issue could be revisited in future collective bargaining discussions.
For many fans, MLB’s lack of a salary cap is part of its appeal. But if the league wants to maintain its integrity and competitive balance, it may be time to reconsider what financial regulations could do for the future of baseball.
