All Finance Uncategorized

There's a New Top Spender In Major League Baseball

Dodgers maintain baseball's highest payroll for 2014, ending the Yankees 15-year run.

(Kirby Lee/Image of Sport/US PRESSWIRE)
(Kirby Lee/Image of Sport/US PRESSWIRE)

The New York Yankees historical reign as the biggest spender in the big leagues has finally ended.

When Opening Day begins on Monday, the Los Angeles Dodgers and their $235 million payroll will take the field as Major League Baseball’s most expensive team, according to the Associated Press:

The Dodgers are ending the Yankees’ 15-year streak as baseball’s biggest spenders and as of Tuesday had a projected payroll of $235 million, according to study of all major league contracts by The Associated Press.

 

New York, which last failed to top the payroll rankings in 1998, was a distant second at $204 million. After that, it was another huge gap to Philadelphia at $180 million, followed by Boston at $163 million and Detroit at $162 million. Houston is last at $45 million, up from $27 million at the start of last year, and Miami at $48 million remains 29th.

This new big spending trend has quickly escalated in the last few years under Guggenheim Partners’ ownership of the Dodgers. The ownership group, fronted by Magic Johnson, wasted no time pouring money into the Dodgers once purchasing the franchise in 2012 from the much maligned Frank McCourt.

The payroll explosion has been a direct result of the $8.5 billion, 25-year long television deal with Time Warner Cable that was inked shortly after the purchase, $6 billion of which will be retained by the franchise.

The 2014 Dodgers boast baseball’s highest paid player in Zach Greinke, who is set to make $26 million in salary this year. If you’re wondering about newly minted Clayton Kershaw’s deal, it’s not on the books until 2015, when his salary will trump Greinke’s with a cool $30 million. Kershaw will make $4 million in salary as the Dodgers’ ace this season.

Meanwhile in the Bronx, the Yankees made it known this offseason that they had intentions of decreasing payroll to $189 million in order to reset the team’s luxury tax rate. They then abruptly changed course by going out and spending $465 million on improvements to this year’s roster. Clearly, their decrease in player salaries has little to do with a newfound frugality and everything to do with the relief from Alex Rodriguez’s suspension, that bumped his 2014 salary down to $3 million from $25 million.

As the Associated Press reported, the Major League Baseball average salary is projected to be between $3.95 million and $4 million in 2014. This represents a rise of 8 to 10 percent from last year’s opening average of $3.65 million, and would be the largest increase since 2006 or possibly even 2001. However, when comparing all of the professional sports’ on field earnings the NBA is still tops, with players bringing in nearly $5 million annually on average, according to Forbes.

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