NEW YORK — Los Angeles established a new Major League Baseball spending benchmark in 2025, investing a combined $515 million in player payroll and luxury tax penalties while capturing their second consecutive World Series championship, according to final calculations released by the commissioner’s office. The franchise is expected to lead league spending again in 2026.
The Dodgers’ 2025 expenditures set new marks with a $345.3 million payroll and $169.4 million in tax penalties, totaling $514.6 million. Even with several player contracts reduced due to deferred payment arrangements, Los Angeles spent seven times more than Miami’s league-minimum $68.7 million payroll and exceeded the combined spending of the six lowest-budget franchises.
Los Angeles surpassed the previous spending record of $430.4 million established by the 2024 New York Mets. The Dodgers’ total also excluded the $6.5 million signing bonus paid to pitcher Roki Sasaki through a minor league deal.
Together, the Mets and Dodgers invested $948.3 million. The spending gap between the five highest and five lowest payrolls grew from a 3.6 ratio in 2021 to an unprecedented 4.7 last season.
Los Angeles broke New York’s three-year reign as the top-spending franchise in 2025, with additional costs including $8.5 million in performance bonuses earned by retiring pitcher Clayton Kershaw.
The Dodgers’ actual spending would have reached approximately $71 million higher without deferred payment structures for seven players that reduced their payroll calculations. Shohei Ohtani’s contract counts as $28.2 million because $68 million of his $70 million 2025 salary won’t be paid until 2035.
New York ranked second in payroll at $342.1 million and spent $433.7 million including tax penalties.
During Steve Cohen’s first five years as Mets owner, the franchise has invested $1.44 billion without securing a championship: $1.11 billion in player salaries and $320 million in luxury tax payments.
Both franchises exceeded the previous payroll record of $333.3 million set by the 2024 Mets.
Based on MLB’s opening-day projections, Los Angeles leads 2026 spending expectations with a $323.3 million 40-man roster payroll and projected $163.7 million tax bill for a $487.1 million total. The Mets started with a record $358.4 million payroll and face an estimated $124.1 million tax for $482.5 million in total spending.
Cleveland carries the smallest opening-day 40-man payroll this season at $75.5 million.
League-wide spending increased 3.1% to $5.32 billion in 2025 from $5.16 billion in 2024, representing a 31.3% rise over four seasons under the current labor agreement from $4.05 billion in 2021.
These totals exclude the $50 million annual pre-arbitration bonus pool established in the 2022 collective bargaining agreement and benefit allocations included in MLB’s luxury tax calculations.
Eight teams began 2026 above the $244 million luxury tax threshold. Following the Dodgers ($415.2 million), Mets ($379.2 million) and Yankees ($339.6 million) were Toronto ($319.5 million), Philadelphia ($315.2 million), Boston ($263.7 million), San Diego ($260.1 million) and Atlanta ($247.9 million).
The Chicago Cubs started $25,000 below the threshold while Detroit began $2.5 million under. Team payrolls fluctuate throughout seasons due to trades and roster adjustments.
New York finished 2025 with the third-largest regular payroll at $301.5 million, followed by Philadelphia ($291.9 million), AL champion Toronto ($253.1 million), Houston ($236.4 million) and Texas ($229.9 million).
Four of the five biggest spenders made the playoffs, excluding the Mets, alongside teams ranked ninth, 10th, 12th, 15th, 17th, 22nd, 23rd and 25th in payroll.
Los Angeles increased spending the most in 2025 by $74.4 million. Other significant increases came from Detroit ($61.9 million), Baltimore ($60.2 million to $165.6 million), San Diego ($45.6 million to $217.6 million), Philadelphia ($42.8 million) and Toronto ($34.7 million).
Fifteen franchises reduced payroll from 2024 to 2025, led by Chicago White Sox (down $66.1 million to $87.9 million), St. Louis (down $39.3 million to $139.1 million), Miami (down $29.4 million to $68.8 million) and San Francisco (down $28 million to $182.9 million). The Cardinals further reduced their opening-day payroll to $102.3 million this year, including approximately $47.4 million from trades involving Nolan Arenado, Sonny Gray and Willson Contreras, who no longer play for St. Louis.
The Yankees decreased payroll by $9.4 million from 2024 to 2025 but increased it to $302.8 million this season.
Eleven teams exceeded $200 million in 2025, matching the record established in 2023. Five teams operated below $100 million, one more than 2024’s record low.
Last year’s regular payrolls reflect 2025 salaries, earned performance bonuses and proportional shares of signing bonuses and non-cash compensation for 40-man rosters. Deferred salary and bonus payments are adjusted to current values, with termination payments, option buyouts and inter-team cash transactions factored in.
MLB calculated the average salary as of Aug. 31, the final day before active rosters expanded to 26 players, at $4,611,595. The players’ association, using different methodology, determined the average at $4,721,393.
Luxury tax calculations use payrolls with average annual values including benefits and the pre-arbitration bonus pool. The players’ association argues tax payments shouldn’t measure spending disparity since half the tax revenue goes to a commissioner’s discretionary fund distributed among revenue-sharing eligible teams that have increased their non-media local revenue.
