The MLB Luxury Tax is a Luxury, Not a Limit: Why Baseball Needs a Hard Cap


If you’re a fan of the other 29 MLB teams, you probably let out a collective groan earlier this week.

The Los Angeles Dodgers, already boasting a roster that reads like a National League All-Star ballot, just signed Edwin Díaz to a 3-year, $69 million deal. This comes less than a year after they grabbed Blake Snell and Roki Sasaki. It’s an embarrassment of riches that highlights the single biggest structural failure in Major League Baseball: the lack of a true salary cap.

I know the counter-argument. We hear it every time this comes up: "Small market owners are just cheap! A cap won't make the Pirates spend money!"

And fair point. But when you look at the raw numbers, the disparity isn't just about being "cheap"—it's about two different leagues playing the same sport.

The $300 Million Gap

Let’s look at the current landscape for the 2025 season.

  • The Ceiling: The Dodgers are projected to carry a payroll pushing $350 million.

  • The Floor: The Oakland A’s and Miami Marlins are sitting at roughly $50 million.

That is a $300 million gap. The Dodgers are essentially fielding seven Oakland A’s rosters at once. When one team can spend 700% more than another, "competitive balance" is just a marketing slogan.

The Evidence: 25 Years of Purchased Titles

Defenders of the current system love to point to the outliers. They’ll talk about the 2003 Marlins forever. But I ran the numbers for the last 25 World Series champions, and the trend is undeniable.

If you aren't spending top-tier money, you aren't winning.

Year World Series Champion Payroll Rank
2025 Los Angeles Dodgers #1
2024 Los Angeles Dodgers(Adjusted for deferred Ohtani money) #2
2023 Texas Rangers #4
2022 Houston Astros #8
2021 Atlanta Braves #10
2020 Los Angeles Dodgers #2
2019 Washington Nationals #4
2018 Boston Red Sox #1
2017 Houston AstrosThe "Tanking Works" outlier #18
2016 Chicago Cubs #6
2015 Kansas City Royals #13
2014 San Francisco Giants #7
2013 Boston Red Sox #4
2012 San Francisco Giants #8
2011 St. Louis Cardinals #11
2010 San Francisco Giants #10
2009 New York Yankees #1
2008 Philadelphia Phillies #12
2007 Boston Red Sox #2
2006 St. Louis Cardinals #11
2005 Chicago White Sox #13
2004 Boston Red Sox #2
2003 Florida MarlinsThe last true "low payroll" champion #25
2002 Anaheim Angels #15
2001 Arizona Diamondbacks #8

The Takeaway: Since the 2003 Marlins miracle, zero teams have won the World Series with a payroll in the bottom third of the league. In fact, in the last decade, almost every winner has been a Top 10 spender.

The NFL & NBA Model

Look at the NFL. The Kansas City Chiefs are a dynasty, but they have to make hard choices. They can't keep everyone. They have to draft well and let star players walk in free agency because they literally cannot pay them under the hard cap. That churn allows other teams to swoop in and sign talent.

In MLB, the Dodgers don't have to make choices. They can keep their homegrown stars and sign the biggest free agents. They hoard talent. When they sign Edwin Díaz to lock down the 9th inning, that is one less elite closer available for a team like the Tigers or the Orioles that might be one piece away from contention.

The Verdict

You can't have a cap without a floor. This is where my proposal addresses the "cheap owner" problem.

  • The Cap: Stops the Dodgers from having a $350M payroll.

  • The Floor: Forces the "Small Market" teams to spend at least $100M.

Right now, we have the worst of both worlds. The rich teams operate in a different stratosphere, and the tanking teams strip their payrolls down to the studs to pocket revenue-sharing checks. A cap-and-floor system squeezes the league into the middle.

We want a league where a team wins because their front office is smarter, their scouts are better, and their development system is superior—not just because their owner's wallet is deeper. Until MLB implements a hard cap, we are just watching a rigged game where the house always has the best odds.



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