High on the list of what makes compact Toronto Blue Jays catcher Alejandro Kirk (5 years, $58 million), remarkable is his build: officially standing five feet, eight inches, he weighs 245 pounds and looks even rounder when he squats in the batter box. How little Kirk looked like a major league ballplayer when he was discovered on a showcase circuit in Mexico—and how thoroughly Blue Jays executives and scouts had to be forewarned about his atypical body composition—came to serve as announcer Joe Davis’s leitmotif for Kirk’s at-bats, a pet anecdote that over a long series can begin to try the spectator’s patience. Thankfully, as Kirk dug in for his final plate appearance of the 2025 World Series in the home half of the eleventh with his team down a run, the moment was too big for Davis to marvel once again at the tremendous athletic diversity of professional baseball. John Smoltz, the booth’s color man, only referenced Kirk’s unusual physique euphemistically and, as it turned out, prophetically, noting that the Dodgers infield was playing back because the six-hole hitter was a “double-play candidate.” A broken-bat ground ball up the middle was fielded by Dodgers shortstop Mookie Betts (12 years, $325 million) who stepped on second before firing the ball to Freddie Freeman (6 years, $162 million), thereby securing the Dodgers the distinction of baseball’s first back-to-back championships since the millennium Yankees. A shot of a tearful Vladimir Guerrero Jr. (14 years, $500 million), the Blue Jays’ charismatic first baseman, stranded on third after a lead-off double, offers a poignant negative to the Dodgers’ enthusiastic celebration on the synthetic Rogers Centre turf.
If the Blue Jays managed to hold onto the lead opened up by Bo Bichette’s (3 years, $33 million) three-run homer off of two-way phenom Shohei Ohtani (10 years, $700 million), or if they had not squandered any number of late chances—most notably a bases-loaded, one-out opportunity in the bottom of the ninth—it’s likely that Guerrero, affectionately known as Vladdy, would have been named World Series MVP. That said, so many Blue Jays players vastly outperformed expectations that there would have been compelling cases to be made for third-baseman Ernie Clement (1 year, $3.5 million), who over the course of 18 games racked up the most hits in single postseason in history, or clutch-hitting outfielder Addison Barger (1 year, $760,000). Instead, the honor went to Dodgers ace Yoshinobu Yamamoto (12 years, $325 million), who threw a complete game for a Game 2 victory, earned the win in Game 6 after surrendering only one run through ninety-six pitches over six innings, and tossed the last and two-thirds to close out the series on zero days’ rest.
For some time now, the major American sport leagues have endeavored to claim more of the calendar for their respective products, crafting the business of sports into a spectacle of its own which can, for certain segments of the fanbase, provide more entertainment and storylines than brumous regular season contests. It would seem natural then that the baseball world’s attention turned to the expiration of the MLB’s collective bargaining agreement almost immediately after (and in some cases before) Yamamoto struggled to hoist the Willie Mays trophy over his head. Putting aside the fact that the CBA isn’t set to expire until next postseason, with any potential lockout imperiling the 2027 season at the earliest, what has been notable about this particular business-as-spectacle drama is how it cast the Dodgers’ playoff run not only as indicative of a potential lockout, but as almost causative of a forthcoming labor dispute. If LA repeated, the argument goes, the other owners, bolstered by a public weary of the Dodgers’ lavish spending (their 2025 payroll was $394 million, the highest in the league), would be more than willing to sacrifice some or all of the 2027 season in their tenacious pursuit of a salary cap. Conversely, if the Blue Jays ($258 million, 5th highest) prevailed and baseball’s streak of nonconsecutive champions was preserved, the owners might find fans less receptive to their agitation and more partial to the players’ steadfast resistance to any sort of pay ceiling.
More naive is the notion that a Blue Jays’ victory would have rendered this argy-bargy moot. Even if the Milwaukee Brewers ($123 million, 22nd in the league), of the club with the best regular season record and the model of a savvy small-market team, had managed to defeat the spendthrift Dodgers in the National League Championship Series and thereby proved that a blank check is less powerful than a motley crew of fellas who believe in one another, the owners’ primary demand in negotiations with players would have doggedly remained an upper limit on spending. The fact that the second-highest spender, the New York Mets ($340 million), failed to make the playoffs at all, and the third, fourth, and tenth most profligate clubs (the Phillies, Yankees, and Cubs, respectively) all lost in the Division Series, lends some credence to the claim that correlation between spending and success is clear but not strong.1 It is no coincidence that every other major American sports league has a salary cap; granted cartel privileges usually proscribed by laws to promote competition and prevent collusion, owners of sports teams clearly see a salary cap as in their collective and individual interests. That baseball players have managed to defy the imposition of this formalized gentleman’s agreement among the owner class is partially explained by an “established aberration,” as described in the 1972 opinion of Supreme Court Justice Harry Blackmun, which in 1922 granted baseball as a business an exemption from antitrust legislation, a privilege not enjoyed—at least not to the same extent—by other sports leagues.
This so-called aberration originated in a spat between owners of competing leagues, and hinged in no small part on aspersions cast on Baltimore’s viability as a major league city. Federal Baseball Club of Baltimore v. National League of Professional Clubs (1922), brought by Ned Hanlon, owner of the Baltimore Terrapins, part of the recently defunct Federal League, alleged that the owners of the National League and Federal League had colluded unlawfully, resulting in an agreement where some Federal League teams were allowed to join the National League while others—not seen as major enough for the major leagues—were offered a monetary settlement. Initially successful in the lower courts and awarded trebled damages in accordance with federal antitrust legislation, Hanlon’s suit was ultimately struck down in a unanimous Supreme Court decision on the basis that baseball did not affect interstate commerce and therefore was not subject to federal antitrust laws. Baseball was, according to the majority opinion penned by Justice Oliver Wendell Holmes, a “purely state affair,” the fact that teams had to cross state lines a “mere incident.” It is worth pointing out, of course, the threat that the Federal League posed that led to the National League’s hasty settlement that so rankled Hanlon’s Baltimorean pride, had much to do with the unwelcome competition for a player’s service, which might lead to higher salaries. A rival, unaffiliated league, if successful, would have also provided a player an alternative to the reserve clause, through which a team could renew a player’s contract indefinitely, with or without the player’s consent. A team could also trade a player’s contract, including this right of indefinite renewal. To refuse the reserve clause meant only one thing: retirement.
There were periodic challenges to the legality of the reserve clause system, most notably in Flood v. Kuhn (1972), wherein St. Louis Cardinals star centerfielder Curtis Flood, whose contract had been traded to the Philadelphia Phillies, challenged the reserve clause on antitrust grounds. It was in his majority opinion against Flood that Blackmun deployed the aforementioned euphonious phrase, reaffirming baseball’s special status in the eyes of the law. While players in other leagues found some success in petitioning the courts, baseball was beholden to a strikingly convoluted legal aberration that haunted each and every appeal.
By foreclosing the judicial system as a pathway to redress grievances, this aberration, along with the unwillingness of the legislative branch to take action (as opposed to its, using Blackmun’s phrase again, “positive inaction”) helped turn the Major League Baseball Players Association, under the leadership of Marvin Miller, into one of the most powerful unions in the country. The late Roger Abrams, Northeastern University law professor and preeminent sports legalist, suggests that “the players effectively instituted by contract a private regime prohibiting the same collusive conduct by the owners that would have been proscribed by the antitrust laws had those laws applied to the baseball enterprise.” Following the Flood case the MLBPA advocated for and won various concessions from the owners, including the establishment of an arbitration process for salary disputes in 1974. In 1975, when the reserve clause was once again challenged by the Players Association and Dodgers’ pitcher Andy Messersmith, the case was heard in this “private regime” of arbitration and, out of the shadow of judicial precedent, was found to have a much more limited scope, giving a team the opportunity to renew a player’s contract not perpetually but once. Despite marking the beginning of free agency, the 1975 arbitration ruling did not put an end to collusion amongst the owners to the detriment of the players. A decade later, owners across the league would collectively rebel for three consecutive free agency periods. After largely refusing to pursue free agents in 1985, 1986, and 1987, the owners were found by an arbitrator to have violated the CBA and were forced to pay out nearly $300 million in damages to the players, distributed at the behest of the MLBPA.
The end of official or acknowledged collusion among the owners did not lead to enduring labor peace. After the initial CBA expired, a week-long lockout in 1990 led to a stop-gap contract, which in turn expired before the start of the ’94 season, half of which was played without any agreement in place. Midway through the season, with no contract forthcoming—players and owners were most at odds over the new revenue sharing plan proposed by ownership—the players went on strike, canceling the rest of the season and the World Series. This strike would last until the beginning of the ’95 season, when then–District Court Judge Sonia Sotomayor ruled in favor of the players in their NLRB complaint against ownership, forcing both parties to revert to the expired CBA; the union had agreed to return to work if the ruling had gone their way. The return to play did not mean a return to fan favor and attendance, and the ’94 strike is seen, perhaps speciously, as the start of baseball’s real decline in prominence in American popular culture. The next CBA would introduce a luxury tax (officially known as the Competitive Balance Tax), an imposition on high-spenders that the league hoped might function as soft cap, punting the problem to the future and laying the groundwork for contemporary baseball’s looming labor dispute.
It remains to be seen if the owners will show much solidarity in their pursuit of a salary cap when the current CBA expires. There is an ironic similarity between arguments in support of a salary cap and those made for the preservation of the reserve clause, namely the need for some kind of mechanism to stop rich teams from overwhelming poor ones with bought talent. For the majority of players, those that are not signing decade-long deals worth hundreds of millions of dollars, a cap may seem like a reasonable concession if it leads to a team salary floor that forces penny-pinchers to open their checkbooks, shorter service time requirements to hit free agency, higher minimum salaries, and so on. However, because of their aberrant lineage and the fact it has held out this long, baseball players have had the opportunity to observe how other professional athletes have fared in capped-system sports. As ESPN’s Jeff Passan points out, the revenue split reserved for the players in the NFL, NBA, and NHL has only shrunk over time, falling, in the case of football, from 64 percent in 1994 to 48 percent today.
If the enshrinement of a salary cap does not yet feel entirely inevitable, the prospect of a lockout does, at least amongst the baseball commentariat. Be they major journalists, minor league content-aggregators, or yeoman engagement-farmers, the tenor is the same: the situation has gotten out of hand, and the mythical fan, an amalgamation of conventional wisdom and vibes transubstantiated into hypothetical flesh and blood, is now for the first time starting to side with management over labor. How short our historical memories are; during the era of the Evil Empire, not Reagan’s but the other one in the Bronx of the late ‘90s and early 2000s, when the Yankees dominated baseball in a manner not seen since, well, a previous iteration of the Yankees, ESPN reported that 84% of fans wanted a salary cap, a much higher percentage than even the most liberal current estimates.
Still, one must admit it feels like things have changed. This is not, however, so much a consequence of the Dodgers being the first team to win back-to-back world series since that aforementioned Evil Empire. In fact, since the decline of that Yankees team baseball has seen something like its own end of history: an age of relative parity, at least among the league’s best teams, with each regional power taking its turn, fairly divvying up World Series titles as part of a rules-based baseball order (excepting the Houston Astros). What has changed isn’t the relative dominance of any one team but the glaring imbalance of team payroll caused almost entirely by a rapid increase in contract size for the game’s best players that far outpaces inflation. This sudden and historically unprecedented rise in contract cost has raised the ire of small market fans and, crucially, small market owners, suggesting that there may be more conflicts at play here than just the mutual antagonism of capital and labor.
While baseball ownership is the exclusive domain of the very richest, the composition and character of the owners’ respective fortunes are relatively varied. There are, broadly speaking, three categories of owners: those who made their money in finance (Steve Cohen of the Mets, Mark Walter/Guggenheim Partners of the Dodgers, John W. Henry of the Red Sox); those who made their money from regional business concerns (the Ilitch family, who own Little Caesars as well as the Detroit Tigers; Bob Nutting, a local paper and resort magnate and the owner of the Pittsburgh Pirates); and the heirs whose primary concern is managing their inherited franchises (Hal Steinbrenner of the Yankees, Mark Lerner of the Nationals).
It would be overstating the case to claim that ownership category correlates exactly to team payroll, but some patterns do start to emerge. Broadly speaking, the top ten teams in 2025 payroll tend to be owned by individuals who made their money in the world of hedge funds, asset management, or private equity, whereas teams in the bottom ten are primarily owned by proprietors of local agribusiness, logistics companies, or real estate concerns. Some notable exceptions include, at the top of the ledger, the Phillies, who are partially owned and managed by the scion of a pipe tobacco fortune, and, at the bottom, the Miami Marlins, who are owned by the cofounder of a wealth management company.
It should be stressed that so far we have only been speaking of principal owners, few of whom actually own their teams outright. There are interesting exceptions here, such as the Blue Jays, owned entirely by Rogers Communications, but overall ownership groups tend like most companies to consist of both principal and minority owners. Since 2019, MLB has allowed private equity and other institutional investors to purchase minority stakes in teams from part-owners in response to, among other market pressures, the difficulty of offloading a billion-dollar-plus partial stake in a team—the stratification of wealth in America is such that it’s easier to find a billionaire willing to buy a controlling stake in a team than to find a multimillionaire willing to shell out far less for minority ownership.
The league’s rules limit how much a single private equity fund can own of any given team (15 percent) and what percentage of a given team can be held by private equity (30 percent). However, unlike individual owners, there is no requirement of exclusivity: private equity firms can invest broadly across multiple baseball franchises, and some have. Arctos Partners, a firm that specializes in “bespoke liquidity solutions and growth capital,” owns parts of, inter alia, the Red Sox, Padres, Astros, Giants, Cubs, and Dodgers, as well as MLS’s Portland Timbers and the NBA’s Sacramento Kings and Utah Jazz, alongside investments in European soccer and the NHL. At present, PitchBook lists eight teams as “PE-backed” and another ten as “PE-affiliated,” typically through the majority or minority ownership of an individual whose fortune derives from private equity. Adding those figures up gives us over half the league—a surprisingly high number to those still operating under the assumption that sports franchise ownership is primarily a vanity project for regional tycoons.
As the list of Arctos investments demonstrates, MLB is not alone in opening up to private equity; all other major American men’s sports leagues have followed suit. NBA franchises appear at the moment to be the most popular vehicles for private equity affiliation, with twenty of the thirty teams having some connection to that industry. NBA franchises are on average worth twice as much as MLB teams, NBA viewership trends more towards the coveted 18–34 demographic, and the NBA possesses a newly cemented, highly lucrative TV deal and durable labor peace both currently absent in baseball. Along these lines, opinion currently seems to be divided as to whether or not private equity sees baseball as a productive investment—in recent, conflicting reporting, CNBC offered us a comment from one senior advisor, either ominous or alien, to the effect that baseball is “a great asset with great sports content,” as well as a private equity partner’s concern that “institutional investors aren’t going to commit and risk their capital when all it means is it’s helping to fund an arms race of talent.”
Though private equity investment has not necessarily been the bonanza the league may have hoped it would be, it does demonstrate a new conception of what exactly a sports franchise is and where its value derives from shared by a segment of current owners. This new understanding of franchise value sees it as stemming not primarily from the yearly revenue of the team, but rather from the team as itself a financial asset. While MLB franchises have seen modest growth in yearly revenue (2020 excepted), the growth in their respective valuations has outpaced any such increase. This is part of a broader trend across sports, exemplified by the NBA’s Golden State Warriors, which went from being valued at a paltry $315 million in 2009 to over $11 billion this year. According to Arctos—who certainly have a vested interest in pushing sports investment—sports franchises have on average outperformed stocks over the past ten years. This sudden rise in valuation, disproportionate to actual revenue, has been notable enough that Arctos has tried to proactively refute accusations of a speculative bubble.
The Warriors offered a relatively straightforward template to those teams willing to listen: if you acquire players that are really good, your team will be really good; if your team is really good, it will become a cultural sensation and rise in value. There are specifics which need to be accounted for (questions of media rights and stadium ownership), but the model, such as it is, appears replicable. It was attempted by the hapless Brooklyn Nets, though vaccine-skepticism and injuries prevented that experiment from truly succeeding. (While it lasted, however, the Durant Nets jersey was an international bestseller, which the NBA used, along with the connections of Nets owner Joe Tsai, to push for an increased foreign presence for the team, especially in China, somewhat analogous to that of the Dodgers in Japan.) The NBA’s byzantine rules regulating player compensation put an upper limit on an owner’s ability to outright buy a championship team, but in baseball, with its own distinct and highly contentious labor history, a salary cap, and therefore that upper limit for ownership, is absent.
MLB’s consistent increase in payroll spending—the vertiginous year-over-year increase in contracts awarded to the game’s top players—may therefore be better understood not as a direct result of private equity investment, but as decisions made by owners whose financial worldviews were formed by private equity and high finance, or decisions made by owners in anticipation of future institutional investment and partial ownership. This group of owners—whose teams routinely top out payroll spending—are what we might facetiously label the “historically progressive” group, in a purely descriptive sense. Unlike the owners still operating under a rentier model—trying to keep payroll as low as possible to maximize the amount of money made from TV, ticket sales, etc.—who were the historic backbone of the cartel that colluded to depress the value of free-agency contracts, this newer group of owners is breaking with the feudal model in their willingness to offer high-level free agents as much money as possible.
The initial objection to our characterization is that big-market spending has been part of the sport since the introduction of free agency—after all, the luxury tax was introduced to combat similar spending by the Yankees of the late 1990s. While that level of spending was certainly notable at the time and did, alongside Alex Rodriguez’s massive contract with Texas Rangers, lead us towards our present moment, that does not explain why the ten biggest free agency contracts in MLB history have all occurred in the last five years.2 The other objection might be inflation—and while it certainly does play a part, it also is not a sufficient explanation for ballooning free agent contracts. The biggest contract before 2019 was Giancarlo Stanton’s 13-year, $325 million signing; in 2025 it is the gargantuan 15-year, $765 million deal Juan Soto inked last December. Two of the three biggest contracts of all time were signed this past offseason. Adjusted for inflation, Stanton’s contract moves up from twelfth place to fourth, but it’s still hundreds of millions less than the top three. The only other contract from before 2019 in the top twenty is A-Rod’s Rangers deal which, inflation adjusted, still wouldn’t beat out Soto, Ohtani, or Guerrero. There are currently players who may not make the Hall of Fame making more money year over year than Barry Bonds (who, to be fair, is also not in the Hall of Fame—though he should be!).
It seems clear then that this sudden explosion in player compensation is connected to the idea that it may be worth compromising revenue in the short term to increase valuation in the long term, not to flip the team entirely, but to create more lucrative opportunities to sell minority ownership to institutional investors. One might fairly claim that not all splashy owners are driven by a ruthless drive for asset values; Steve Cohen could be cited as an owner emblematic of an older model devoid of high-finance speculation or base rent-seeking. Cohen, in this telling, is a man striving to make his childhood team as successful as possible with the resources to do so. In response, we might refer to Marx’s observation that “competition makes the immanent laws of capitalist production to be felt by each individual capitalist, as external coercive laws.” We may need to do some tinkering here—substituting for the broader laws of capitalist production laws more specific to the realm of sports, and thinking in terms of the progressive accumulation of wins above replacement rather than capital—but the point still stands: In an optimized and financialized landscape, even owners who “just want to win” experience the laws of roster production as external coercion.
There is the question of real estate which, alongside sport, market, and brand, needs to be factored into any team’s valuation. While traditionally real estate would refer only to the ballpark itself, the development of mixed-use projects by the Braves’ ownership group on land adjacent to Truist Park or the construction of high-density luxury housing on land shared by the Barclays Center demonstrate the various ways that sports ownership has expanded beyond its traditional realm. With this in mind, and considering Steve Cohen’s aggressive bid for a casino adjacent to Citi Field, should we still view his investment in the Mets as purely altruistic?
Understood thusly, the upcoming dispute over a salary cap is not only a conflict between labor and capital (which it certainly is), but also a conflict between capitalists: a dispute between the faction of owners whose primary aim is to increase the value of their franchise as a speculative asset, and the rentier owners seeking to minimize spending to maximize year-over-year revenue. There are of course also a number of middle-of-the-road owners who spend, but not unreasonably so, but the upcoming labor conflict seems primarily to be one that pits the ownership philosophy of the Uber board of directors against the ownership philosophy of a local Applebee’s franchise. Private equity may be hesitant to invest large amounts of money in a franchise which will be reinvested in a process of progressive accumulation—wary, perhaps, because Uber and other start-ups like it have heretofore failed to convert constant spending into predictable yearly revenue—but it still serves the interests of these new owners to increase spending in anticipation of potential future investment or other, more bespoke forms of financial chicanery.
But how about those Dodgers?
Of the 12 clubs that qualified for the postseason, all but three—the Cincinnati Reds ($119 million, 23rd), Cleveland Guardians ($102 million, 25th), and the Brewers—were in the top half of the league by payroll. ↩
The ludicrous deferral rules for contracts should also be noted as an obvious accelerant to the big-pay-day bonfire, allowing teams to substantially mitigate their league-imposed luxury tax bills and thereby increasing their flexibility in roster construction. The Dodgers are the most flagrant practitioners of this strategy: Shohei Ohtani has $680 million of his $700 million contract deferred, Mookie Betts $115 million of $365 million, and Freddie Freeman $57 million of $162 million; and this is not an exhaustive list. According to Dodger Nation, “the Dodgers have accrued $1.039 billion in deferred money in the last half-decade.” ↩
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