The New York Mets reached an agreement overnight to sign Carlos Correa to a $315 million, 12-year contract, pending a physical. It was a sharp reversal for the shortstop—and his agent, Scott Boras—who had agreed to a $350 million, 13-year deal with the San Francisco Giants, but that signing was delayed after a physical exam.
“We need one more thing, and this is it,” Mets owner Steve Cohen told the New York Post, which was the first to report the agreement. The signing means the Mets will likely spend nearly $500 million in 2023 on their payroll, luxury tax and benefits. Their $113 million projected tax, according to salary tracker Spotrac, would be $70 million higher than the previous record.
The Mets are likely to lose more than $200 million next season, but it is a rounding error for Cohen, who is worth $17.5 billion, according to Forbes and three times more than any other MLB owner. His net worth is up $3.6 billion over the past two years.
Cohen bought the Mets for $2.4 billion in Nov. 2020 after being approved by a 26-4 vote by owners. Existing owners liked the record sale price Cohen was paying, but there was consternation among some owners that Cohen would use his vast wealth to outspend everyone else.
The 2022 collective bargaining agreement added a fourth tier to its luxury tax thresholds that was nicknamed the “Cohen tax” by many. It calls for an 80% tax on payrolls over $290 million. “It's better than a bridge being named after you," Cohen quipped at spring training.
The New York Yankees and Los Angeles Dodgers have historically been the biggest luxury taxpayers, with 50% of the proceeds shared by the non-taxpaying teams. They accounted for all but one of the 14 instances of teams with a tax bill of at least $25 million. The exception was the Mets last season, who are on the hook for an estimated $29.9 million bill once final figures are announced.
The Amazins will pack Citi Field next season with stars Correa, Francisco Lindor ($32 million salary), Max Scherzer ($43.3 million), Justin Verlander ($43.3 million) and Edwin Diaz ($17.3 million) on the field. But they have no chance to generate enough revenue to cover their huge expenses. In addition to the major league payroll, expenses to run the club and operate the stadium are more than $200 million, including a $44 million annual PILOT payment to pay off stadium construction of Citi Field, which opened in 2009.
Major League Baseball is the only one of the Big Four sports without a salary cap or floor. The luxury tax is meant to act like a cap but hasn’t deterred Cohen. Meanwhile, the lack of a floor is more glaring as smaller teams sign cheaper, unproven players and hope to get lucky rather than compete with the likes of Cohen and Co. Based on current rosters and payrolls, the Mets will have 13 players making at least $10 million in 2023. The Baltimore Orioles and Pittsburgh Pirates both have one player making exactly $10 million. The Oakland A’s top salary is $7 million.