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Steve Cohen's Mets Spending Spree and the Ramifications for the Rest of the League

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Most major league owners treat their teams like businesses. Steve Cohen, said one of his former employees, approaches the Mets as something else entirely.

“The way he sees this business is very different from his hedge fund,” the official said on Wednesday. “It’s more like he buys art. And he spends whatever it takes on art. The guy has a billion dollars worth of artwork in his house. He succeeds because he can.”

As baseball’s wealthiest owner, Cohen is in a better position to build a superteam than anyone else. But the landlords’ fraternity generally does not look kindly on those who leave the pack, especially when it raises costs for them.

“I think there will be consequences for him in the future,” said an employee of another major league team who was not authorized to speak publicly. “There is no collusion. But… there was a reason why, for years, nobody broke $300 million. You still have partners and there is a system.”

Cohen’s choice to increase his payroll to more than $380 million before luxury tax penalties — with a 12-year, $315 million contract with Carlos Correa his latest award — has already polarized the industry. He’s not just going over $293 million, which is the fourth and highest tier of the competitive break even tax – the penalty tier introduced to the sport in March that was immediately dubbed the “Steve Cohen tax”. He took his payroll to a total level the sport has never seen. And when it comes to his peers’ spending, Cohen is an outlier the game hasn’t seen since George Steinbrenner.

To at least two other groups, Cohen is a blessing: Mets fans, for example. And players. Cohen wants to win, which the players love. But your spending also increases your overall markets and transportation.

Carlos Correa (Jeffrey Becker / USA Today)

Why have baseball players and their union fought the salary cap for so long? The news you woke up to on Wednesday morning is one of many reasons why. The Mets almost certainly couldn’t sign Correa this winter in a cap system. Another Steinbrenner could never spend again, period.

Steinbrenner’s son, Yankees president Hal, has been more secretive about his spending than either his father or Cohen. After a press conference for Aaron Judge on Wednesday, he said he had no regrets about voting for Cohen to become owner.

“I don’t think I ever regretted voting for any owner,” Steinbrenner said.

When a reporter told Steinbrenner that Cohen’s overnight deal with Correa had “amplified” the Judge’s announcement, Steinbrenner looked amused.

“That sounds ugly: bigfoot, what does that mean?” he said. “This does not bother me. Look, Steve has put together a great team. We also have a great team. So it doesn’t bother me. The moment is what it is. I’m focused on today.”

Steinbrenner generally praised the Mets, calling it “phenomenal” for the city and rivalry to have two great baseball teams.

There is no guarantee of a Mets victory, of course. As another expensive Cohen pick, Justin Verlander, noted Tuesday, “the playoffs are a crapshoot.” But the Mets’ winter is arguably a boon for the sport. They’re creating a lot of new stuff, and perhaps more importantly for an entertainment company, they’re creating a storyline: the Evil Empire reinvented. Baseball thrives when there is theater, and teams that try to come together create drama.

“David and Goliath,” Yankees general manager Brian Cashman said on Wednesday. “I think everything is good for storytelling. They’re trying to put together a team that can’t be beat, and that their competitors will try to beat.

“There are a lot of owners out there spending a lot of money to improve their franchises, not just Steve Cohen and the New York Mets. He is not autonomous in that way. We spent a lot of money ourselves this winter. But there are a lot of teams moving and shaking, and in most cases that costs money.”

Fans of teams in smaller markets might disagree.

“Our sport looks broken right now,” another rival executive said on Wednesday. “We have somebody with three times the median payroll and they don’t care about the long term of any of these contracts, in terms of the risk associated with any of them. How, exactly, does it work? I’m having a hard time understanding this.

This brings us back to an age-old question: Are other homeowners unable or unwilling to spend? Many in the league and some clubs would say the former, depending on the team, and many on the players’ side would suggest the latter. What teams believe they can afford is subjective based on what individual owners feel is appropriate for them, and most club financial records are not disclosed. But different clubs definitely have different incomes, and Cohen certainly has the deepest pockets based on his net worth reports.

“I think everyone in this room understands that we have a level of revenue disparity in this sport that makes it impossible for some of our markets to compete with some of the numbers that we’ve seen,” General Commissioner Rob Manfred said at the Winter Meetings earlier this month. “And, you know, that’s not positive. It’s like everything in life, there are good and bad things.

Whether Cohen cares about what the other owners feel, or whether he might actually be significantly hurt if he ignores those feelings is a different matter.

“This game is based on partnerships and relationships and these small markets are going to be very upset with it,” said the club official. “They’ll try and gin up s—and make Rob (Manfred) f—— get mad at him. It’s not that they can do anything with it, but everybody needs help in this game. I don’t think he’s going to get help.”

George Steinbrenner has long been the target of other owners. In 2002, for example, Larry Dolan, then owner of Cleveland, said, “George is a big part of our problem.”

How much did these attitudes hurt Steinbrenner in the end? Other owners decided to change the system at least. Cashman noted last year that recent CBAs were designed “to keep the Yankees from being the Yankees.”

Which brings us to the most recent CBA. One of the tradeoffs that owners received for raising CBT limits was the creation of a new penalty level that many in the industry thought only the Mets or Dodgers were likely to address. In 2022, all dollars spent above $290 million would be taxed from 80%. The Mets outweighed by an estimated $10 million.

In 2023, that top tier starts at $293 million, and the Mets will be taxed at 90% for every dollar above. (They are at a higher percentage this year because they are second-time offenders.)

“If he had raised Cohen’s tax a little bit more, I think he would have been fine,” the club official said of Cohen. “But the fact that he went through that kind of embarrassed Rob and a lot of people. He went so far beyond that that he netted the entire CBA – he made them look stupid in the CBA negotiation. He flaunted it to their faces.

Hal Steinbrenner was part of Manfred’s labor committee that worked closely on the new CBA. Wasn’t the fourth level intended to deter exactly what Cohen did?

“Well, or anyone,” Steinbrenner said on Wednesday. “Clearly, yes, competitive balance is important to the game, and I remember meeting with you guys in March and saying, ‘No team’s fans should come to spring training thinking they have no chance of making the playoffs. ‘ That’s not good for baseball. So yeah, there was certainly a purpose to it.”

But there seems to be reason to doubt that players or owners thought the Cohen tax would have a strong effect. In the case of the 2023 Mets, every dollar over $293 million would have been taxed at 75% under the old CBA, compared to 90 now. A difference of 15%, especially for an owner already inclined to spend that much, apparently isn’t very significant.

In March, homeowners would certainly love something stricter – a higher tax rate, for example, never mind a cap. But the players would have struggled with that too. Ultimately, baseball’s economic system gives the owner freedom to spend, with some restrictions. Gamers have long wanted this freedom to be preserved.

“If an owner is willing to spend 90 percent tax on $300 million, no CBA would address that without a real cap,” one person on the league’s side said Wednesday.

However, as the players side has realized in the last five years after the 2016 CBA, the result is the result, no matter the intent. The “Cohen tax” isn’t doing much to deter its namesake, and Manfred may have some increasingly unhappy owners to settle down because of it.

And this is where Cohen’s spending could have the most profound effect. It would be a bit of a stretch, a bit cheeky to already be asking: where were you when Steve Cohen started the 2026 lockdown? But Cohen may have lit the fuse in perhaps baseball’s most quintessential backroom struggle: the big market versus the small market.

🇧🇷 the athletic‘s Ken Rosenthal contributed to this story.

(Photo by Steve Cohen: Jim McIsaac / Getty Images)