The New York Mets have long been one of the most iconic franchises in Major League Baseball, fueled by a passionate fan base and a willingness to make bold financial moves. Under the ownership of billionaire Steve Cohen, the team has leaned hard into a high-spending philosophy, aiming to build a perennial contender in a hyper-competitive division. No decision better captures this aggressive approach than the contract extensions awarded to ace pitcher Jacob deGrom. These deals, massive in both length and dollar value, have fundamentally altered the Mets’ payroll structure, triggering heated debates about the wisdom of concentrating so much money in a single pitcher—particularly one with a growing history of injuries. To fully understand the impact, we need to examine the specific terms of each contract, their ripple effects on roster construction, the luxury tax penalties they incurred, and the broader lessons for modern MLB payroll management.

The Genesis of a Mega-Contract

Jacob deGrom debuted with the Mets in 2014 and quickly transformed from a late-blooming rookie into one of the most dominant pitchers baseball has ever seen. His early performance, including a 2014 Rookie of the Year campaign and back-to-back Cy Young Awards in 2018 and 2019, established him as the face of the franchise. The Mets’ first major commitment to deGrom came in March 2019, with a five-year, $137.5 million extension that bought out his remaining arbitration years and covered his first few free-agent seasons. At the time, it was the largest contract ever for a pitcher with fewer than six years of service time, signaling the club’s faith in his elite abilities.

Breaking Down the 2019 Extension

  • Contract length: 5 years (2019–2023)
  • Total guaranteed value: $137.5 million
  • Average annual value (AAV): $27.5 million
  • Signing bonus: $5 million
  • Deferred money: Included a $30 million deferral to be paid in installments from 2024 to 2033

The 2019 deal was a clear victory for the Mets. It locked up a generational talent at a time when the market for elite arms was surging. But it also contained an opt-out clause after the 2022 season, which deGrom exercised after posting a 1.08 ERA and 226 strikeouts in just 146 innings in his 2022 campaign. That decision set the stage for an even more historic contract.

The Opt-Out and the Record-Breaking 2022 Deal

In December 2022, after deGrom declined the remaining two years and $60.5 million on his old deal, the Mets re-signed him to a five-year, $185 million contract. The AAV of $37 million made him the highest-paid pitcher in MLB history on a per-season basis, a distinction that would later be surpassed only by Shohei Ohtani's unique two-way deal. The terms were aggressive for a pitcher who would turn 35 during the first season of the contract, and they reflected owner Steve Cohen's willingness to open the checkbook to keep a homegrown icon.

Key Terms of the 2023 Extension

  • Contract length: 5 years (2023–2027)
  • Total guaranteed value: $185 million
  • Average annual value (AAV): $37 million
  • Signing bonus: $15 million
  • Performance incentives: Up to $1.25 million per year based on Cy Young voting and games started (e.g., $250,000 for making the All-Star team, $500,000 for winning the Cy Young)
  • Player option: Option to opt out after 2024 and again after 2025, giving deGrom flexibility if his performance remained elite

These numbers placed deGrom alongside the sport’s very highest earners. For comparison, only players like Ohtani, Max Scherzer, and Mike Trout have ever commanded similar annual values. The statement was unmistakable: the Mets were willing to pay a premium to retain their superstar, even as he entered the risky years of a pitcher’s career.

The Ripple Effect on the Mets’ Payroll

The deGrom extension did not happen in isolation. The Mets entered 2023 with one of the largest payrolls in MLB history, projected at over $350 million in competitive balance tax (CBT) calculations. The team had already committed enormous sums to Francisco Lindor ($341 million over 10 years), Max Scherzer ($130 million over 3 years), and closer Edwin Díaz ($102 million over 5 years). Adding deGrom’s $37 million AAV pushed the luxury tax surcharges to staggering levels.

Luxury Tax Escalation and Penalties

Under the 2022–2026 collective bargaining agreement, the first luxury tax threshold was $233 million in 2023. The Mets not only sailed past that but also triggered the second ($253 million), third ($273 million), and fourth ($293 million) tiers. As a result, they faced a 30% surtax on any spending above $293 million, plus their first-round amateur draft pick was moved back 10 spots (from 19th to 29th overall). The total CBT bill for the 2023 season was estimated at over $100 million—more than the full payrolls of the Baltimore Orioles, Tampa Bay Rays, or Miami Marlins. This staggering penalty demonstrates how a single mega-contract, when combined with other large deals, can create cascading financial consequences.

Roster Construction Trade-offs

The concentration of salary in a handful of star players left the Mets with limited resources to build depth. In 2023, the core four of deGrom, Scherzer, Lindor, and Díaz accounted for nearly $150 million in salaries, leaving roughly $200 million in CBT spending for the other 22 roster spots. In theory, that should have been enough, but the team also carried high-salaried players like Starling Marte ($20 million), James McCann ($12 million), and others who were underperforming. The result: the Mets had to fill bench roles and the back of their rotation with minimum-salary players, many of whom produced below replacement level.

This structural imbalance became painfully clear when injuries struck. deGrom made only 11 starts in 2023 before undergoing season-ending elbow surgery. Scherzer also struggled with health and was eventually traded to the Texas Rangers at the deadline. The team’s vaunted rotation collapsed, and the offense could not compensate. The lesson: elite talent only helps if it takes the field, and a payroll strategy that leaves no room for quality depth is a fragile foundation.

The Injury Factor: A Cautionary Tale

Jacob deGrom’s injury history was well-documented before he signed the 2022 extension. He missed significant time in 2020 (neck), 2021 (elbow, forearm), and 2022 (shoulder). Despite this, the Mets structured a contract that featured a high AAV but only minimal protection against the very real possibility of extended absences. The performance bonuses tied to games started and Cy Young voting offered some upside, but no salary adjustments or insurance provisions were built in to lower the burden if deGrom missed a full season.

When deGrom underwent ulnar collateral ligament surgery in June 2023, the Mets were left paying $37 million for essentially zero on-field production. This scenario underscores the unique risk of investing heavily in pitchers over 30. Even the greatest arms—think Clayton Kershaw, Justin Verlander, or Max Scherzer—have faced significant injuries in their mid-to-late 30s. The Mets’ willingness to ignore that historical pattern was a high-risk bet that, so far, has not paid off.

Strategic Lessons for MLB Front Offices

The deGrom contract offers invaluable lessons for any team considering a similar mega-deal. While hindsight makes analysis easy, the underlying principles of risk management and payroll construction deserve careful attention.

Risk Assessment and Contract Structuring

  • Shorter terms for older players: deGrom was 34 when he signed. A three-year deal with an opt-out after one year would have reduced the financial downside while still offering a high AAV. The Mets opted for five years, assuming deGrom’s peak would hold longer than it did.
  • Incorporating injury protections: Some contracts feature salary reductions, deferred payments, or performance-based vesting options for future years when a player misses significant time. The Mets could have negotiated a clause that automatically reduced the base salary in any season following a major surgery, providing some relief.
  • Spreading the risk: Instead of concentrating so much guaranteed money in one pitcher, teams can diversify by signing multiple mid-tier arms. The Padres’ approach—giving big contracts to one or two stars while building depth through trades and development—is one alternative. But it requires a strong farm system, something the Mets have historically lacked.

Alternative Approaches: The Dodgers Model

The Los Angeles Dodgers have consistently fielded winning teams despite spending heavily, but their strategy differs markedly. They balance star contracts—like those of Mookie Betts and Freddie Freeman—with a deep pipeline of homegrown talent. Players such as Corey Seager, Walker Buehler, and Julio Urías were developed internally, providing high-level production at low cost. This allows the Dodgers to absorb the risk of big contracts more easily. The Mets, by contrast, have struggled to produce consistent major league contributors from their farm system, making them more dependent on expensive free agents like deGrom.

Additionally, the Dodgers have used contract deferrals creatively (see Ohtani’s $680 million deal with massive deferrals) to manage CBT hits. The Mets have not leveraged deferrals to the same extent, meaning their CBT numbers are more immediately punishing.

The Mets’ Current Situation and Future Outlook

As of early 2025, the Mets are still paying deGrom a $37 million AAV while he works his way back from elbow surgery. He is expected to return sometime in 2025, but his effectiveness remains uncertain. Meanwhile, the team has shifted its approach under new president of baseball operations David Stearns, emphasizing a balance of established stars and developing young talent. Prospects like Francisco Álvarez, Brett Baty, and Mark Vientos are now regulars, and the farm system has improved.

However, the deGrom deal remains a significant financial anchor. Through 2027, it consumes roughly 15% of the payroll, limiting the team’s ability to pursue other high-priced free agents or to absorb bad contracts in trades.

Potential Paths Forward

  • Hope for a resurgence: If deGrom returns to anything close to his 2018–2022 form, the contract becomes a bargain. But given his age and recent surgery, that scenario is optimistic.
  • Trade deGrom with salary retention: The Mets could eat a portion of the salary to facilitate a trade, freeing long-term cap space. However, deGrom’s contract and injury history make this difficult; few contenders would take on that risk without significant compensation.
  • Supplement with low-cost talent: The team can mitigate the payroll crunch by continuing to develop homegrown players and targeting bargain free agents like veteran short-term signings. This is already happening with moves like the signing of Luis Severino on a prove-it deal in 2024.

External Resources and Further Reading

For a detailed breakdown of deGrom’s contract terms and salary cap impact, see Spotrac’s deGrom contract page. The official MLB explanation of the competitive balance tax rules is available at MLB.com’s glossary. Historical performance data and salary context can be found at Baseball-Reference. For an analytical perspective on how mega-contracts affect roster construction, Fangraphs’ coverage offers deeper statistical insights.

Conclusion

Jacob deGrom’s contract extensions have left an indelible mark on the New York Mets’ payroll strategy. They represent a high-stakes, star-first approach that prioritized maximizing a championship window over long-term financial flexibility. The consequences—skyrocketing luxury tax penalties, reduced roster depth, and the crushing blow of a major injury—have demonstrated the perils of concentrating such a large share of payroll in a single aging pitcher. While the gamble may yet produce a return if deGrom returns to dominance, the lesson for the industry is clear: mega-deals for pitchers over 30 carry enormous risk, and teams must build payroll structures that can absorb those risks without collapsing. The Mets’ path forward is now one of careful balancing—between honoring a franchise icon and building the sustainable depth needed to compete year after year in a modern, unforgiving baseball landscape.