Major League Baseball saw a $2.5-billion drop in its payrolls, according to the Associated Press. After a shortened, 60-game season because of the COVID-19 pandemic, the total salaries of the 30 teams fell from $4.22 billion to $1.75 billion.

The Los Angeles Dodgers, which defeated the Tampa Bay Rays in this year's World Series to win the championship, were the top spender and their payroll of $98.6 million, was the smallest for a leading team in 20 years.

MLB and the players' association agreed after the 2020 season was interrupted by the coronavirus that base salaries would be cut based on the shortened schedule. That explained why base wages for 40-man rosters were down from $3.99 billion in 2019 to $1.54 billion, but prorated portions of signing bonuses only dropped from $122.8 million to $120.6 million. Meanwhile, earned bonuses fell to $25 million from $26.9 million.

If a full 162-game schedule had been played, full salaries paid and call-ups from the minor league like usual, the 2020 payroll would have likely grown by about four percent.

Though teams did not have to pay players their full salaries, many of them were still tightening their finances. For example, buyouts of unexercised 2021 options were worth $58.2 million in total, which is twice the number ($26.9 million) for 2020.

Some teams should congratulate themselves for the suspension of the luxury tax. Based on full salaries by average annual value plus the at least $1.5 million of COVID credit for every team, the tax threshold is $208 million. Three teams, the New York Yankees ($239.8 million), the Houston Astros ($224.3 million) and the Chicago Cubs ($216.3 million) were projected to finish over that number.

As teams that were over the threshold for the second straight year, the Yankees and the Astros would have paid 30 percent of the amount between $208 million and 228 million. The Yankees would have also paid 42 percent of the part above $228 million. As for the Cubs, the tax would have been 20 percent of the overage.

According to AP, that's $16.9 million in taxes saved for the three teams.