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Alden Gonzalez, ESPN Staff Writer
LOS ANGELES — Blake Snell’s introductory press conference was held amidst turmoil. The two-time Cy Young Award winner sat behind the podium in right field as bulldozers and cranes hustled the playing surface at Dodger Stadium, creating massive amounts of ground to make room for the new batting cages and clubhouse that will soon grace the interior of the old ballpark. was digging a pile of dirt. , a renovation costing tens of millions of dollars.
These days, the Los Angeles Dodgers don’t seem to blink at the cost. Already one of the wealthiest franchises in sports has ascended to an even higher financial stratosphere, a reality made clear by recent business ventures.
Snell’s contract marks the Dodgers’ fourth nine-figure addition in less than 12 months, occurring in one offseason after the signings of Shohei Ohtani, Yoshinobu Yamamoto and Tyler Glasnow. Add Mookie Betts, Freddie Freeman, and Will Smith, and you have seven nine-figure contracts on one roster with a total guaranteed value of over $2 billion. Almost half of them are delayed until 2046. The Dodgers have made a very competitive offer for the superstar outfielder, who is expected to sign for more than $600 million, according to people familiar with the process. Just because they can.
All of this has fueled outrage from fans outside of Los Angeles, sparking claims that the Dodgers have exposed some kind of loophole. That they rigged the system. They ruined baseball. When asked if that was really true, President of Baseball Operations Andrew Friedman smiled politely and tried to hide the anger the Dodgers’ key decision-makers felt when they heard the story.
“I think we’re giving back to our incredibly passionate fans,” Friedman said.
Friedman spent most of Tuesday’s workday fielding questions about the excessive amount of deferrals sprinkled across his payroll. The Dodgers, who include Ohtani, Betts, Snell, Freeman, Smith, Tommy Edman, Teoscar Hernández and JD Martinez (currently not with the team), have eight players in deferred contracts worth just over $1 billion from 2028 to 2046. I owe you an amount. – The closest teams, the New York Mets and Boston Red Sox, owe $137 million and $130.5 million, respectively. According to figures compiled by Spotrac. No other team has more. 50 million dollars performance.
Friedman, who was hired to oversee the Dodgers’ baseball operations department a decade ago, downplayed the role of the smoke in the team’s strategy, calling it a “leverage” to find “overlap” in negotiations, adding, “There’s no such thing as hard and fast.” We aim for the concept of “rules.”
“Shohei seems to grate on people because it’s so different, and the others seem to get caught up in that issue unfairly,” Friedman said. “But I think that’s a bit lazy.”
The Dodgers did not include deferrals in either Yamamoto or Glasnow’s contracts. Sources said the initial offer to Snell was brief and the deferment was later added as a mechanism to secure a higher-up endorsement. But while it’s true that more than half of the team’s total is $680 million deferred by Ohtani’s $700 million contract, the Dodgers have Betts ($115 million deferred), Snell ($66 million) and Freeman ($57 million). ) also owes a debt to ), Smith ($50 million) and Edman ($25 million) received significant amounts of money after their contracts expired.
Players and agents are often open to deferrals because it enhances the overall guarantees of their contracts, allowing agencies to promote bigger deals and players to receive higher compensation that bolsters free agent prices. Teams benefit in a variety of ways, including lowering their luxury tax burden, freeing up more cash, and benefiting from investments that finance their deferrals. But industry sources warn that the benefits aren’t as big as you might think.
“If it really was that beneficial, we would see a lot more of this,” the rival general manager said.
Competitive balance tax salaries, which are used to determine where a team resides relative to the luxury tax threshold, are averaged over the life of the contract, taking into account the present value of the deal. So even if Ohtani only made $2 million per year as a player, his annual cost to the luxury tax threshold would be about $46 million. Because for this purpose the current value of his contract is worth $460 million. Snell’s cost in luxury tax is slightly less than $32 million. Had the deal not included the deferral, it would have saved a bit more than $36.4 million, but not much considering the overall guarantee would theoretically have been smaller. In that case.
A more obvious benefit is cash. The Dodgers actually paid Ohtani just $2 million to win the MVP award in 2024, putting together the first 50/50 season in baseball history, and will pay Ohtani just $2 million in 2025 to play as an elite two-way player. no see. In that sense, it’s the biggest discount since the advent of free agency. But the savings aren’t necessarily spent on the Dodgers. The majority of the $46 million previously mentioned must be placed annually in an escrow account that holds deferral commitments until they become due.
The collective bargaining agreement includes some language mandating that teams must invest their funds in safer, more liquid accounts that may have lower returns but could mitigate the risk of franchises going bankrupt because they can’t cover their costs. But rival executives nonetheless believe that teams like the Dodgers, which are owned by multiple talented investors, have more leeway to profit from these investments. How difficult is it to decipher?
“It’s just how you describe it,” Friedman said when asked about the dangers of tying up too much money far into the future. “You have to raise a lot of money right now and make that money work for you. We have a lot of ownership groups with financial backgrounds and we can put that money to work right now and make that money not work for us. We’re not going to wake up in 2035 and say, ‘Oh my God, we have money left.’ We’re going to plan it out along the way.”
The Dodgers, who are still expected to re-sign Clayton Kershaw and hope to bring back Hernández, are currently waiting on 2025 payroll of about $210 million, second only to the Philadelphia Phillies. Their CBT salary is expected to be $285 million, according to Spotrac. That’s $40 million more than the second-place Phillies and $85 million more than the third-place New York Yankees. The Dodgers are almost guaranteed to exceed MLB’s highest luxury tax threshold for the two years remaining in their current collective bargaining agreement. This means drafting 10 figures later and paying up to 110% additional tax.
They’re suddenly acting like it’s nothing, and a lot of that goes to Otani. The revenue he generated in his first season in LA defied even the most optimistic expectations. In the World Series, he helped the team to victory and sparked another financial windfall. And perhaps most importantly, because of the massive acting he volunteered for in the contract. All of this with the expectation that the Dodgers would continue to use the money they saved to surround him with high-end talent.
“We take seriously the promises and promises we made to him,” Friedman said.
Friedman got through his first six offseasons as Dodgers president of baseball operations without signing a single nine-figure contract. Bryce Harper was a free agent at the age of 26 at the time, and the Dodgers signed a four-year, $180 million contract, hoping that the sluggish market would force the superstar outfielder to agree to a shorter deal with a higher annual value. suggested. Please allow me to re-enter the market at age 30.
The Dodgers were trying to be opportunistic at the time. Now they have become shameless attackers who are constantly trying to close the deal. Friedman goes on to talk about the importance of “keeping one eye on the future and one eye on the present,” and says it’s important to keep the minor league system strong enough to minimize outside demands, but he doubts the Dodgers are operating at any other level. There is no room for doubt. now.
They actually do whatever they want and they make no apologies for it.
