The Dodgers are engaged in an ongoing process with Major League Baseball regarding the team’s compliance with the league’s debt-service rule, according to reports from Bill Shaikin of the Los Angeles Times and ESPN.com’s Doug Padilla. The organization is said to be carrying hundreds of millions in debt as it nears the conclusion of a five-year waiver from those debt requirements, which went into effect when the current ownership group purchased the club.
Baseball teams are subject to a rule that “limits debt to no more than 12 times annual revenue, minus expenses,” writes Shaikin. In the case of the Dodgers, the large amount of debt is offset by a massive television rights agreement – reportedly worth $8.35B over 25 years – along with the ticket sales from league-best attendance (among other sources of revenue). Of course, the club has also committed more in payroll ($1.181B, including $112MM in luxury-tax payments) since the sale than any other organization.
While the Los Angeles Times report suggests that there is a league mandate for the Dodgers to reduce their debt ratio, that’s not the team’s interpretation. “There is no mandate,” president/CEO Stan Kasten tells Padilla. “There is no problem with our debt and we continue to work on the same program we have been working on from the day we walked in here in 2012.”
More broadly, Kasten emphasized, “business for the Dodgers is very strong and very healthy.” While the team has focused more on obtaining and developing young talent than on continuing to take on huge salary commitments, top organizational figures say that’s all part of the original plan rather than a reflection of some mounting debt problem.
From the league’s perspective, it seems, Los Angeles remains on track to comply with all applicable standards. Teams in violation of the debt-service rule can be subject to discipline, with a variety of measures at the disposal of commissioner Rob Manfred, which can even include the requirement of approval of expenditures or suspensions to ownership and/or team executives. But Manfred suggests that he does not see any likelihood of formal action being taken by the league – or even any significant change in operating philosophy.
“I think the Dodgers will be in a position that they can comply with our expectations in terms of the debt service rule, without any dramatic alteration in the kind of product they have been putting on the field,” he told Shaikin. Manfred added that “the Dodgers have always had a plan that would give them financial stability over the long haul.”
The commissioner also made clear that the organization would not be forced to trim payroll to ease its debt burden, as Padilla reports. Under the league rule on debt servicing, he said, “non-compliant clubs are asked to submit a plan demonstrating a path to compliance,” explaining that “clubs are evaluated on an ongoing basis relative to that plan.” Manfred further emphasized that “there are various ways to achieve compliance and there is no mandate to cut payroll.”
All told, it does not appear as if there is any particular reason to believe that the Dodgers’ immediate offseason decisions will be impacted by the debt issue – at least, that is, beyond the prior planning that has already been undertaken. But it remains to be seen just how much the organization will be willing to spend this winter with several holes to fill and notable free agents including closer Kenley Jansen, third baseman Justin Turner, lefty Rich Hill, and second baseman Chase Utley.
Los Angeles does have a rather substantial slate of current payroll commitments, including several to players who are no longer on the 40-man roster. The team concluded 2016 with a payroll in the $258MM neighborhood and already has upward of $193MM in commitments for next year, Jason Martinez of MLBTR and Roster Resource estimates. They’re on track to exceed the luxury-tax threshold again in 2017, then, even though it could increase from $189MM in the current CBA to around $200MM in the next agreement. There’s also already over $130MM committed to 2018 payroll, though the standing obligations draw down rather rapidly from that point forward.
Despite their debt situation, the Dodgers have made many sizable commitments on the international market and have not been dissuaded from some notable, mid-range free agent signings. We’ll soon learn how much appetite the organization has for similar, or even larger, agreements in advance of the 2017 season. The Dodgers are reportedly interested in pursuing reunions with all of their free agents, and have also been tied to prominent open-market players such as closer Aroldis Chapman. The trade market may provide an alternative; Los Angeles has recently expressed interest in reasonably priced standouts like J.D. Martinez, Ian Kinsler, Brian Dozier and Logan Forsythe — all of whom are under contract for two or fewer years — though acquiring any of them would presumably weaken their farm system.
A prior version of this post mistakenly suggested that the Dodgers would be forced to cut payroll in order to comply with MLB’s debt-service rule.
Wow, they could be screwed. Giants, Rockies, dbacks need to take advantage soon and the padres may try to speed up the rebuild.
let’s be real, they were winning 3-4 years ago because they spent so much, but the teams’ now have no correlation with spending so much. Their best player and a whole bunch of minor leaguers they received contributions from were making the minimum this. Justin Turner made as much as Sean Rodriguez is now. Carl Crawford, Andre Ether, McCarthy, etc. did very little this year and are set to expire soon.
Agreed, I a bit confused with how they’re not in compliance??? $8.35/25= $334 million annually plus the fact that they make well over a million per home game or another $84+ million and let’s not even talk about merchandise!!!
All this is, is sour grapes from other owners that don’t want to spend so much money and want the Dodgers to scale back which they are doing anyways …..
Dodgers don’t get all the TWC/Charter TV revenue… they have to share a percentage with rest of MLB. Their interest in financing the original team purchase must be substantial.
A general comment…
“Rookie of the Year-winning shortstop Corey Seager, potential ace Julio Urias and outfielder Joc Pederson will remain under cheap control”.
I’m sure these three guys really appreciate hearing that they’re the cornerstone’s of the franchise going forward and the way Dodger management really regards them as cheap but important assets….are they valuable because they are cheap as compared to other player options or they can play baseball pretty well and will help the team win..
No wonder players, once eligible, go for every dollar they can get when dumb comments like this surely are written down by their agents and brought up to management at the appropriate time.
And, this just isn’t “doing business” as I’m sure comments will be made. I get it but its still dumb for management to comment like this.
Whats more valuable to a organization? Mike Trout making 40M a year, or Mike Trout making 500k a year? They’d be cornerstones regardless of what they make, but the fact that the Dodgers are seemingly in debt, being cheap cornerstones surely makes them more appealing to the Dodgers.
Every player in the league falls under the same rules for compensation for the his first three seasons.
i didnt see quotes around that in the article..and even if they didnt, its not like every agent and player doesnt know what the deal is.
and of course every player is going to go for whatever they can regardless, when they have the opportunity.
I think there are bigger issues to worry about then how they phrase the monetary and on field value of players. What he said many say all the time it’s baseball lingo
You’re 100% right!
You are quoting the author of the article as depicting those players as “cheap control,” not the management. Also, it’s not as if these players are in the dark that they are cost effective assets.
Of course players want to get compensated at a level comparable to their actual play, but young players who are a year or two in can’t be expecting to be paid $10 plus million a year when they first hit the big leagues. It’s all part of their CBA and also why baseball has the arbitration system. Sure, they can’t be paid equal to their level of play their first two or three years, but the following three/four years sees them get paid at a reasonable level (on top of the signing bonus some players get upon being drafted). Compare that to other sports where only the first round picks get compensated at a decent rate. Players drafted in later rounds are stuck with their rookie contract and pre-determined wages through their first 3 or 4 years.
Why couldn’t I know this before the contest??????????? Would have used crying emojis but can’t on here.
Lol. I thought the same thing.
Yes the gift of McCourt keeps giving. Have to love the 412M in debt he left. Thanks Frank thanks a lot MLB.
This can’t all be blamed on McCourt. The Dodgers have spent foolishly under their current ownership group until recently.
Well technically the $412M in debt they inherited can be directly traced to McCourt. The terrible contracts can be traced back to Colletti.
So Vedder80, other than the trade with the Red Sox, and the well deserved contracts to Kershaw and Greinke, what signings have they made in the last four years that were made under the new ownership that were astronomical failures/miscalculations? Other than many much smaller miscalculations, they haven’t made any huge free agent signings that backfired. The trade with the Red Sox was to bring us back to relevance after years and years of low payroll (for a big market club) and mediocrity. We are still paying Crawford $21 million next year, and paying out for the poor Cuba signings of Arruebarruena, Guerrero (done after next year), and that awful miscalculation in Olivera. Those three Cubans right there will account for $17.6 million in dead weight money. We have only three players being paid over $15 million next year: Kershaw, Gonzo, and Ethier (contract signed by previous ownership – done after next year). So again, tell me who we have swung and missed hard on and burdened ourselves with with 5+ year $100 million+ contracts?
Dre was extended by new management. It was in June 2012 no? Ned and Stan made it happen I thought? And it doesn’t have to be big contracts. The BM contract was horrible.
Well, colletti and McCourt left the dodgers with a near barren farm system and dead weight contracts. The new ownership wanted to compete and rebuild, so the owners spent what was needed. Just be glad you have owners that are willing to spend to compete. Other owners would have just sold everything and gone under .500 for 3-5 years to rebuild.
No team spends as blindly and stupidly as the Dodgers.
Another ignorant comment. The dodgers havent spent crazy money at all in the freidman era. Teams have been handing out 100 million dollar contracts like its nothing and freidman has not handed out 1 yet.
Is it because they anticipated something like this, knowing the accumulated debt? If so, it makes sense.
I think it’s pretty likely that’s why Friedman was brought in in the first place.
Although I’m a Padres fan, I agree Mr. 711’s comment. But I can see why Sandman would think that as the Dodgers are known for having a considerably high payroll. I very much appreciate their attempts to focus more on home grown talent rather than just buying the best players (at least in the past few seasons). It will be interesting to see what this situation does to the Dodgers organization and how they will fix the situation.
Dodgers have over $100 million invested in their pitching staff alone.
Well pitchers are half of the roster.
^^
Actually they don’t have to cut debt if they add more capital but I doubt they want to do that.
The formula is debt service to revenue, and don’t doubt that they are working to increase revenue. Ticket prices were hiked again this year. Some seats have more than doubled in price over the last two years.
You just hit an important aspect BluSky and an almost forgotten one when everyone is in giveaway mode toward letting the MLBPA make millions and millions because of “rich owners who have everything”.
Fenway park raises ticket prices every year, think Boston has the highest prices every year if am not mistaken. Old Yankee stadium used to sell out every game, yet when they moved to the new one? They like doubled ticket prices and added thousands of those downfield luxury seats with mammoth prices, which never sell out.
Pricing is what will do in the game from the giveaway mode in contract negotiations. people have to be able to afford to attend these things and many can’t. Every stadium isn’t priced like the thunderdome, or tropicana field as it’s now called where there isn’t a good seat in the place, so none are that expensive.. many stadiums have been forced for various payroll, local taxing.rings to jack up the prices and it’s not going to be done yet until am thinking something comes along which hits players directly in THEIR wallets, nothing else will show them, whether it’s failure of smaller teams, lockouts, etc..
I don’t believe that ticket prices are connected to payrolls or any other cost of running the franchise business. They are connected to only one thing, the ticket market. The teams have a better handle than ever on the market because they have a window right into the aftermarket with the vast majority of resales now happening through StubHub. Armed with that information they can finely tune the cost of seats, game by game, and row by row. This is definitely happening at Dodger Stadium. They are seeing the money hanging on the trees and they are harvesting it as efficiently as possible and they are doing it because they can, irrespective of any costs of doing business.
The NHL and NFL have hard salary caps. Their average ticket price is higher than MLB prices. Try again.
I understand you hate the notion of players being paid fairly for their work, but understand player salaries don’t drive ticket costs. Supply and demand does.
It’s got nothing to do with anybody getting more money. it does have to do with what happens when a team goes belly up, or a team does get so far under that it cannot make payroll then?
LA seems to have gotten itself yet again into trouble cash flow wise. Texas did before several years back and the NYM did the same thing not long back.
What happens when the rest of the owners, despite agreements to the contrary, argue that they are NOT liable for said owners failure? This isn’t some business savvy skin flint like Charlie ‘O” here, nor someone like Calvin griffith who had nothing else to rely on except whatever his twins could earn. These are people knowingly taking a dive over a cliff to win and not ones with deep rooted financial empires, like george Steinbrener had either.
There comes a time when people have to overlook their ideals and see where the risk is at and always has been since this country was founded, not to mention the principle it was founded upon..
When was the last time a baseball team went “belly-up”? Like 1914?
How much did an organization cost in 1914? same with payroll obligations? how much debt/cost and payroll combined was any Charlie “O” team?
Then factor in.. Just say the LAD and debt. What did the group pay for the organization? how much future debt to they have in just payroll?
It’s staggering i would imagine. Supposed future income, like that TV deal would never materialize.
Every company will have to spend and does, but not unlimited for the sole purpose of winning at any cost. I doubt bankruptcy is any kind of an option to get them out of payroll obligation and who would step in and take over billions of debt? this isn’t mcCourt’s “paltry” 400m this time.
Should/would other owners chip in? Why? would you??
I don’t think the debt service ratio guidelines set out by MLB can be interpreted indicating a cash flow problem. In fact their rules assume new owners will exceed the limits for a number of years after the purchase, which the Dodgers have done with the blessings of MLB. They spent heavily on the international free agent market while that window was open. They also addressed quite a bit of deferred maintenance at the stadium. I may be critical of a lot of things done by ownership, but not that. Their annual revenue exceeds $400M. Financially they will be just fine.
Stubhub is just another way Dodgers Inc. screws over their season ticket holders (which accounts for 35,000 seats). It is almost impossible for a ticket holder to simply recoup face value on Stubhub as they take a 25% commission. It is great for buyers, though, as for the vast majority of games you can routinely get tickets for much less than season ticket holders paid, even with the fees. In fact, it is not uncommon to have 10,000 seats sitting on Stubhub on the day of a game. If Stubhub prices reflects the true market, if anything, it says that season ticket holders are paying more than those tickets are “worth” …. yet once again those prices are being raised.
Scarcity of games for the NHL and NFL though. 41 home games per NHL team and 8 (or 7. Thanks England.) for the NFL. That can contribute to the ticket price disparity.
oh, but they are raising prices: latimes.com/sports/mlb/la-sp-dodgers-tickets-incre…
All that money and still no World Series haha
The contracts are out of control, when the likes of Bryant and Trout are free agents the contracts they will sign will be close t0 $500 million. Players like ARoid and Fielder are getting millions to do nothing.. The owners are partly to blame for these absurd contracts but most of the blame is on the shoulders of the players and their union. The best way to help the owners is stop having guaranteed contracts.
This is complete nonsense–players have talents that they have every right to sell for whatever the market will bear. Or is capitalism a concept that only applies selectively?
I agree , but if they are not performing should they get paid??? If your production decreases at you job you get fired, unlike ARoid who made in 16 and will make in 17 combined $42 million. Or take the case of Prince Fielder, he is out of baseball due to injury, Companies have insurance for injury settlement. Prince will continue to make $24 million a year for the next 4 years,. He has made almost $200 million is his career, will have the best medical care for he rest of his life , He knowingly accepted the risks of playing the game , so I don’t feel sorry for him, My opinion is no play no pay.
He got hurt doing his job. If you slipped at work tomorrow and broke your leg would it be okay for your employer to fire you without pay ?
In the case of ARod, the Yankees won’t let him play. He still wanted to. If you think that it would be acceptable to not pay a contracted employee, well, That’s quite illegal in any industry.
Contracts are two-way streets, not ceilings for management to honor only when they feel like it. You sign players for a term of years because that’s what the market calls for–but also so you can control them. You think management doesn’t enjoy the upper hand in the early years, where the best performing players earn ML minimum?
If I broke my leg my company would pay me, and if I could not return their insurance would give me a settlement .
ARod wanted to play but the Yankees knew they could do better @3B. Look at his stats last 2 years combined. 216 games 25 HR 76 RBI and a .225 average.
The contracts are agreed to with both sides fully knowing the rules and risks. Guaranteed means guaranteed. Hard to compare a peak athletic performance sport to any of us at our day jobs. If I start sucking at my job, it would be due to something that I’m not doing right, not due to some insurmountable physical decline (except in the case of injury, which I would also get paid for, like someone mentioned).
So it’s his fault the Yankees signed him to a contract?
Which is exactly what happened with Fielder, except for some reason you think that’s wrong.
ARod last two years combined : 42 HR, 117 RBI. not sure what stats you are looking at.
If you sign a contract, like the players do, you will get paid for the life of the contract. Unfortunately, in my line of work, that’s not the case.
Uh, yea and it would be up to you to have LT disability insurance.
Fielder signed a contract. It is a guaranteed contract. So did the Tigers, and then the Rangers when they accepted the transfer from Detroit. So yes, he should still be paid, even if he isn’t playing. Why should he be paid, because both sides agreed he would be.
Without guaranteed contracts, MLB just turns into the mess that is the NFL and their contracts, where every year we have at least one instance of either a club or a player deciding they don’t like the contract that was signed in bad faith and thus gumming up the works.
These contracts are part of why the front offices of every MLB franchise are so heavily scrutinized with every move, even the minor ones. Baseball is all about trying to generate excess value from players to be able to afford stars like Fielder. If a player getting hurt can be enough to void his deal, then what’s the point of a long-term contract?
And if the injury prevented you from ever returning to your trade, it would include lifetime medical care for the injury and a settlement to set you up financially for life at a reasonable level of living commensurate with what you would have earned in your job.
In Fielder’s case, that would probably be more than what the Rangers are paying just to honor their side of a contract that they agreed to.
Capitalism is not happening here when the taxpayers foot the stadium bills.
It’s not the players fault, it’s the ownerships fault for paying for previous stats. Pujols should have never gotten that much (among other people) from LAA for what he did with St. Louis.
There needs to be 3 levels of set contracts.
<2 year player
3-8 year player
8+ year player (w/ full no trade if w/ same team 5+ years)
Then, drive the value up with bonuses for stats.
Gives the player incentive to play to their best ability, keeps contracts controlled, etc.
Help the owners? Do you know how much owners make? There’s a reason they keep handing out those contracts.
Yes the owners make a lot of money, they also are responsible for all the financial commitments aside from the players payroll. As far as handing out these contracts, they tried to control the salaries and the players union cried foul.
Baseball players get a smaller slice of the revenue pie than any other major sport. The owners are doing just fine.
You mean collusion in the 1987 season? Yeah, the owners tried illegally to cap salaries. They ended up getting fined millions. They don’t get their anti-trust exemption AND illegal restrictions on labor rights too. Nobody ever walked into a baseball stadium to watch an owner.
I don’t feel any sympathy for the owners. Minor leaguers making 30k a year, I feel sorry for them.
Personally, I love terrible contracts. It’s a great for an opponent to hurt themselves. The Angels and Mariners have little flexibility thanks to Pujols and Cano. This helps my Astros.
Just curious, what evidence do you have to support this?
Keep in mind that those minor leaguers make their 30K during the season and then can find other work during the rest of the year. Many of us work all year to earn $30-40K a year, with little hope of receiving more than a 3% raise per year. Hard to feel sorry for someone getting paid to work towards their dream.
These minor leaguers can do things that few of us can do. I could make more money as a brain surgeon…but I’d need to go to medical school first.
I agree with the notion that the owners are partly to blame no player is holding a Gm/owner hostage to pay them these salaries. The owners think the player will make them $ just like a Pablo or aroid contract it all has to do with who will make them the most $ between wins and marketing.
Very few minor leaguers make 30-40k per year. You have to be on 40 man roster to make any money. Most of them make less than 10k for a season. That is why they were filed a lawsuit for hourly wage compensation.
I love this sad justification for low minor league salaries. “Hey, just get a job at the 7-11 for a few months…”.
Nobody ever walked into a baseball stadium, without there being an owner.
No owner, no team, no stadium.
Actually, most of the stadiums are paid for by the people watching the game. Not too many privately funded stadiums in baseball.
The players don’t take it as “blame”. They take it as success that they got the owners to give out those contracts.
So because the players’ end up playing worse, or at least at a level not comparable to their salary, they should give back their salary? They have every right to seek the biggest contract possible, its the same thing that most everyday people will do…they’ll switch their job/position, if possible, if it means more money. Is it ok for your bosses (or anyone’s boss) to reduce how much your currently making because you’re not working at a level comparable to your salary?
Honestly, if a team winds up missing out on an outfielder or a starter, they could probably grab Either, Kazmir or McCarthy in a salary dump deal and get some prospects as well, now that it is known that the Dodgers need to cut payroll.
Don’t expect anything now, but January, February– could see some solid salary dump trades.
I would totally take on one of those deals if a prospect was included
This isn’t news to any team or dodger fans. The only thing it means is the Dodgers can’t go on a prospect spending spree which they are prohibited regardless. This also is just news because they weren’t going to go crazy on the FA market. They have no reason to just dump those player. Their debt numbers were also skewed because of the 100 M they spent on the international market. This has been planned for and known for a while.
The Guggenheim Partners continue to fleece the Dodger fans, just like McCourt did. The Dodger Investment Fund routinely raises prices on tickets – yep, going up again this year – and concessions. Meanwhile, parking is outrageous (parking started at $40 during the playoffs and went up to $75) – which is no surprise since McCourt’s still makes at least $7 million a year from parking, as well as at least $5.5 million annually for managing the real estate agreement for the land around Dodger Stadium … but they still have the smiling face of Magic Johnson to plaster on this $hit $how, so Go Blue!
Parking fees are outrageous (especially given the state of the parking lot traffic and the lack of good alternatives), but not nearly as outrageous as you report, unless you are one of the few who still insists on paying the drive-up rate. I’m paying around $24 a game for reserve parking as part of my season ticket package.
My prepaid parking for the playoffs was $40 for lot K, for the rest of the year it was $23. It just seems like an especially predatory way to treat your guests since there are no reasonable alternatives.
Yes, postseason prepaid reserve parking was $40 (lot N), but you won’t pay the exorbitant $75 unless you are dumb enough to expose yourself to the drive-up cost. On the lack of good alternatives, you will get no argument, a problem that is compounded by the predictable postgame traffic jams.
Is there not public transportation to games? Just curious. I lived in Chicago for several years and never paid a dime to park at a Cubs or White Sox game because there were plenty of trains I could catch before and after the game.
None you’d really want to use. For the last number of years the Dodgers have run busses to and from Union Station (a few miles away) where you can either park or take the Red or Gold line trains. Among the problems with this system is the busses are contending with the same traffic in and around the stadium that drivers face. It can be horrendous. Dodgers fans often get kidded about coming late and leaving early, but this is why. In all the years since 1962 apparently no ownership has figured out that the main problem in the lots is the lack of car and pedestrian separation. If that could be fixed I would not mind so much paying $24 to park.
Parking outside the parking lot is the only way to go. If you get there early it is faster in and out and doesn’t cost a dime. Because I live so far away I only get to go to two or three games per year, but I discovered this a few years ago. Park near the LAPD academy and getting out of the stadium is ten times easier. The 10 minute walk to your car beats sitting in the lot for a half hour or more.
I used to do some long walks to my seats but I don’t care for that anymore. For us parking 100 steps from the gate is a luxury I can live with. I don’t gripe the cost as much as the poor traffic control for getting out of the lots. We often beat the rush by watching the last half inning standing at the rails on the reserve section, near the gate.
It’s amazing how cheap and ignorant some Dodger fans are. The prices at other big league parks are much higher, I say this as a San Francisco resident.
I guess. Ownership is definitely putting the squeeze on the fans these days. They have more than doubled some seat prices over just the last two years, raising them especially quickly in the parts of the stadium where the tickets were the most affordable. I really don’t know how a working stiff family can afford the games anymore. And don’t get me started on the parking situation. The price of parking is one matter, the chaos in the lots after the games is another. In other cities at least you have alternative ways of getting yourself into the ballpark.
The dirty secret is that going to a game at Dodger Stadium has always been one of the best entertainment bargains in LA. This is still the case even with the Guggs in charge. Look at the prices for Laker and USC games, for example. Other entertainment options like Disneyland, Melrose district, concerts, museums are expensive as well. The cheapest tickets for a playoff game at Fenway are like $500, near the same at At&T.
Yeah it’s still definitely cheaper than the opera, with the only similarity being the fat lady singing at the end. Joking aside, a family of four could easily spend $200 for an evening in the ballpark. That’s a lot of money for a lot of people, and I for one hate to see the baseball experience get so costly that only the well-off can afford it. The price of Disneyland is just plain nuts now. I can’t imagine paying $100 for a ticket to see that place again.
Well, it’s the consequence of a high payroll. You either want cheap tickets or you get a low payroll. You didn’t expect to have both, did you? Clubs have to make money in all areas to keep up with the cost of big contracts. Simple business.
Ticket prices are not connected to payroll, not in the least.
It’s connected to making money. More money equals higher spending threshold which connects to a bigger payroll.
Your first sentence was right, then you cancelled it out with the second. Ticket prices are purely a what the market will bear proposition. What the team does with that revenue (keep it or spend it) is a business decision.
Hitting null the teams make way more $ off merchandise and TV deals then ticket sales some of these teams don’t even need fans to show up to be a high revinue team.
Ticket prices and payroll are connected, but not in the way most people think. Players get higher salaries because owners are able to charge more for tickets, not the other way around. If anyone disagrees, ask yourself a question. Do you think that if salaries were cut in half tomorrow owners would cut ticket prices to be nice to the fans? If you think they would, I have a bridge to sell you.
The logic that players should take small salaries so that owners can make the same amount of profits and “pass on the savings” to the fan is questionable. Owners will charge what the market will bear, regardless of cost. Remember, this isn’t your local grocery with competition on price and service. MLB teams are near-monopolies in their markets
They are complete monopolies in their markets.
New York has two teams, as does Chicago. While the fan bases are completely different, there is some competition in the market for eyeballs and ad dollars.
Point taken.
and it’s not just two baseball teams. there is huge competition in LA for the entertainment dollar. in addition to the two baseball teams, you have one nfl team—probably two in the near future. a couple nba teams, two nhl teams. then you have the colleges, usc, ucla being the biggest. horse racing, auto racing. if you want to compete for that $$$, you have to spend money. you can argue the dodgers spent poorly—-but you can do that with virtually any team. if judging talent were an exact science there would never be “busts” in the various drafts because you can’t know what is in a person’s heart.
I mean I get that the amount by which tickets/parking is increasing is crazy, but that’s inflation for you. Ticket prices are bound to go up, especially when your favorite team starts playing well/makes the playoffs. Also, playoff pricing is obviously going to go up because its the playoffs. Tickets are a supply-and-demand market. As long as fans want the tickets, and are willing to pay the increasing rates, the ticket prices will go up/continue to be expensive.
I mean.. Carl Crawford, Brandon League, Brian Wilson, Matt Kemp, Howie Kendrick, Jimmy Rollins, Juan Uribe, Scott Kazmir, Alex Guerrero, Erisbel Arruebarrena, Brandon McCarthy, Olivera, Brett Anderson, Bronson Arroyo, Dan Haren, Josh Beckett and Chad Billingsly…
If you want to find a scapegoat, bad contracts is one way to look
What? 50% of that list is no longer on the payroll.
They still spent that money though..
… and are now off the books meaning they’re no longer responsible for their contracts.
And again, half of those guys on the list made <$10M annually. That would be less to 3% of the Dodgers payroll in a given season. They even turned some of those players into net gains, most notably Olivera. Their real problems were the length in years to Ethier, Crawford, McCarthy.
Kazmir too. He’s getting 36 million over the next two seasons. Ryu isn’t a huge burden but I doubt he ever pitches again. Hopefully the Dodgers insured that contract.
Is Ryu really that hurt?
Ryun is gone forever, maybe pitches 10 more games in his life. Dodgers need to stop signing “top of the line” talent and focus on home grown talent (Pederson, Seager, Urias)
Um, they have. That’s been the plan for quite a while.
Yeah. Busted shoulders tend to end careers. He’s thrown five innings over the last two seasons and then needed elbow surgery this offseason.
Medicine has made great strides when it comes to elbows, but shoulders are still a mystery. Mark Prior and Brandon Webb come immediately to mind
Pity more MLB energy isn’t spent on a team like the Marlins, who profit from revenue sharing dollars rather than invest in a quality product.
You could also make the same comment on the Astro’s. But, they only avg 21k a game, can’t expect them to spend $110,000,000 a year.
Yeah, it’s not like the Marlins handed out the biggest contract in the history of baseball a couple years ago or anything.
I don’t get it, Cotts has the Dodgers at 170million right now, and down to 130 in 18, and 51 in 19.
Yeah I don’t think the person who drew this up really took any of that into account. I think they were just looking at the free agency period This season
Thank you. People here should read the frickin article and not just the headline. Dodgers can sign Kenley, JT and Hill and still fall within their own plan to reduce annual compensation expenditures as well as meet MLB expectations. If Dodgers don’t resign these three FAs it will not be because of any need to reduce expenditures!
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MLB itself deserves some of the blame here. There couldn’t have been much of a “down payment”, which of course led to a high “mortgage”.
So its time to raid the main roster and get a few of those prospects, tho Dodger prospects tend to be hideously overrated by everybody. They can likely finagle an A-Gon or Ethier deal in a package deal. Freidman had to do it all the time with the Rays; ain’t like he hasn’t been here before.
Part of the deal was assuming McCourt’s debt. Another aspect of this sale not discussed in the article was the fact that the purchase was out of bankruptcy. The court’s first responsibility in a bankruptcy is making the debt holders as whole as possible.
Or within the 5 year period end of 2018 in which they have roughly 106M coming off the books 45M of that comes off after this year.
Accountability finally!
How is it accountability please explain? The MLB approved a sale to an owner that couldn’t afford it. Thus burdening the team with 400M bankruptcy settlement. This has failure to vet an owner or insistence on ensuring a huge market spends little written all over Selig.
I hate to say that we’re still giving him money for the parking lots but, we’re still giving him money for the parking lot.
I don’t think any of this is too much of a surprise. It was indicated reasonably early that money would be used short term as a bridge to a stronger financial model, focusing on the fruits of a farm system that has been re-built since McCourt/Colletti neglected it. There simply wasn’t an influx of talent to bring up on the cheap at the time, but we’re seeing a shift now with the likes of Seager, Urias, De Leon etc.
The Dodgers needed to be competitive from day dot of the ownership takeover, and the only way to do that was to spend. That is their position of strength – financial resource, so it makes sense to use it. Heck, they’ve used that financial leverage numerous times in order to facilitate the main goal – acquiring young talent.
The payroll will decrease, there are no 6 or 7 year albatrosses to bog them down. No reason to be stressed!
Here’s a smart fella. I am a little nervous about retaining for agents this season, but in the big picture things are looking so much brighter than they were even five years ago
Absolutely. I too am a little nervous about Jansen and Turner going, but..this team is built for today, tomorrow and beyond. The Dodgers have financial clout AND a strong, well stocked farm system – a combination they haven’t had in years.
If it was all about spending money and not caring about future liabilities, Greinke would still be in Dodger blue, and on the payroll through 2022.
Dodgers should look to sign Chapman and Jansen. Also, try to acquire 3B and 2B in exchange for prospects. I don’t think this team is ready for the World Series. They spent way to much years ago and may pay for it dearly for years to come. I would look for the Giants to go the farthest next season out of all NL West teams.
Padres are in best situation for the future. They need to look for more pitching prospects, but it looks like San Diego could return to contention at a time when many NL West teams will be rebuilding or “retooling”.
I don’t think you’ll see the Dodgers rebuild or retool in the near future. When the team was “acquired”, they were short on MLB talent and the farm was absolutely shot to bits – yet they still won the NL West, first of 4 years straight so far. The farm system is now in fantastic shape, there is no reason to believe they aren’t going to be good going forward.
Fans of other teams wish it weren’t true, but it is.
True story. For all my own criticisms of ownership and the FO over many specifics, I also acknowledge they have created an organization that will remain competitive for some years to come. The open question is whether they will ever go the extra mile to make the team championship quality. With all the big spending in the rearview mirror and a very healthy cash flow going forward, they could very definitely replicate the Cubs resurgance. Until then I will wonder when or if that commitment will come to pass.
This is the best thing I’ve read from you in a long time. Faith restored.
Which I wholeheartedly understand. My only criticism of some of your posts is the fact this FO is only in the third season. In which they’ve deserved the leeway to work out of Colletti’s mess which was also necessitated and fostered by McCourt. They’ve actually impressed me to be honest by the complimentary pieces they’ve acquired. Its a whole different approach from the Cubs and kind of has to be because fans won’t tolerate a total tear down. As fans we are finally starting to see the core form. Which the grit and grinding nature of that core is far more exciting to watch than has been put out in the past.
You nailed it BlueSky, on point! Completely on board with you – now we need to see the fruits of the process. The pressure is certainly on.
Not to start an argument when we finally agree on something, but I remain skeptical about their commitment to delivering championship teams. I am also unimpressed by the selections they made when it mattered, meaning at the last two trade deadlines. These were two teams on the brink of the postseason with obvious needs that were left unfilled. They also stuck with some choices that were clearly not working out, far past their sell-by dates. Are they going to continue to cheap out when the big chips are on the table? You tell me, if you think you have an answer. I can only look at what I see.
I know it’s fashionable to criticize Colletti, but in truth he managed things pretty well under substantial constraints. He made some solid choices (and a few clunkers) as most GMs do but most importantly did not trade some of the young talent that is making an impact now.
This just revives the pain and anger of Dodger fans and how much of an epic failure McCourt was. That’s on the MLB.
That being said for fans that follow the team this truly is not news and doesn’t mean much really. The FO’s IFA spending spree felt like the last of a big spree. Yes we know they haven’t made a profit and necessary to make a profit. It means that they’ll have the ability to reup what they have but not much flexibility to do anything else unless they can move Ethier, Kaz,McCarthy, Puig etc… It’s been clearly evident in the contracts of both Kendrick and Kaz’s deferred money what was happening. So lucky to be paying Kaz 8M for the next 3 years yayyyy!!!!!
Luckily for them they have ~52M, with 45 against the cap coming off following this year (Ethier 18 2.5 buyout, CC 21, Guerrero 5). Next year they’ll have ~66M off. So just by virtue of being competitive they’ll probably be a little over the threshold this year. With a chance to reset the tax heading into 18 before they get destroyed by the tax.
Let us not forget the Fox ownership. The franchise’s key assets began a steep decline with their clueless approach to running a ball club. McCourt, for all the problems he created, was actually an improvement over Fox, and one of the reasons the undercapitalized McCourt was able to buy the team was because the of Fox ownership disaster.
Haha no energy to even hit on Fox.
This doesn’t really help:
(In millions of dollars)
Olivera 62.5
Puig 42
Yaisel Sierra 30
Guerrero 28
Arruebarrena 25
Y.Alvarez 16 + 16 tax
Yusniel Diaz 15.5 + 15.5 tax
Pablo Fernandez 8
Omar Estevez 6 + 6 tax
Yordan Alvarez 2+ 2 tax
Yasmanys Fernandez .1
Yadir Drake .1
Raydel Sanchez .25
Selme Angulo .08
Pablo Gonzalez .0075
Most of those were done to accelerate the farm. The Dodgers have a plan and they’re seeing it through it has always been designed this way and they’ve been very transparent about it.
g
12x debt to earnings seem pretty loose in the grand scope of things.
Well there goes the guts of the story. Nothing to see here?
Doug Padilla’s article is helpful. The spin that the LAT (added by unsubstantiated assertions in the the MLBTR summary) placed on this minor story was unfortunate. Dodger hating posters on this site just made it worse. Good to see ESPN correct the errors and I appreciate that MLBTR had the common sense and integrity to include this update.
The LA Times article was fine, it was just misreported. All you needed to read in it was this direct quote from Rob Manfred: “I think the Dodgers will be in a position that they can comply with our expectations in terms of the debt service rule, without any dramatic alteration in the kind of product they have been putting on the field,” among several others that made the same point.
Not a single word in the article supplied an implication that the Debt Service Rule would force the team to cut payroll, or prevent them from signing free agents. Unfortunately it was spun that way, which was only throwing red meat to the hyenas.
Blue Sky, what Manfred said is that the Dodgers will be able to run out the same guys they have, but not add any. “Without any DRAMATIC alteration in the kind of product they have been putting on the field”, certainly does not say business as usual as you are trying to imply.
As their roster stands today they have a payroll for 2017 of over $200 million. Not a single word in the article or in Manfred’s statement supplied an implication that the Dodgers would be allowed to continue spending the way they have or even add any free agents that would increase the payroll. Unfortunately, you are spinning it to mean just that.
I can see how as a Dodger fan you wouldn’t want your team to take a step back after 4 NL West titles, but that may be the reality of the situation if they don’t have young guys already in the organization that can step up and fill the shoes of Turner, Jansen, Hill, etc… They are not going to be able to simply sign anyone they want like they have the past few years. If they want to replace the guys that are leaving like Turner, Jansen and Hill, they are going to have to make trades from that deep prospect base or make trades that lower payroll in order to sign FA.
This was only one of several quotes in the two articles that completely refute everything you said. Manfred, again: “There are various ways to achieve compliance, and there is no mandate to cut payroll.”
Is that clear enough for you?
MLBTR runs story, story grossly misreported, mlbtr does no actual investigation and runs story.
Is mlbtr the tmz of sports? I ask that as an actual question.
The title of there website is MLB trade RUMORS. This is a rumor that they continue to update on. What’s the issue? You’ve been around this site long enough to know sometimes the rumors don’t shake out and it’s not like mlbtr is the only one reporting this. So no not the tmz of sports nice try.
Where’s the trophy’s.
See now that’s there the debt case in McCourt paid 412M on credit for a replica trophy which his wife probably got in the divorce lol. OMG it’s so shocking bad how poorly run that era was.
If you head down to Chavez Ravine, you can get a look at all 5 of them. If you would rather not make the trip, you can got to AT
I sent Freidman a check for 18 dollars, 47 cents…..that should cover his problems……
Could be a way to raid their fertile (if always over-rated) farm system. I can see Stearns in Milwaukee doing something like that (guy seems to be on the ball). Take Ethier, get some money add a couple of prospects….. Or maybe DD in Boston can take a couple of bad contracts for Porky Panda (Dodgers need a 3B, even if Porky sold his glove for a truckload of lard) and get some youth…..
You sound so intelligent and so funny(sarcasm). The Dodgers don’t have the length of bad contracts to justify trading for Sandoval unless the Soxs are eating 90% of that contract in 2018
Nobody is sending money and or prospects for Ethier. It’s another sunk Colletti contract. Even if the Dodgers wanted to trade him he’s driving the bus with his 10-5 rights. It’ll fall off the books this year anyway. They have a lot of youth on the cusp. But hey congrats on doing the research and sounding like you know what you’re talking about(sarcasm)
Meh, have a fire sale already.
The Doyers don’t have to cut payroll to address their debt service, they just can’t increase it from the approximately $205.5 million they have on the books for 2017. $172 million in guaranteed contracts for 8 players on the roster and 7 who are not, $28 million for arbitration eligible players by MLBTR projections, and $3.5-4.0 million for the 7-8 guys at major league minimum to fill out the roster depending on whether we have 25 or 26 man rosters in 2017. NO free agents for the Doyers unless they trade away some salaries.
I don’t know who the Doyers are, but if you’re talking about the Dodgers, you can keep telling yourself that. Even IF the Dodgers stayed with the roster they have now, they would still be better that the Madres. Madres will still be bottom dwellers, as they always are.
If that’s what you gleamed then you are sorely mistaken. They’ve been paying the debt and they can definitely add FA. What destroyed the calculator for the past year were one time expenditures in IFA(100M) and (200M) Stadium improvements. So they can add FAs they just can’t go crazy. They can’t hit past the ~230 mark for example. They just had 45M come off the books and they have non tenders. They are living around the 8% mark without the one time expenditures. So yes they can resign Turner and Jansen etc especially knowing they have 50M, with 45 against the cap next year and 60M coming off the cap the year after. They raised ticket price and stadium expenses so rev goes up. They shed the one time expenditures debt model goes down. They can also reallocate portions of one time expenditures into the debt and debt goes down. They can sell a share of their stock to reduce the debt. They have so many avenues that don’t call for a fire sale. Notice that this in fact will not even pose a problem until the end of next season. What I find most funny is people mistakenly think payroll is the one and only form of debt. They will continue to pay into their debt as they have. I’m sorry to inform you that yes they can spend on FA but the caveat being they can’t run a train and sign both Jansen and Chapman. It is also entirely possible that they sell shares and eliminate a huge chunk of debt or it all together. Just please do the research.