Left-hander Blake Snell and the Dodgers reportedly agreed to a deal a week ago and the club officially announced it on the weekend, but the finer details of the pact are still trickling out. Per Jon Heyman of The New York Post (X link), the $182MM guarantee breaks down as a $52MM signing bonus followed by $26MM salaries in each of the five years of the deal, though with $13.2MM deferred annually without interest. There’s a $5MM assignment bonus if Snell is traded. Additionally, there’s a $10MM club option for 2030 under certain conditions: if Snell hasn’t been assigned to another club and has 90 or more days in a row on the injured list due to specific injury.
Many of these details came out in the initial reporting, including the guarantee, the signing bonus, the assignment bonus and that there were significant deferrals. However, the deferrals are slightly higher than initially thought. The numbers reported last week were $13MM in annual deferrals for a total of $65MM, but we now know that it’s slightly higher than that, with the $13.2MM annual figure actually getting the total number of deferrals to $66MM. Per Bob Nightengale of USA Today (X link), the MLBPA calculates the net present value of the deal at $150.336MM.
But the conditional option is the most significant new development today, as there was no prior reporting about Snell’s contract extending into the 2030 season in any way. Now it’s known that the Dodgers could potentially hold onto Snell for a sixth year, though only under certain circumstances.
Given the conditions, it seems it gives the Dodgers a bit of an insurance policy in the event Snell ends up with a significant injury over the course of the deal. Presumably, the specific injury would involve something related to his pitching elbow, whether that’s Tommy John surgery or some internal brace alternative. Such surgeries have become increasingly common in baseball in recent decades but still require pitchers to spend upwards of a year recovering.
Assuming that is the specific injury covered in the contract, the Dodgers would have the choice of keeping Snell around for an extra year, compensating them in a way for the lost year. Snell will be 37 years old by the time 2030 rolls around, so it’s anyone’s guess what kind of form he will be in at that point, especially if there’s a notable injury along the way. But $10MM is already not a lot of money for a starting pitcher.
Last winter, veteran back-end guys like Kyle Gibson and Lance Lynn got $13MM and $11MM guarantees on one-year deals, respectively. Wade Miley and Alex Wood were not far behind at $8.5MM. Inflation generally pushes salaries up over time, so those kinds of deals might creep up a bit between now and 2030.
It’s also possible Snell’s future talent level is above where those guys are now, given that he’s a two-time Cy Young winner and has had a more impressive peak than anyone in that group. Not all pitchers can maintain that kind of performance into their late 30s, but those who do are handsomely rewarded. Max Scherzer, Justin Verlander and Zack Wheeler were each recently able to secure salaries of $42MM or higher for deals that covered their late 30s or early 40s, so Snell at $10MM could be a massive bargain if he continues to pitch well over the course of the deal.
The fact that the option is also conditional on Snell not being assigned to another club is also interesting, as it could reduce the chances of Snell being traded while hurt. Robbie Ray underwent Tommy John surgery while with the Mariners and found himself traded to the Giants before he recovered from that procedure. If Snell ends up missing some time and unlocking that option for the Dodgers, they might be more inclined to keep him and take advantage of that option. All of this is moot for now, but it could become relevant down the line, depending on how things play out in the next five years.
Here come the crybaby posts about deferrals. WAAAAAAAAAAA>
Zomg! Why does my owner suck!? I h8 LA! Fake fans! The show up in the third after Botox!
lol I forgot that ‘zomg’ ever existed. Thanks for ruining that for me
That’s what it takes to buy a Championship!!
I mean that’s fair. If the guy has a wasted season due to injury, it’s a nice insurance option to consider at $10MM for 2030. That’s the going rate for a SP 5 these days…
Its doubtful that the injury would occur at the exact moment necessary to only effect one season. It will likely effect two. What a bargain!
This isn’t the “Astros to Sign Juan Soto” post I’ve been manifesting today.
That would be wild
It won’t happen but wow would people hate the Astros lol
Take some heat off of the dodgers
Please cry here.
Can anyone explain how the team benefits from giving a player a large signing bonus and deferred money?
I’m assuming there’s a tax advantage?
The signing bonus doesn’t benefit the team, it benefits the player. Snell lives in Washington, so he won’t have to pay the higher California state income tax on that signing bonus money.
The deferred money is like buying Christmas presents on a credit card. They look great under the tree, but at some point, you have to pay those bills.
So then what’s the advantage to the team to defer the money?
They cheat on their luxury tax bill. The players cheat on their taxes.
@KnicksFanCavsFan It can invest the deferred money, with conditions, and it’s paying the player in cheaper money.
The dollar in 2030 for example may be worth 80 cents in 2024 money. Say you agree to pay me $1,000,000 to fix your house, but you only have to pay me in 2030. By then you’ll be paying me with what effectively amounts to $800,000, and you’ll also have been able to invest that money. Say you can get roughly 4% interest. You’ll have been able to turn that 800k into 1m (more or less).
So you’re paying with less money in current dollars, and you’ll have been able to do other things with that money in the interim.
Time value of money
bitter mets fan….
@metsin4; And your next post will be proof of this in black & white?
I’m not bitter about it at all. I could care less. I’m just stating why the team and players agree to it. The players are avoiding California taxes when they get the money and Ohtanis case avoiding US federal taxes. The team benefit from lower tax hits.
The players don’t have to pay California income tax after they aren’t playing their and live in a lower tax state or no tax state. It’s not rocket science.
Assumes the value of the dollar will go up.
Really? Sad little take.
Metsin4 what? Millennia?
No matter when they get paid, they pay taxes where the income was earned. For MLB players that is where each individual game was played.
That’s not true at all. California 100% taxes the whole income of players salary from players in their state. The jock tax is an added tax that goes on top. Do you pay your retirement income to the state you worked in? Absolutely not. It’s the state you currently reside in.
He lives in Washington, Signing bonus counts as Washington income. His base salary will be taxed by California. That’s the benefit of a signing bonus for Snell, he saves money on state tax.
Mets, that is not even close to true. California STATE taxes are on WHERE you earn the money. I am a California resident and earn income all over the world. I pay STATE taxes in California on income earned in California.
There is no such thing as a “jock tax”.
Not old enough that I am forced to take disbursements from my IRA, but when I do I will pay them in California.
Deferred income for players is not an IRA. Its income earned where they played the games and taxes will be paid where they earned that income. It doesn’t matter how long its deferred.
If you think the state of New York and the State of Massachusetts and the state of (fill in the blank) is going to give up the taxes on income earned in their state you are out of your mind.
THAT is true. He will save tax money by living in a state with a low or no state income tax and taking a large portion of his deal as a signing bonus.
He won’t skip paying taxes by deferring salaries.
It’s paying the player in cheaper money.
The team benefits by getting the big name player who puts butts in seats and eyes on the TV screens.
It’s a good signing for LA but too many risk factors, he could be a number 1 but realistically a number 3 starter. Good signing though
Know a lot of “number 3 starters” with two Cy Young awards and a 128 ERA+ for his career, do you?
Not a lot of two time CY Young award winners that would have his remaining numbers if you removed those two years from his record. He’s had 2 1/2 years of excellence in a mediocre and injury prone career.
@Fg-3
A #3?
He was literally the most unhittable pitcher on the planet from July onward this past season, and already has multiple CYAs on the mantel.
But sure.
Name one number 3 starter with 2 CYs. I’ll wait.
Snell will be 32 tomorrow. An option on his year 2030 season–where he will be 38+–may not be all that exciting. Of course, he usually doesn’t pitch that many innings, so
Good codicil. Some guys just know how to rest.
There is more coming. Hearing that 2030 season can also vest for Snell at just a wee bit more. Like $22 million more.
Boo! Duck the ducking Fodgers!
No one hates the Giants. You need to be a factor first before you get the vitriol.
Most Patriots fans hate the Giants. Oh, baseball? No, the Giants dont even register as a nuisance.
Not a Giants fan but a fan of truth. More WS wins than any other team in the past 15 years?
Not a “factor first”?
some of us live in the now
@longtimecoming
The bill has come due on those championships as evidence of anything other than the Giants once were much better than they’ve been for a decade now (and, considering their opponents in said WS, were also far luckier in Octobers long since past).
I mea, the Giants aren’t even thought to be the Dodgers’ biggest DIVISION rival anymore. They’re a rich team (albeit with a garbage-human owner) who can’t give away their money to a position player no matter how hard they try and no matter how much they’ll overpay.
They’re not a factor, and to argue differently is silly.
LOL there isn’t one single person on the Giants who was around for those wins. Yeah, the current Giants isn’t even close to being a factor
Yet read the post that I responded for context.
Have to be a “factor first”, talking about the past for reference of not getting vitriol from fans.
That was not a “right now” or even “last year” context.
It isn’t hard to say that Giants have not been relevant for a few years but to act like they haven’t been relevant in recent (like the past 15 years which if you are over 40 isn’t very long but if you are in 20’s I get it, that seems like forever ago) memory is wrong.
“LOL there isn’t one single person on the Giants who was around for those wins.”
If that is your criteria, that fits every team except the last 4 or 5 maybe?
You expect the same players to be on the same team years later? Dope
Longtime: yeah, you are going to have to live on that for a long, long, long, time.
The reliance on $66 million in deferred payments and a narrowly defined conditional club option in Blake Snell’s contract may limit the Dodgers’ future financial flexibility and roster adaptability. These provisions create potential inefficiencies, as they tie up resources in a deal that offers little recourse if Snell’s performance declines or injuries occur outside the specified conditions.
They really, really don’t, comrade. The option can only be of positive value to the Dodgers, given they can simply ignore / reject it if they like. Further, escrowing money that you retain some investment options for, that you’d otherwise be paying the player hardly limits future financial flexibility. In fact it creates that flexibility.
As for Snell getting hurt, that’s baked into the price and is also true of every player. The Dodgers aren’t paying him as they would a guy who goes 180 IP every year.
@JackStrawb
The conditional option sounds good in theory, but it’s so narrowly defined that it’s unlikely to offer much real benefit. By 2030, $10 million for a pitcher will barely move the needle, even if Snell hits the specific criteria.
As for the deferrals, they don’t really create flexibility. That $66 million is still a future obligation that limits how the Dodgers can allocate their budget over the next five years. Escrowing money might make sense in some cases, but here, it adds unnecessary complexity and risk to a contract for a pitcher whose consistency and durability are already concerns. Injuries are always factored in, but that doesn’t make this deal any less of a gamble.
@OldYork
You realize who owns the Dodgers, right?
You understand what it is that Guggenheim does, yes?
You think the opportunity to invest future monies owed will hamstring Guggenheim…? Hahaha….OK…..
@CommentsSectionCommenter
Understanding the Dodgers’ ownership doesn’t change the fundamental point: financial flexibility is about optimizing resources, not just having deep pockets. Guggenheim’s wealth doesn’t mean the Dodgers are immune to inefficient contracts.
The $66 million in deferrals doesn’t magically “create” flexibility; it’s still money owed, limiting the team’s ability to pivot in future offseasons. Investing deferred payments may benefit Guggenheim, but it doesn’t necessarily help the team on the field.
And let’s not pretend the narrow conditional option is a game-changer. By 2030, $10 million for a 37-year-old pitcher likely recovering from injury isn’t a strategic asset — it’s a rounding error. Just because they can spend doesn’t mean they should spend unwisely.
@OldYork
“Just because they can spend doesn’t mean they should spend unwisely.”
I couldn’t agree more–and welcome to guiding principle of the Los Angeles Dodgers (Trevor Bauer notwithstanding)…..
A severe overpay
Take Snell all day on that contract over what Montas and Boyd just got
Contract seems as if Snell might ease up on his pitches to avoid TJ as best he can this may impact his effectiveness on the mound.
The condition is if he doesn’t perform at a Cy Young level the team will throw him out like yesterday’s garbage and buy the next big superstar, to which their clown “fans” will tell you to stop crying and that their favorite owner could do it too (presumably having to spend personal funds, which these morons should know owners don’t do). Oh well. No need to watch MLB anymore. I hear the KBO is good. Less capitalism over there.
@ManfriedIsAJoke
Zzzzzz……….
Wow cry harder dude
We are all going to miss ManfredIsAJoke aren’t we?
Manfredi is another sad puppy. Let’s guess what his favorite team might be. A’s? Nah. Pirates? Uh uh. Got it. White Sox. Right?
Could Snell still be legit for six more years? Health is a very large concern for the Dodgers here.
Snell has a floor of 104 innings across his career (135 IP avg for the last 4 seasons and 26 GS / year), generally at a HOF level, where a 125 ERA+ is around the minimum for most HOFers starting pitchers. Snell’s at 128 for his career and 126 for 2021-2024.
The Dodgers will go into the season with as many as six #1 SP. If they can nurse 3 of them to the postseason, they’ll be thrilled. His health is very, very secondary to the peak performance they’re looking for.
This is all about winning another World Series—nothing else.
You mean buying another World Series. Mission accomplished.
@Manfred
Which plucky group of unpaid interns to you root for, Manfred?
@JackStrawb
Precisely this.
The six-man rotation (that will be more like a 9/10-man rotation, if we’re counting semi-phantom IL stints, etc., and barring another rash of staff injuries) is designed to ask very little of anyone in June/July/August.
Because only October matters now.
Jack, Absolutely. If your team can afford to pay 9 quality starting pitchers knowing that only 5 will be healthy at any one time, its a solid strategy to sign guys like Snell and Glasnow that you know will not be available for more than 2/3 or the season but are TOR starters when healthy. Just rotate them in and out and hope that they all don’t go down at once. Only two or possibly three teams have that amount of revenue.
all a team can do is sign the best players available. injuries are a danger for all players, all teams. as for the length of the contract, that’s more of a financial amortization factor than expecting to have no IL stints over six years.
So, with Ohtani’s 68M, 13.5 for Snell, plus another 50 million for Freeman and Hernandez, factor in other deferrals that run from 2030 until 2045 and the Dodgers have already maxed out their payrolls for those fifteen years without paying a single player on their team during those years. If anything happens like a war, the economy crashes, tariffs bankrupt the people and corporations, and the Dodgers have snookered themselves for the here and now. That is why other teams are responsible for their budgets. No one knows what the future holds and they aren’t trying to sign all the best players. There are 30 teams in MLB, NOT just the Dodgers, Mets and Yankees. If they are determined to use the other teams as their farm systems, just create a premier league with the six teams that exploit the league and put the other 24 teams in a second=tier, third tier, where the top six can’t sign all the best players, leaving them as weak links..
@Ashley
so which is it?
“Dodgers have snookered themselves for the here and now. That is why other teams are responsible for their budgets.”
or
“the top six (teams) …sign all the best players, leaving the others as weak links.
@Ashleyr
What?
Deferrals will probably not even be discuss in the next CBA. The current system benefits both the teams and the players. why would it even come up?
Exactly. And it was specifically voted on in this current CBA with unanimous approval. People only like to whine when the dodgers do it
The Dodgers defer salaries. Padres sign Bogarts to an 11 year contract. Both look like methods to spread costs and stretch salaries. to reduce cap penalty. What’s the difference?
So, when do we hear that the Dodgers are announcing the signings free agents Burnes, Fried, Adames, and Soto. Why not you know they want to just have to figure out the deferral arrangements.
Anyone have ideas on what would happen in that Option season if the Dodgers wanted to exercise but Snell wanted to retire?
Snell walks away and then no money is owed or paid out.
He retires. He is not a slave.
So he agreed to a $10M version of the John Lackey clause, Lackey agreed to a Red Sox option for a league minimum deal if he missed most of a season with a pitching injury.
Pound of flesh clause?