The Los Angeles Dodgers enter 2017 with the highest payroll in baseball – the fourth year in a row that they have managed to do so.
$241 million. That’s a lot of money unless you’re the Dodgers. They probably just have Magic Johnson roll up with a dump truck full of money every quarter and unload it in center field. It almost seems unsustainable that they have been doing this. It probably is. As everyone knows, this all is possible because of a disaster $8.3 billion TV deal paid out over 25 years.
How do the Dodgers compare to the rest of the league in 2017? Per Dayn Perry of CBSSports:
- Dodgers $241 MM
- Yankees $201 MM
- Red Sox $199 MM
- Tigers $199 MM
- Blue Jays $179 MM
- Rangers $175 MM
- Giants $172 MM
- Cubs $172 MM
- Nationals $167 MM
- Orioles $163MM
That’s a fairly sizable gap between the Dodgers and Yankees. What’s worse for the Dodgers is the luxury tax. The MLB threshold for luxury tax in 2017 is $195 MM. Since 2013, the Dodgers have blown past the luxury tax and have not looked back. Every year that a team is over on the luxury tax, they must pay a percentage for each dollar spent over the limit. This percentage increases for repeat offenders. Starting in 2018, teams may even begin to lose draft picks for being over. Forbes has an excellent breakdown of the new collective bargaining agreement and is where I got some of the above information from.
What Goes Up Must Come Down
Not only does the luxury tax limit increase to $197 MM, the Dodgers have a project $170 MM on the books (before arbitration is factored in). A large part of that is Carl Crawford’s 21 MM/year and Alexander Guerrero 7.5 MM/year contracts coming to a merciful close. Andre Ethier will be a free agent as well. In 2019, there is an even more drastic drop to $107 MM. That’s a steep elevator ride, $241 MM to $170 MM to $101 MM. This is just in time for some high-priced free agents.
The 2018-2019 free agent class is likely going to be the best within the last 25 years. That is not hyperbole – look at this list.
Bryce Harper, Manny Machado, Clayton Kershaw, A.J. Pollock, Matt Harvey, Dallas Keuchel, Andrew McCutchen, Daniel Murphy, Josh Donaldson, Yasmani Grandal, Brian Dozier, Charlie Blackmon, David Price, Cody Allen, Jeurys Familia, Andrew Miller, and Zach Britton. This doesn’t even include players like Adrian Gonzalez, Brian McCann, Wilson Ramos, DJ LeMahieu, Jean Segura, Elvis Andrus, Adrian Beltre, Adam Jones, Jose Bautista, and Nelson Cruz.
The Dodgers have an opportunity to not only drop below the luxury tax limit, but they are also going to have the opportunity to sign someone of Manny Machado’s caliber. The Dodgers have had a top ranked farm system for the last few years, and players like Corey Seager, Joc Pederson, Grant Dayton, Cody Bellinger, Walker Buehler, Yadier Alvarez, Mitchell White, and Alex Verdugo will give them talent at an affordable rate.