Billionaires, Millionaires, and Me

Expressway to a work stoppage?

“…then there’s Pirates fans.”

I’m a gleeful practitioner of east coast bias. I truly think all things sports go out west to die, be they players or teams, with the exception of maybe in basketball. Barry Bonds’ balance breakfast-fueled run in the early 2000s coincided with the peak of my adolescent obsession with baseball, and yet other than the occasional SportsCenter highlight, I barely remember watching any of it (though I did watch this dinger live). Why? Because he played in baseball Siberia, and all his games started after 10 PM.

I remember getting clowned on in my baseball group chat for saying that Robinson Canó would regret leaving the Yankees for the mountain of cash the Mariners gave him. Seattle?! He’ll never be heard from again! Sure enough, not only were there reports that Robbie desperately wanted to go back to New York, but, don’tcha know, after his first PED reprimand, Yankees ex-players and executives alike hinted that they’d long had their suspicions, implying that maybe Canó’s departure was part of the plan all along. Luckily, Canó would get his wish of returning to the Big Apple, though he’d have to really bust his ass to get there:

It’s not just that no one here in the northeast — the center of the sports universe — cares about what’s going on 3,000 miles and three time zones away. Even the people who live on the west coast don’t give a shit. The stereotype of Dodger fans leaving games in the sixth inning is well established, but I was scandalized by this ovation Corey Seager got at Dodger Stadium during the 2022 All-Star Game player intros, just months after signing a $325 million contract with the Texas Rangers:

Can you imagine Yankee fans cheering Juan Soto next year if he winds up going to the Mets? It’s a point I neglected to make in my last newsletter, but while I think Hal Steinbrenner and Brian Cashman would probably need Secret Service to show face in the tristate area ever again, if Soto winds up in Queens even he would feel the heat. Grimace be damned, the Yankees are still the more popular local team, and spurning them would ensure persona non grata status among the lion’s share of New York baseball fans. And we’re a fiery bunch. He’d need a Kevin Durant-level disregard for public opinion to shake that.

But Dodger fans are mellow— at least, when they’re not brutally assaulting Giants fans or derailing games by throwing trash at Padres players. Maybe it’s because, between losing big names like Trea Turner, Max Scherzer, Manny Machado, and Zack Greinke in free agency, just to name a handful, they’re used to it. And I bring that up because, in light of the five-year, $182 million contract Blake Snell just signed with LA, there have been a lot of misconceptions of the Dodgers as an uber team with an insatiable appetite for superstars, and it’s almost as annoying as the disingenuous defenses of their luxury tax manipulation.

First off, the notion that the Dodgers “didn’t need” Snell is hilarious. LA’s pitching staff was so decimated by injury by the end of this season that they needed to throw four bullpen games during the playoffs, and in Game 5 of the World Series had to bring in starter Walker Buehler to close on short rest— “our last bullet,” as manager Dave Roberts later conceded. Both Buehler and Jack Flaherty are now free agents, meaning that before the Snell signing, the only starting pitcher from their postseason roster still under contract was Yoshinobu Yamamoto.

Then there’s the idea that the Dodgers have now assembled “a rotation for the ages,” which overlooks the fact that, of their big four — Snell, Yamamoto, Shohei Ohtani and Tyler Glasnow — Ohtani will be returning from his second Tommy John surgery, Glasnow will be coming off a season-ending elbow injury, and Yamamoto missed three months last season with a rotator cuff injury. It’s also not like Snell’s been super durable over his career.

Bobby Miller Game 1 starter incoming

The rest of their pitching depth is made up of high upside question marks— Tony Gonsolin (coming off Tommy John), Dustin May (coming off a second elbow surgery), and of course, Clayton Kershaw (officially at the “give it a go” stage of his career). The Dodgers showed this October that they can win with a thin pitching staff, but they’re barely a year removed from being swept by the 84-win Diamondbacks, in large part because injuries (and Julio Urías being a scumbag) forced them to give the ball to the likes of Bobby Miller and Lance Lynn.

It’s interesting, because while inking a two-time Cy Young winner in Snell is a blockbuster move, in addition to Buehler and Flaherty, left fielder/Yankee killer extraordinaire Teoscar Hernández and closer Blake Treinen are also free agents. And this is otherwise the same team that most experts picked to lose in the NLDS a month and a half ago. But suddenly, the Dodgers are a superteam to be either praised as an example of how every team should operate, or condemned for breaking Major League Baseball. Both sides miss the point.

The praise boils down to this: if you don’t like it, take it up with your favorite team’s owner, because any other franchise can do the same. The problem with this argument is that this isn’t about the Dodgers spending, it’s about them not spending. Of the whopping $700 million LA owes Ohtani, only $20 million — or $2 mil per year — will be paid to him over the 10-year length of his contract; the remaining $680 mil will be deferred to him between 2034 and 2043. Not only is Ohtani practically playing for free in raw money terms, but the deferral structure allows the Dodgers to circumvent the Competitive Balance Tax (CBT), baseball’s version of a soft salary cap.

Basically, there are a series of payroll thresholds— teams that exceed the lowest one pay a tax for every dollar they go over it, and that tax increases if they exceed it a second or third consecutive year. The higher thresholds carry additional surcharges, plus some draft penalties. For CBT purposes, each team’s payroll is tallied using the average annual salary (AAV) for all player contracts. So, if Player X has a three-year contract that pays him $15 million in 2024, $20 million in 2025, and $25 million in 2026, his tax hit each year is $20 million ($60 mil divided by 3).

But since the present value of Ohtani’s contract is roughly $460 million, his annual tax hit is $46 mil, meaning the Dodgers effectively get $24 mil in tax free money to play with each year. That goes a long way towards covering the $27.08 mil annual tax hit for Yamamoto, who very coincidentally signed with the Dodgers soon after Ohtani did. MLB Trade Rumors argued that LA isn’t skirting the luxury tax because the $700 million figure was illusory— the present day value is still the biggest contract in history by both total money and AAV, so the CBT values Ohtani fairly. This ignores the fact that the Dodgers will be paying Ohtani two-hundred and forty million dollars that go completely unaccounted for. But hey, maybe that’s a me problem:

That podcast sounds riveting

The reality is that Ohtani deferring ninety-seven percent of his contract is completely unprecedented, and as it was proposed by Ohtani and his agent, the arrangement really just fell into the Dodgers’ laps. In fact, Brian Cashman, the longest tenured general manager in baseball, who’s negotiated more big money deals than anyone, said he had “never, ever" been offered a contract with that kind of deferred money. And before you say that he should’ve broached the idea himself, even Dodgers GM Andrew Friedman admitted he “wouldn’t have had the guts to propose it.”

On the other side of the spectrum, you have the Little Guys complaining about how the Dodgers’ seemingly limitless spending is ruining the game. Yes, they’ve handed out as many nine figure contracts in the last year as the rest of MLB combined, but let’s again remember how many big names they’ve let walk. Can you imagine the Yankees letting Manny Machado go to a division rival, even after just half a season with the team? Hell, he never even was a Yankee and Yankee fans were still upset over him! Well, maybe not this kid:

The contract has aged like milk, but even DJ LeMahieu was once a must re-sign in Yankeeland. Friedman is former general manager of the Rays, a team notorious for making dispassionate personnel decisions, and because of the laidback market he’s in now, he’s able to maintain the same modus operandi. As a result, the Dodgers are perennially flexible, always in position to make a splash when it makes sense. And they’ll only be emboldened by Ohtani’s stupidly team friendly contract.

If you can believe it, the Dodgers are still only third in current payroll behind the Phillies and Yankees (thanks, Shohei!). But since they are gaming the system to suppress that number, let’s say they are spending too much. Well, isn’t there such a thing as not spending enough? I’d never actually looked at how much money teams receive in revenue sharing until just recently, but per Baseball-Reference, a whopping 48% of local revenues are distributed equally among all 30 teams, which in 2018 came out to $118 million per team. That’s more money alone than the total payroll of 11 teams the following season according to Spotrac:

And that doesn’t count the additional $91 million each team received in redistributed national revenues, in which case, only the Cubs, Yankees and Red Sox spent more. It’s not like I’m uncovering some secret. In 2020, the MLB Players Association filed a grievance against the Pirates, Rays and Marlins for pocketing their revenue sharing funds. With MLB revenues on the up and up, one could only assume those redistribution shares have gotten even bigger, and yet the same culprits remain. I get why small market fans feel hopeless, but a salary floor is far more warranted than a salary cap. Force small market teams to spend their handouts, and count all deferred money towards the CBT. Presto, problem solved!

The catch is that any calls for a salary floor from big market teams will be countered with calls for a cap from small market teams, and according to Ken Rosenthal, that could lead to a work stoppage when the current Collective Bargaining Agreement expires at the end of 2026. And it would all be because no one can play fair— not the small market owners who treat their teams like ATMs, not the Dodgers exploiting the luxury tax rules, not even Ohtani trying to weasel his way towards forming his own Heatles.

But the silver lining is that we’ve got a couple seasons until then, and for all of us rooting to see the Dodgers’ budding dynasty come up short, we’re likely to get our druthers. Beside the simple fact that we haven’t had a repeat Word Series champion in 24 years, I saw this tweet after the Dodgers’ recent extension of Tommy Edman, and it reminded me of another recent superteam that hacked free agency:

Like LA, the Braves are stacked, and have, through some weird devil magic, gotten players to agree to some truly, blatantly bad contracts. They too have a World Series title under their belts already, looking to add more. And yet, in the three years since their 2021 Cinderella run — despite being markedly better on paper — they’ve been eliminated by wild card teams. I remember all too well in 2004 how Bad it was for baseball when the Yankees swooped in and got Alex Rodriguez after the Red Sox trade to acquire him was vetoed, humiliating Boston just months after Aaron Boone broke their hearts. By the end of that season, this photo became emblematic of just how completely the tables had turned, and the Sox would go on to win two World Series before A-Rod’s Yanks could get one. No matter how unfair the Dodgers’ shenanigans are, these things generally have a way of sorting themselves out. Because, well—