The Los Angeles Dodgers, current World Series champions, have implemented a financial strategy that has left many with their mouths open. With a debt of almost a billion dollars in postponed contractsthe team has revolutionized the way they manage their finances, achieving immediate successes and raising questions about the long-term future.
The story of the Dodgers and deferred contracts began with bold moves in free agency and has evolved into a financial colossus. One of the most recent and notable examples is the signing of Blake Snell, winner of two Cy Young awards, for a five-year, $182 million contract, from which 60 million are deferred. This tactic allows the Dodgers to maintain flexibility in your annual budget, avoiding tax penalties and leaving room for more stars on your roster.
Enlarge
This approach has borne impressive results: Since 2020, the Dodgers have won two World Series, breaking a drought of more than 30 years. However, the strategy has also generated controversy and criticism from fans of other teams, who see in the Dodgers to a giant that plays by its own rules.
Featured Postponed Contracts
| Player | Contract total | Deferred money | Payment period |
|---|---|---|---|
| Blake Snell | 182 mdd | 60 mdd | 2029-2034 |
| Shohei Ohtani | 700 mdd | 660 mdd | 2031-2041 |
| Teoscar Hernandez | 23.5 mdd | 8.5 mdd | 2030-2039 |
| Mookie Betts | 365 mdd | 115 mdd | 2032-2044 |
The total sum of the postponed contracts of the Dodgers total a staggering $962 million, leading the league with a significant lead over any other team. This figure includes the contract of Shohei Ohtani, who agreed to defer $680 million of his historic $700 million contract. In 2020, Mookie Betts signed a 12-year, $365 million deal, with $115 million deferred. Other players like Freddie Freeman y Will Smith are also on the list, with more than $100 million combined in deferred compensation.
Even players with more modest contracts, such as Teoscar Hernández, who signed for one year and $23.5 million, will receive deferred payments. Hernández, for example, will obtain 8.5 million between 2030 and 2039.
The benefit and controversy
The tactic of deferring payments allows the Dodgers to not only avoid luxury tax thresholds, but also create a window of opportunity to sign more talent without facing immediate tax penalties. Players also benefit: Ohtani, for example, could avoid paying up to $90 million in California taxes by moving out of state when his deferred payments take effect..
Enlarge
However, this strategy has generated discomfort among legislators and fans. The state senator Josh Becker expressed his concern in April: “It is disturbing that Shohei Ohtani and other individuals can make a backdoor move using a tax loophole to avoid paying hundreds of millions of dollars, perpetuating income inequality.”
History and context
The use of deferred contracts is not new in MLB. Bobby Bonilla, one of the first to popularize this strategy, He began receiving $1.2 million annually from the Mets in 2011, a payment that will extend through 2035. Other teams have also followed this practice, but none to the level of the Dodgers. The Mets, for example, will pay 76.5 million between 2032 and 2042 for the contracts of Francisco Lindor and Edwin Díaz. Los The Boston Red Sox owe $75 million in deferred payments to Rafael Devers as part of his 10-year, $313.5 million contract.
MAYBE YOU MAY BE INTERESTED: The Yankees’ alternatives in case they lose Juan Soto
The Dodgers have taken this strategy to another level, not only winning the World Series less than a month ago, but also qualifying for the playoffs in each of the last 12 seasons, maintaining one of the highest payrolls in the sport.
The future of the Dodgers
The question that remains is whether this strategy is sustainable in the long term. With nearly $1 billion in deferred payments, the Dodgers will have to carefully balance their budget in the coming years to avoid a financial crisis. But for now, the strategy appears to be paying off, with a star-studded team and an enviable record on the field.
The use of deferred payments will continue to be a part of baseball until at least December 2026, when the current collective bargaining agreement expires. Until then, the Dodgers will continue to take advantage of this tactic, seeking more championships while other teams watch with envy and concern.
Follow the Diario AS channel on WhatsAppwhere you will find all the sport in a single space: the current news of the day, the agenda with the latest news of the most important sporting events, the most outstanding images, the opinion of the best AS brands, reports, videos, and some humor from time to time.
