{"id":6005,"date":"2024-11-28T10:42:05","date_gmt":"2024-11-28T08:42:05","guid":{"rendered":"https:\/\/theplayoffs.news\/en\/?p=6005"},"modified":"2024-11-28T12:15:10","modified_gmt":"2024-11-28T10:15:10","slug":"dodgers-making-deferred-payments-a-strategic-masterclass-or-a-blatant-abuse","status":"publish","type":"post","link":"https:\/\/theplayoffs.news\/en\/dodgers-making-deferred-payments-a-strategic-masterclass-or-a-blatant-abuse\/","title":{"rendered":"Dodgers making deferred payments – A strategic masterclass or a blatant abuse?"},"content":{"rendered":"

When the defending champions Los Angeles Dodgers signed Blake Snell to a 5-year, $182 million contract<\/a> with $62 million deferred, my rookie baseball brain immediately searched three questions on Google:<\/p>

    \n
  1. Does MLB have a salary cap?<\/em><\/li>\n\n\n\n
  2. How does deferred salary work in MLB?<\/em><\/li>\n\n\n\n
  3. Are the Dodgers’ owners from Saudi Arabia?<\/em><\/li>\n<\/ol>

    Spoiler alert: <\/strong>There is no salary cap, deferred salaries are the Dodgers’ new favorite financial tool, and no, the ownership group doesn’t have any Saudi connection… yet.<\/p>

    What do deferred payments mean in MLB?<\/h2>

    For those who are financial novices (like me!), deferred salary is essentially a team saying, “We will pay you later when we feel like it, and if you’re lucky, we won’t go bankrupt before then.”<\/p>

    It is a tactic often used to manage payroll flexibility. Think of it like layaway at Walmart, except the stakes are $100 million instead of $100.<\/p>

    But while Walmart wisely scrapped its layaway program, the deferred payments in MLB are not going anywhere! <\/p>

    In MLB, deferred salaries allow teams to keep their books in check in the short term while making massive free-agent signings. <\/p>

    But how much is too much?<\/p>

    Since July 2020, the Dodgers have racked up a staggering $964 million<\/a> in deferred salaries:<\/p>

    Shohei Ohtani:<\/strong> $680M out of $700M
    Mookie Betts:<\/strong> $115M out of $365M
    Blake Snell:<\/strong> $62M out of $182M
    Freddie Freeman:<\/strong> $57M out of $162M
    Will Smith: <\/strong>$50M out of $140M<\/p>

    Are the Dodgers abusing the system?<\/h2>

    Let’s get one thing straight; deferred payments are not inherently bad. Other teams use them too. However, the Dodgers have taken this strategy to cartoonish levels.<\/p>

    To put this into perspective, the deferred contracts for all other MLB teams combined total just $271.5 million<\/a>.<\/p>

    Also Read: Active MLB players’ prospects for the 500-Home Run Club<\/a><\/strong><\/p>

    Why Deferred salaries make sense (sometimes)<\/h2>

    Deferred salaries help teams manage MLB’s luxury tax rules<\/a>, spreading out the financial hit and allowing for bigger signings. For players, it’s a sweet deal: who wouldn’t want guaranteed millions when you are retired?<\/p>

    However, when the Dodgers keep deferring contracts to sign every star player, it skews the competitive balance.<\/p>

    \"\"<\/figure>

    Should MLB step in?<\/h2>

    Here’s the million-dollar (or, in the Dodgers’ case, billion-dollar) question: Should MLB intervene? A salary cap feels unlikely, but maybe a “deferred money limit” could level the playing field. <\/p>

    Alternatively, other teams could start playing the Dodgers’ game; after all, it’s not like they are paying players with Amazon gift cards!<\/p>

    Whether MLB will intervene remains a question for the future. Until then, good luck to whoever is stuck holding the bag in 2040.<\/p>

    Image Credit: Brad Penner-Imagn Images<\/em><\/p>\n

    \n<\/div>","protected":false},"excerpt":{"rendered":"

    Since July 2020, the Dodgers have racked up close to $1 billion in deferred salaries.<\/p>\n","protected":false},"author":8,"featured_media":6069,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mux_skip_reasons":[],"footnotes":""},"categories":[6],"tags":[1025,117],"class_list":["post-6005","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mlb","tag-blake-snell","tag-los-angeles-dodgers"],"acf":[],"yoast_head":"\nDodgers making deferred payments - A strategic masterclass or a blatant abuse?<\/title>\n<meta name=\"description\" content=\"Is Los Angeles Dodgers' overuse of deferred payments a genius strategy or it is just over exploitation of MLB loophole?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/theplayoffs.news\/en\/dodgers-making-deferred-payments-a-strategic-masterclass-or-a-blatant-abuse\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dodgers making deferred payments - 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