Will the Dodgers really follow through on plans to stay under the luxury tax through 2022?
Since their new ownership group took over in 2012, the Los Angeles Dodgers have been the class of Major League Baseball when it comes to dropping a fortune on player payroll. According to one report, that is very much not to be the team’s plan going forward.
In a document prepared for potential investors before the 2017 season, the Dodgers laid out plans to keep their payroll under MLB’s luxury tax threshold through at least the 2022 season, according to the Los Angeles Times. The report says the projections are not binding and are more of a forecast, but that still represents a notable change for the team.
The Dodgers failed to top MLB in payroll last season for the first time since that 2012 season when the Guggenheim ownership group took over. However, it was widely believed that the payroll drop was a successful attempt to get the team under the luxury cap and reset its tax rate, which would save the team a fortune if it went above the tax in future years.
Now, even with that path cleared, it appears the team might want to make a significant change in its operations.
How much do the Dodgers plan to limit spending?
Per the report, the Dodgers project to spend $185 million on player salaries in 2019 and 2020, $191 million in 2021 and $196 million in 2022.
The luxury tax threshold for those years is scheduled to be $206 million in 2019, $208 million in 2020 and $210 million in 2021. The 2022 threshold has not been determined.
Why there’s reason to be skeptical of the Dodgers’ plan
It is worth noting, again, that these figures are projections, not concrete plans. Per the Times report, one team official said he would be “shocked” if the team didn’t clear $200 million next season.
The Dodgers brought in more than half a billion dollars in revenue last year, according to Forbes’ MLB valuations. The idea that the second-most valuable team in baseball, a team that is still making hundreds of millions of dollars on its TV deal alone, is going to continuously limit its payroll while still trying to compete and stay relevant in the Los Angeles sports scene is ridiculous.
Even looking at the Dodgers’ payroll for next season, it’s hard to see them hitting that $185 million salary number. Right now, the team is already projected to hit $182 million in salary, according to Cot’s Baseball Contracts. It is very unlikely the team spends only $3 million in free agency this offseason, and arguably even more unlikely that a team with clear World Series aspirations trades a quality player merely to cut costs.
These figures were likely created because the Dodgers ownership group reportedly wants to sell a minority stake in the team, and one of the best ways to sell a business is lay out a framework on how you plan to eliminate costs. This could all very well be a sales pitch for reluctant investors, and nothing more.
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