LA Dodgers: MLB Says It’s Time for You to Pay the Piper
For the Los Angeles Dodgers, it must be like the weight of receiving that first letter from the bank saying that they’re ready to take the house away. They’re kidding, right? It must be a mistake. No, it’s not a mistake and MLB is serious about their order to the Dodgers to pay down their considerable debt – or else! Or else what? What are the ramifications of the situation the Dodgers put themselves in?
On the surface, the ramifications are simple. They can’t be the “Dodgers” for a while. Meaning they can’t add another billion dollars in free agent contracts like they’ve done in the past few years. Meaning that (and here’s the real kicker), Giants fans, rejoice! Santa has come early for you this year. Because re-signing Kenley Jansen and Justin Turner might suddenly be off the table, unless the Dodgers can employ some kind of voodoo economics. Meaning that the Giants can now swoop in to snare the one thing they lacked last season in Jansen. And that could just be for openers.
The Dodgers Say They Have a Plan
Specifically, the franchise needs to trim its payroll to around $200 million by 2018, down from the high that it reached of $300 million in 2015. Meanwhile, the LA Times reports what the Dodgers seem to be saying in response:
"“The team says the reductions are unrelated to baseball’s rules about debt, which demand clubs be in compliance within five years of an ownership change. Rather, the Dodgers say they spent heavily in the early days of Guggenheim ownership in order to be competitive as they rebuilt the organization’s player development program and infrastructure.”"
Which is sort of like telling the bank when they come calling, “Look, it’s not what you think. We’ve had a lot of medical bills with Uncle Charlie and Aunt Ethel both getting seriously ill and they both will die if we don’t help them.”
The LA Times story describes the origins of the problem stemming from “the rule, (that’s) designed to ensure teams have the resources to meet their financial obligations, generally limits debt to no more than 12 times annual revenue, minus expenses. The Dodgers were not profitable in any of the first three full seasons under new ownership, co-owner Todd Boehly said last year. Their debt is believed to be in the hundreds of millions.” Matters haven’t been helped by the team having to pay players $100 million even though they are no longer with the organization.
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Most in the industry believe that the Dodgers can overcome this setback by drawing from the wealth of talent they have in their minor league system, which is still one of the best in baseball. But that will mean they have to produce a Corey Seager every year in order to remain competitive. Not surprisingly, the Times quotes Commissioner Rob Manfred as saying, “I think the Dodgers will be in a position that they can comply with our expectations in terms of the debt service rule, without any dramatic alteration in the kind of product they have been putting on the field.”
Of course, what else would he say? “Dodgers fans, stay home ’cause you’re gonna be watching a Triple-A team for the next few years”? It could easily end up being close to that, though. Major league talent like a Corey Seager doesn’t come along every day, even if you are the Dodgers.
The Dodgers Owners Are Neutered – Good for Baseball!
The man with the weight on his shoulders in the immediate future is Andrew Friedman, president of the Dodgers. He was recruited from the Tampa Bay Rays specifically for the purpose of bringing the Dodgers into compliance with MLB rules. The good news is that the they have a record $8.35-billion, 25-year television contract for SportsNet LA, and they have sold the most tickets of any major league team in each of the last four seasons. But none of that is money in their pockets right now.
In the end, and like most families who find themselves in a position like the Dodgers, it could be the best things that ever happened to them. Neutering the “Guggenheim Dodgers” not only is necessary, but it’s good for baseball. And anything good for baseball is good for all of us.
Next: Not-So-Curious Case of Justin Turner
Footnote: For those who may be wondering how the Yankees got away with their free spending over the years, the rule is only applied when there is a change in ownership.