If there’s any threat to the Dodgers’ ability to contend in 2017, it’s the size of their payroll. Bill Shaikin of the Los Angeles Times reports that the team spent approximately $1.181 billion in four years and needs to reduce their debt if they plan to comply with league rules. Shaikin adds that the debt is currently estimated to be in the “hundreds of millions.”
On average, the Dodgers have dumped an annual $295 million into player payroll dating back through 2013, when Guggenheim Baseball Management assumed control of the club. The expenditures were assumed to be a necessary part of the team’s efforts to stay competitive while remodeling their player development program. It’s this mentality that gives Dodgers’ ownership some comfort heading into the 2017 season. Via Shaikin:
So while the Dodgers would have to pay big in order to keep established stars such as third baseman Justin Turner and closer Kenley Jansen from signing elsewhere as free agents, the club says it otherwise is able to operate more efficiently because it has a minor league system that is churning out the young, relatively inexpensive talent necessary to sustain a perennial contender.
Retaining Turner and Jansen won’t come cheap, as the two figure to be in the top tier of free agents this offseason.
MLB debt service rules stipulate that a team cannot exceed “12 times annual revenue, minus expenses,” and all teams under new ownership must adhere to the guidelines within a five-year period. Any organization found in violation of the debt service rule can be subject to one of 16 disciplinary options, the most extreme requiring a suspension of ownership and management.
No details on how the Dodgers will reduce their mountain of debt have been released, but neither club ownership nor MLB commissioner Rob Manfred appears overly concerned about the team’s ability to compete for another NL West title while cutting their expenses.
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,” Manfred said.