Baseball is rapidly careening down a track that could lead to a very dark place.
On Sunday, the Los Angeles Dodgers continued their lavish spending by signing closer Tanner Scott to a four-year, $72 million deal. That move came days after 23-year-old Japanese pitcher Roki Sasaki chose to join the Dodgers, which came a few months after the world champions added two-time Cy Young Award winner Blake Snell on a five-year, $182 million contract. That followed a 2023 offseason during which L.A. spent roughly $1.2 billion on contracts. Which came after ... you get the idea.
Let me first say the Dodgers are not the problem. The system is. Baseball is facing a jarring division between the haves and have-nots, and there is no sign of it slowing down. The gap between big-market teams and those in medium and small markets is only growing.
Any way you slice it, that is terrible for the game.
The Dodgers have used the financial might of their market to dwarf the competition. In the last 12 months, the franchise has added four nine-figure contracts. Shohei Ohtani, Yoshinobu Yamamoto, Tyler Glasnow and Snell will combine to make more than $1.3 billion over the course of their contracts, and they all play the same position. Add those deals to the nine-figure agreements signed by Mookie Betts, Freddie Freeman and Will Smith, and you've got seven players being paid a combined $2 billion.
Perhaps the most stunning part of L.A.’s spending spree has been the incredible amount of deferred money involved. The team currently has about $1 billion in deferrals still on the books. A common refrain to counter outrage at the concentration of players the Dodgers have hoarded is that any owner and franchise could be doing this. That's far from reality. When the rival San Diego Padres tried to keep up with Los Angeles's spending in 2023, MLB stepped in and all but outright told them to stop.
Fans should expect owners to spend and be competitive, but they can't ask them to lose money on their teams on an annual basis. It would be bad business to not at least break even every season. The problem is, thanks solely to geography, the Dodgers and New York’s two teams have a massive built-in advantage.
Los Angeles signed a 25-year, $8.35 billion television contract in 2013. Thus, before selling a single ticket each season, the Dodgers have roughly $334 million in revenue already on the books. By comparison, the Padres were receiving roughly $60 million per year before Diamond Sports Group's implosion. That figure is now far lower. San Diego can't be expected to financially compete with the Dodgers given that disparity.
Big markets will always be a draw for top players. That can't be avoided. But the financial inequality in baseball is reaching alarming levels.
While deferred money has been used in MLB contracts for decades, no one has utilized it as the Dodgers have. According to Forbes's latest franchise valuations, the $1 billion of deferred cash on their books is worth as much as the entire Miami Marlins franchise. That's beyond absurd.
The Dodgers are set to enter the 2025 season with a luxury tax payroll of more than $375 million. That's roughly $70 million more than the Philadelphia Phillies, who come in second. The New York Yankees are the only other team slated to be over $300 million. The Dodgers’ roster features six players with a luxury tax salary of more than $27 million and 14 players making more than $11 million. No one else's salary table looks anything like that.
There are 29 MLB owners who aren't happy with what's happening in Los Angeles and you can bet they are already gearing up for a massive fight when the current collective bargaining agreement expires following the 2026 season. Baseball's owners have long wanted to implement a salary cap of some kind, and the Dodgers’ spending has given them the perfect argument to get fans on their side.
Small- and mid-market owners will want more competitiveness injected back into the game because they figure fans will tune out at the local level if their teams aren't fighting for playoff spots. That would only accelerate baseball's already declining ratings. They will almost certainly take a hard stance to rein in the massive spending at the top of the food chain. The MLB Players Association, meanwhile, will presumably never accept a hard cap. It would accordingly be shocking if there wasn't a prolonged lockout or strike after the current CBA ends.
Fans will also note that owners such as the Pittsburgh Pirates' Bob Nutting and the Oakland/Sacramento/TBD Athletics' John Fisher hurt the game even more by not spending. You'll get no argument from me on that front. Both are awful for the game.
The most common-sense solution to baseball's problems would be to implement a salary floor that would please the players union and fans, while adding incredibly harsh penalties for exceeding the luxury tax and increase those penalties for repeat offenders. The current system doesn't go far enough. If a team is a repeat offender over the highest threshold, they could pay harsh fines, stripped of their first five draft picks, have strict limits on the salaries that can be acquired in trades and/or have their international free agency budget cut from the current figure of $4.75 million to a maximum of $1 million.
Perhaps most relevant to this conversation, deferred money should be counted against the luxury tax. Shohei Ohtani will be paid $700 million for playing 10 years with the Dodgers, but because the money is deferred and $700 million will be the future value, his salary only counts as $46 million against the luxury tax payroll. It's a smart accounting trick L.A. has repeatedly used. It should be abolished. If players want to get their money later, that's great, but the total amount given should be the number that counts against the tax. Ohtani will receive $700 million for playing 10 seasons. His annual luxury tax salary should be $70 million.
On top of that, the leaguewide disparity in revenue must be addressed. In the wake of the regional sports network fiasco, pooling local television revenues—or at least a significant percentage of it—then distributing that evenly among the league's 30 teams would be the simplest solution. You can bet teams like the Dodgers, Yankees, and New York Mets would fight that hard, but such a move would give the little guys a fighting chance.
The Dodgers are an incredibly well-run franchise that has a rich history and a championship pedigree. They are not the cause of baseball's biggest problem, but a symptom of a broken system.
Major League Baseball needs to turn its attention to the wide financial gap between its teams and start figuring out solutions. If the league ignores the current predicament and doesn't begin preparing a response, things are likely to get ugly when the current CBA expires. At that point, any goodwill fans have will be completely squandered.
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This article was originally published on www.si.com as Baseball’s Top-Heavy Food Chain Is Nearing a Tipping Point.
