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Dodgers: Payroll Facts, Concerns, & Outlook Heading Into The Offseason



The Dodgers approach the offseason with a goal of defending their 2020 World Series Championship. Unlike the previous seasons that have ended in disappointment, the Dodgers found the right mix when they went beyond the luxury tax penalties and traded for Mookie Betts. The Dodgers were anywhere from $15-$19M over the lower luxury tax penalties (we discuss those penalties soon) but the price sure seemed worth it.

The Luxury Tax

This summary is extracted from our Payroll Page:

  • The thresholds for being taxed for the duration of the CBA are:
    • 2020: $208 million (which they exceeded)
    • 2021: $210 million
  • There are various penalties for exceeding the CBT that begin at 20%. The number changes based on the number of consecutive years the threshold is exceeded.
  • The penalties reset when a team stays under the threshold.
  • A team that exceeds the threshold by $40 million or more are penalized in the draft. A team not in the top 6 of the draft will have their first pick moved back 10 spots.
  • Penalties are calculated based on the Average Annual Value (AAV) of a multi-year contract.

The penalties for the Dodgers in 2020 have not been determined but it is their first time back over which keeps the penalties small. If they exceed the lower threshold of $210M in 2021 then the penalties get a bit worse financially. If they go over $250M then they will get penalized in the draft also.

Guaranteed 2021 Salaries

The players below have signed multi-year contracts and are guaranteed certain amounts of money. What we are doing in this article is using the average of their contract over the years. Some contracts pay more money in different years.

Player 2021
Betts, Mookie $25,600,000
Jansen, Kenley $16,000,000
Kelly, Joe $8,333,333
Kershaw, Clayton $31,000,000
Muncy, Max $8,666,667
Pollock, AJ $12,000,000
Price, David $31,000,000
Taylor, Chris $6,700,000
Total $139,300,000

NOTE: The Red Sox are paying $16M per year for Price's contract. We take that into account in our final totals in a later section.

Not included are any of the Dodgers free agents. The free agents are Justin Turner, Blake Treinen, Joc Pederson, Kiké Hernandez, Pedro Baez, Alex Wood, Jake McGee, and Jimmy Nelson. If the Dodgers bring back any of these players then their salary would be added to the $139.3M.

Arbitration Eligibles

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Player 2021
Alexander, Scott $1,000,000
Barnes, Austin $2,500,000
Bellinger, Cody $13,000,000
Buehler, Walker $5,000,000
Floro, Dylan $1,000,000
Seager, Corey $16,000,000
Urías, Julio $4,000,000
Total $42,500,000

The above values are just my estimates. Usually MLB Trade Rumors would have their estimates at this time but with all the unknowns going into the offseason they do not have them. It is possible that the Dodgers will not offer a contract to some of these players but we know the Dodgers are keeping most of them, especially the expensive ones.

Pre-Arbitration Salaries and Other Luxury Tax Factors

The rest of the players are at the mercy of the Dodgers for their salary. Those players will make between $550K and $610K. For that group, we’ll use a total of $5.76M. Then there are players on the 40 man roster that will be in the minors. For that group, we’ll factor in a total of $2.25M. Player benefits are also part of the luxury tax calculation and we’ll use $16M. With the trades involving David Price and Kenta Maeda, the Dodgers will net $15,436,500.

The Totals

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Guaranteed $139,300,00
Arbitration $42,500,000
Club Control $5,760,000
40 Man Minors $2,250,000
Player Benefits $16,000,000
Trade $ -$15,436,500
   
Total $190,373,500
CBA Tax Threshold $210,000,000
Amount Under Threshold $19,626,500
Draft Pick Penalty $250,000,000
Amount Under Pick Penalty $59,626,599

With all the money that is almost guaranteed to be allocated the Dodgers have around $19M before the smaller luxury tax penalties and around $56.6M before the drastic penalties.

There are some other factors that could raise or lower those amounts. Clayton Kershaw has some contract incentives that could add a few million dollars to their payroll. However, we want Kershaw to hit those incentives.

For the sake of argument and taking into account Kershaw incentives let’s put the final total at being $13M under the beginning of the luxury tax and $53M under the harshest penalties.

Possible Impacts To The 2021 Season

With the Dodgers winning the World Series in 2020 and also going into the luxury tax I could see them wanting to reset. That would mean not spending any more than $13M on their own free agents or any others. That is not much and the team would still have some holes. One scenario could be that David Price continues to sit out in 2021 due to COVID-19 concerns. That could free up either $15M or $31M.

If the Dodgers are going to retain a free agent like Justin Turner yet want stay out of the luxury tax then they could get creative like a multi-year contract spread over 2-3 years -- similar to the Chase Utley deal a few seasons back. In reality, they will need to use the extra $40M before the harsh luxury tax and penalties to fill the roster with more than just rookies and some bargain-basement shopping. I do not see them going after someone as expensive as Trevor Bauer.

The other impending issues are that players like Corey Seager, Walker Buehler, and Cody Bellinger need to get paid. However, Clayton Kershaw's $31M and Kenley Jansen's $16M come off the payroll after 2021. I'm sure that they will retain Kershaw but it should be at a lower rate. David Price and his $31M salary come off after 2022.

Final Thoughts

It's tough to say what the Dodgers might do this offseason. It would not surprise me if they try and stay under the penalty. They have a lot of goodwill to spend after finally winning the World Series. Personally, I hope the Dodgers will retain as many of the key free agents as possible. I do think there are some worth keeping and I'd also like to see those guys get to take a victory lap.

Last offseason the Dodgers made some big plays for some high salaried players but failed initially. Then they got the biggest prize in Mookie Betts and went into the salary tax as they also took on some of David Price's contract. It absolutely paid off on the field. However, the unknowns of the 2021 season due to COVID-19 could cause the Dodgers to stay conservative. California will be one of the last states to allow fans in the stands.

The Dodgers have some big decisions to make as they move into 2021. Once we get through December I believe we'll have a decent idea of their plans. If they let all their free agents go and non-tender some arbitration eligible players then we know they will keep spending low. I sure hope that is not the case.

NEXT: Stan Kasten is Just Happy to Be Able to Stop Talking About 1988

Written by Tim Rogers

A fan of the Dodgers since 1973 since I got my first baseball cards while living in Long Beach. I came to San Diego for college and never left nor did I ever switch my Dodgers' allegiance. Some know me as the "sweater guy". #ProspectHugger

Comments

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  1. Tim thank you for your insight into the business side of baseball and it Is a business. I appreciate your information on the website Dodgers 2080 also it keeps me informed about the Minor Leagues which with the Dodgers is a key component of their success and their future.
    In a year baseball teams lost money and with the Pandemic becoming a fixture and lots of guesses on a vaccine etc how do the Teams project revenue and what do they decide to commit to spending? Especially as CA will be one of the last places to allow fans?
    Do the Dodgers go all in an attempt to extend Seager, Bellinger, etc?
    I think this year the Dodgers will be cautious. They got the WS Monkey off their backs and have an amazing Farm Team. I doubt they sign, Pederson, Hernandez, Baez, etc. I hope they sign Treinen but they have some young arms they can groom during the regular season. As they have a surplus of Rotation Starters May or Gonsolin will be in the pen along with Graterol, Gonzalez, White, and others. The Dodger 2080 website has followed some interesting young players like Devin Mann and pitchers like Knack, Carrillo, Gray, and others which ones make the roster next year?

  2. What? Are you frickin kidding me? 16million for Jensen? Looks like the dodgers will be eating that

  3. Price, Jansen, and Kelley are all expendable. Price contributed nothing last year, and will only get in the way of the young guns. Kelley has been dissapointing for his entire tenure with the Dodgers. When Treinen, Graterol, and others were aquired and proved themselves, the bullpen went from weak to strong. Kelley costs way too much for a guy who rarely finds home plate consistently and creates almost as much adventure as Jansen out of the bullpen. I would trade him for prospects. Jansen is real expensive and can no longer close games with any consistency. The Dodgers should renegotiate his contract or trade him for lower salary player/s or prospects. While he is with the team Roberts will always be tempted to put him in high leverage games the Dodgers can’t afford to lose. Graterol needs to be groomed into at least a part time closer by the 2021 postseason. Treinen could share the closer role.

  4. I disagree that K.Jansen is no longer valuable. At his age and with all the wear and tear on his arm, everything depends on how Roberts handles him going forward.

    I think the postseason showed that when rested, no back-to-back games and ONLY 1 inning per appearance, Kenley can still be a closer that has real effectiveness. Is he absolute nails? No, not as much as years past. Can he still be a, for instance, a top-10 stopped? I think so – again, if used properly. With all the young arms around him now, Kenley does NOT need to be “the Man” anymore. Simply being”one of the guys” now is good enough.

    I am definitely looking forward to seeing B.Graterol eventually taking over the stopped role, who knows if there might be even another arm (D.May?) that should be our closer in the future. The point being that there is lots of depth in the bullpen as it currently is constructed. I totally agree that re-signing Treinen should be a priority too.

    I am, however, being very strict with the starting rotation: Buelher, Kershaw, May, Urias Gonsolin. And FFS, let these guys pitch like true starters. There’s nothing more demoralizing for any starter than getting pulled after throwing only 75 pitches in 4 2/3 innings. Stop it Dave.

  5. It will be hard to unload Price and Jansen. for pitching we should go out and sign Bauer. Not knowing if Price will opt out and Kershaw staying healthy for the whole season. Also Bauer wants one year contract and his a high preference to play for the Dodgers. Only free agent to bring back are Turner and Treinen. Now for free agents or trades Dodgers should go after W.Merrifield who came play outfield and 2b and has a decent salary for next 2 years. Next would be to trade for J.Ramirez who can also play 2nd or 3rd base when Turner needs a couple of days off. Remember Turner also his injury issues last 2 seasons. We have plenty of prospects to give up and Im not sold on Lux. Has not impress at the plate or field. Sure Dodgers will pay big for Bauer but can you imagine him pitching for us, Both Merrifield and Ramirez are better hitters

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