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Dodgers: Trevor Bauer’s Impact On LA’s Payroll 2021 and Beyond

They’ve very much blown past the luxury tax limits.



If you haven’t heard, Trevor Bauer has signed a three-year contract with the Dodgers for $102M. The contract calls for him to earn $40M in 2021, $45M in 2022, and $17M in 2023. There are opt-outs after each of the first two years. For luxury tax purposes, the contract average over the three years is used which comes out to a $34M AAV Annual Average Value (AAV). This article is a follow up to a post I did in November regarding the payroll as we see how Bauer impacts the payroll along with any other transaction between November and now.

The Luxury Tax In A Minute

This summary is extracted from our Payroll Page:

  • The thresholds for being taxed for the duration of the Collective Bargaining Agreement (CBA):
    • 2020: $208 million (which they did not exceed)
    • 2021: $210 million
  • There are various penalties for exceeding the Competitive Balance Tax (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 for one season.
  • 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 AAV of a multi-year contract.

Since the Dodgers did not exceed the lower tax maximum, they would count as first-time violators if they exceed it in 2021.

Bauer’s Impact To The Payroll

As of now, the Dodgers sit at a little over $239M for 2021. That puts them well into the luxury tax AND they still have not signed Justin Turner who made $16M in 2020 (prorated due to 60 game season). At $239M, that leaves the Dodgers a little under $11M before the harsher penalties like losing 10 spots in the draft and losing money to spend on international players. Let’s not forget there are other “real inside baseball economic stuff” reasons. Even with the number a little less than $11M away, there are also incentives with Clayton Kershaw’s contract to consider.

  • $1M for games started at 24, 26, 28, and 30 marks
  • $1.5M for Cy Young with $500K for 2nd or 3rd place finish

I really doubt the Dodgers want to go over $250M but I still think they want to sign Justin Turner (editorial note: I want him back). The issue clearly becomes how they can keep JT and stay under the $250M target.

Related: Dodgers Analyst Predicts Justin Turner on Opening Day Roster

Salaries To Move

The Dodgers have plenty of high-salaried players. However, they are not trading Cody Bellinger, Mookie Betts, Walker Buehler, Clayton Kershaw, Max Muncy, Corey Seager, Chris Taylor, or Julio Urias. Still, there are some possibilities to consider.

  • Scott Alexander – $1M
  • Kenley Jansen – $16M
  • Joe Kelly – $8.333M
  • Corey Knebel – $5.25M
  • AJ Pollock – $12M
  • David Price – $31M
  • Blake Treinen – $8.75M

Scott Alexander

The Dodgers are a little short in the bullpen with left-handers and Alexander has had some good moments. His salary is fully guaranteed for 2020 so for any of it to be off-set they’d have to trade him for someone that would not be on the 40-man roster. It seems a trade for a low-level minor-league wild-card to a team that lacks bullpen depth might be a possibility.

Kenley Jansen

This is obviously a bit controversial but adding Kenley to this list seems like the right thing to do. First off, Kenley has full no-trade rights as a player with 10 years in the league and his last 5 years with the same team. Clearly, this makes a trade difficult. However, if the Dodgers were to let him know he is no longer the closer he might be open to a trade. Now, what team would want Kenley for his $16M contract in 2021? Here are some ideas:

  1. Trade some good prospects, along with Kenley and his full contract for a bucket of baseballs.
  2. Trade Kenley and his full contract to a team with someone making about half of Kenley’s contract to satisfy a bullpen need. This would be similar to the Homer Bailey inclusion in the Josiah Gray trade.
  3. Trade Kenley, some lesser prospects, and half of his contract for some prospect wild cards.

Joe Kelly

The hero of the first part of the 2020 season for the Dodgers is owed $8.333M in 2021. The Dodgers do have an abundance of right-handed relievers so he could be made available.

Corey Knebel

The Dodgers just traded for him and he will make $5.25M in 2021. I had to include him if they need to trade him to make room for JT. However, Knebel looked great in September and I think he will be a bargain.

AJ Pollock

Trading Pollock to clear space for JT seems like robbing Peter to pay Paul. The Dodgers need right-handed bats so I don’t see this happening.

David Price

From a money perspective, Price is the most obvious guy to trade. The Dodgers are only responsible for $15M of his contract so that makes him much more tradeable. With 2020 being a short season and many of the Dodgers not having many full seasons under their belt, I think the Dodgers should keep all seven of their major league starters. I’m working on another article about how the rotation might look like in 2021.

Blake Treinen

I would be shocked if the Dodgers traded him but I also do not put anything out of Andrew Friedman’s range. If they see a trade that improves the team they would even trade Treinen. I see him as a big part of the bullpen’s success in 2021.

Another Solution

We heard that Justin Turner was interested in a four-year deal from teams other than the Dodgers. Well, one way to get around the upper luxury tax thresholds would be to offer a longer contact with a lower AAV. How about something like five years at $45M? $14M for the first three years, then the rest of the $3M over the last two seasons. That makes the AAV only $8M per season. Or, just make those player options after the three years are up? There are many ways Andrew Friedman can make this work and I can guarantee you he has been thinking through many different scenarios.

Final Thoughts

I am still in shock that the Dodgers went out and paid so much for Trevor Bauer or most any other player. This does elevate the starting rotation from very good to insanely good. Now they need to find a way to get Justin Turner while staying under the $250M amount. Or, they could just blow off that number in 2021 and find a way to reset it in 2022. Many of us are happy to see the Dodgers making big moves like with Mookie Betts and Trevor Bauer. They are careful on who they spend big money and prospects on but I hope that also includes Justin Turner.

NEXT: Trevor Bauer Turned Down More Money Offered by the Mets

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

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  1. I have not been in favor of more than three years for Turner, but I like the idea of a longer contract with a much lower AAV. The DH should come into play, but even if it doesn’t the lower salary won’t hamstring the team. Even with the big money for Bauer you are only looking at two years (he will definitely opt out of the $17M). Jansen and Kelly will be gone by then. Of course, Kershaw and Seager will be on for relatively big numbers by then (one hopes). But this ain’t like 2015 where they were pushing $300M.

  2. This signing is so risky in so many ways. Fingers crossed now. We can only hope for the best. I think the Dodgers need to go all in at this point, keep the entire rotation intact and bolster the bullpen with the young surplus. Trading “the most obvious guy to trade,” David Price, is likewise a high risk. Price (actually half-Price, since Boston is paying 1/2) could produce a stronger season that Bauer. How would that look if Price were traded in order to shed some dollars, has a solid season for someone else and Bauer reverts to 2019 for the Dodgers?

  3. Dodgers have transformed themselves from clear favorites to prohibitive favorites. Anything less than another World Series would be perceived as a failure. Now I sort of feel Dodger fans in the position of rooting for Goliath.
    All considered, I’d have preferred that the Mets or (better yet) the Angels get Bauer to make the competition more interesting.
    Hard to see how Bauer’s arrival won’t stunt the development of May and Gonsolin. It’s exciting watching the young, homegrown players develop, as opposed to the hired gun. I also find it easier to root for Price than Bauer; we gave up the homegrown talent to get him and Betts.
    And doesn’t blowing past the salary tax further complicate the hopes for extensions of Seager, Buhler, Belli?
    The Dodgers’ formula for success has not relied on overpriced free agents. In addition to the draft picks and international signees, they’ve picked up diamonds-in-rough like Turner, Muncy and Taylor.
    Signing Bauer just feels wrong.

  4. The longer this goes on, the more faith I have in Friedman getting a deal done for JT. What I am very concerned about is trying to re-sign Corey Seager following the 2021 season.

  5. I think they sign Turner for multiple years at the lower AAV as you suggested. They could – assuming he agrees – extend Kershaw at a lower AAV as well and make him a Dodger for life.
    The Bauer signing could very well be a one year thing. The CBA expires after this season and we all know the new one will look very different after long and arduous negotiations. There’s a real risk of strike because the MLBPA and owners can’t agree on anything and are willing to bitterly delay everything.
    This looks like another shrewd move by Friedman knowing there’s little danger of penalties in ’22 – if there is a ’22 season – because the framework will be completely different. It’s not a coincidence that Bauer’s largest compensation year is ’22.

  6. The dodgers have signed some good players, but have not gotten the main one is Justin Turner. They have a good pitching staff and good members but who is the go to person in the Club house. There are 5 good starting pitchers but what about the 3rd baseman. Joc is gone and still they have a good outfield. Get rid of some one that is not performing and sign JT. I believe by all the writings and what the sports writer for the Dodgers that JT wants to stay.

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