The Dodgers have decided to sign Blake Snell on a five-year, $182 million contract. This deal is not as simple as it seems and requires a closer look at the details to understand how the team plans to enhance their lineup this offseason.
Snell will receive a hefty signing bonus of $52 million, with an additional $13 million per year in deferrals over the next five years. Although he gets a big check upfront, this amount is spread out over his contract for bookkeeping purposes. The New York Post highlights that these deferrals mean Snell’s average annual value for tax purposes drops slightly from $36.4 million to just over $32 million.
Deferrals don’t greatly affect the competitive balance tax (CBT) since it calculates an average yearly value rather than what players earn each season. For example, Shohei Ohtani’s massive 10-year deal averages out differently due to similar financial maneuvers.
Creative Accounting
If CBT taxed teams based on full yearly contract values, Snell would be at $36.4 million annually. However, like Ohtani’s situation where his CBT figure is much lower due to deferrals, some clever accounting by the Dodgers keeps things flexible .
Fans might think it’s impressive how teams manage their finances so creatively!
Dodgers are known for spending money wisely despite being one of baseball’s wealthiest teams. According to Travis Sawchik’s “Scrooge Index,” they spend 67% of revenue on payroll compared to other teams like the Rays or Tigers who spend far less.
Future Moves
Although they have spent heavily already, there’s room left in their budget thanks to these financial strategies. Their current payroll sits around $260 million for 2025 after bonuses and deferrals are considered—leaving space for more player additions without breaking the bank.
Currently, Gavin Lux, Andy Pages, and James Outman fill spots in their lineup but rumors suggest possible reunions with Teoscar Hernández or even adding Juan Soto if terms can be agreed upon through deferred contracts again.
Roki Sasaki from NPB could also join them without demanding huge sums due to his amateur status—a potential bargain signing linked all offseason long with LA Dodgers’ interest piqued!
In conclusion: Do you think these strategic moves will help them win more games?
