The Dodgers Are Going To Force the MLB Into Changes

Friday, September.21/2012

When Magic Johnson and his ownership group spent 2 Billion Dollars on acquiring the Franchise, that should have been a red-flag that they were going to outspend every club when it came to payroll. Get ready for it baseball world!

Chuck Booth (Lead Baseball Writer):

Baseball is about to receive a serious wake-up call from the Dodgers.  Perhaps the Yankees would have already done what the Magic Johnson ownership team is planning, had “The Boss” had full faculties and the team had not cashed in on the 2009 World Series.  With no salary cap and a soft luxury tax on the heavy spenders, the MLB is really setting themselves up for a disaster when a team finally pulls the trigger on obliterating the payroll system.  The Dodgers new ownership has spent 2 Billion on the California Franchise.  They are in perfect position with Billions in revenue about to be promised for the TV rights of their franchise.  So do you really think they are done spending on the team?  I would be surprised if the Dodgers payroll isn’t in the $230-$250 Million Dollar Range for 2013.

I wrote an article about this very topic right after the trade that brought over the Boston Red Sox big 3 salaried players.  You can check out that blog here.  As it stands right now, the 2013 Payroll projects to be in the 200-210 Million Dollar Range already.  You add the constant health doubts now plaguing Clayton Kershaw, plus a need for some more starting pitching and you could be sure these guys will make a play for a couple of starting pitchers.  Zack Greinke has to be on the club’s radar.  While Greinke might not be the top of the pitchers ‘Mount Rushmore’, he is really close to it.  He may get a 5-6 YR contract worth 90-105 Million Dollars.  He has pitched really well for the Los Angeles Angels, so clearly he likes the city.

Again, I bring up, who is going to stop the Dodgers from steam-rolling the rest of the National League? If they yield a Payroll of 250 Million Dollars a year for the next decade, who is going to compete with that?  Sure you can say some of the clubs like:  Tampa Bay, San Francisco, Oakland, St. Louis, Minnesota and Texas have competed with the higher payroll clubs by being great organizations.  I would come back with this.  The Dodgers are going to blow anything out of the water even to what  the Yankees ever spent.  How exactly is Colorado, Arizona and San Diego going to compete with this club when they have about one-third of their payroll?  Sure the Giants could spend about half of the Dodgers salary-but what if it is all for not in leaving the Giants on the outside looking in!  The Dodgers have an ALL-Star Outfield and a solid infield.  Their young pitchers have improved.   The management will go out shopping for whatever they need with no recourse for how much it will cost them.

The Yankees have 27 World Series Titles and 13 Losses in the Fall Classic since 1921. That is 40 Appearances in 91 years. They have had the highest payroll team in MLB for the Majority of that span. As of 2013, they will not be able to claim that stake anymore-with the Dodgers looking to spend 20-30 % More than the Bronx Bombers.

If the Dodgers peel of a few World Series in a row, the whole landscape of baseball will change.  Don’t think that Magic Johnson will be crying poor either with his ownership group.  If this team is a perennial playoff contender, they will sell over 4 Million Tickets for their games and amass Millions of Dollars for lengthy playoff runs.  The TV Ratings will be enormous and they will be a powerhouse at the Merchandise Window.  The Value of the Franchise will continue to escalate if they start putting up great seasons with championship rings.  They will be the National League villains.  Everyone will want to see them lose-just like the rest of baseball seethed in rage when the Yankees outspent everyone en route to  6 World Series Appearances and 4 Titles in 7 years from 1996-2003. 

Major League Baseball will have no one to blame but themselves.  If I was in Magic shoes I would spend like crazy too.  What is the deterrent?  Based on next year, the Luxury Tax threshold will be 178 Million.  For a first time offender, the penalty is 22.5% of ever dollar spent past $178,000,000.  So if the Dodgers cake their team salary up to 250 Million Dollars, it is only 16.2 Million.   Magic probably has that in his couch cushions at his lofty California Estate.  The 2nd Year (in 2014), the threshold goes up to a 189 Million Dollar- and a 2nd time offender is a 30% penalty-or 18.3 Million.  The Maximum penalty for disobeying the Luxury Tax Threshold appears in year 3 and remains 40 % in subsequent years after.  Even at 40%, that is only 25 Million Dollars a year paid out for Luxury Tax for the team.

What are the rest of the teams and Major League Baseball going to do when the Dodgers are spending 250 Million Dollars a Year? A new CBA in 2017 will probably see revisions made to the Luxury Tax and maybe even division re-alignment to have more competitive balance.  Perhaps MLB will be the last of the 4 Major Sports to adopt a Salary Cap?

Besides, who has the wherewithal in the National League to even approach the ‘ballpark’ of what the Dodgers can spend?  Philadelphia could probably spend up to 150-160 Million and should be competitive for the next few years.  However, this is where it ends.  San Francisco and St. Louis could spend about 125 Million, yet even that is really pushing the clubs right to their limit.  All of the other teams will be uncomfortable in going much higher than 100 Million Dollars.  The time to close this genie bottle was in the last CBA negotiations.  It is funny, I always thought the Yankees would have the highest payroll in the MLB.  Now they are talking about slashing payroll enough to get under the Luxury Tax Threshold. 

This brings me to my final point.  I wrote an article about 4 months ago that suggested that Baseball should consider a Payroll/Geographical Division Re-Alignment based on teams proximity to another and payroll likeness.  That article can be viewed here.  In bullet style here, this is like Premier Soccer in the UK.  They should lump all of the high payroll/high revenue generating teams in the same divisions.  The American League would be better served to host a lot of these clubs as they have an extra positional payroll slot for their DH.  This is how the divisions would look like:

AL EAST         AL CENTRAL        AL WEST             NL EAST      NL  CENTRAL            NL WEST

   NYY                     CHC                    SEA                  TOR                    PIT                          ARI

   BOS                     CWS                     SF                     TB                     CLE                         OAK

   PHI                       MIL                     LAA                 MIA                    CIN                          COL

   DET                      HOU                    LAD                 WSH                   MIN                         SD

  NYM                     TEX                      STL                  BAL                    ATL                         KC

So the best thing that non-Dodgers fans can hope for-is that the team makes the playoffs and makes a deep run for the organization to feel like it is not far away from a championship.  If not, look out world, the Dodgers are about to blow the roof off of Salaries and only the strongest franchises will have a chance to compete!

The Dodgers have not won or appeared in the World Series since 1988. With the spending the ownership will do in the next decade, I would be surprised if the team doesn’t rake in a multiple championships and many World Series Appearances in that time frame.

 *** The views and opinions expressed in this report are those of the author and do not necessarily reflect the views of mlbreports.com ***

 ***Thank you to our Lead Baseball Writer- Chuck Booth for preparing today’s feature on MLB reports.  To learn more about “The Fastest 30 Ballgames” and Chuck Booth, you can follow Chuck on Twitter (@ChuckBooth3024) and you can also follow Chuck’s website for his Guinness Book of World Record Bid to see all 30 MLB Park in 23 days click here  or on the 30 MLB Parks in 23 days GWR tracker at the Reports click here. To Purchase or read about “The Fastest 30 Ballgames Book, ” please click here ***

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About chuckbooth3023

I played competitive baseball until 18 years old and had offers to play NCAA Division 1 University Baseball at Liberty University. Post-concussion symptoms from previous football and baseball head injuries forced me to retire by age 19. After two nearly made World Record Attempts in 2008, I set a New World Record by visiting all 30 MLB Parks (from 1st to last pitch) in only 24 Calendar Days in the summer 0f 2009. In April of 2012, I established yet another new GWR by visiting all 30 Parks in only 23 Calendar Days! You can see the full schedule at the page of the www.mlbreports.com/gwr-tracker

Posted on September 21, 2012, in The Rest: Everything Baseball and tagged , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 10 Comments.

  1. Great article! Stuff that has scared me for a long time!

  2. Great article! Huge payrolls like the Dodgers have always scared me for the sake of our pastime. If you buy a team for $2 billion, spending $250 million a season is very, very much a possibility…it shows a lot of commitment by ownership. There will likely be changes like you mentioned at this point. Other teams refusing to trade with the Dodgers will only do so much (people still traded with the Yankees for salary relief). Free Agency won’t even be a contest (the MLBPA will love the Dodgers for driving up salaries and will create resistance). Although every superstar can’t play for the Dodgers, and when another superstar free agent expects to get salaries that were inflated by the Dodgers spending, other teams won’t be able to afford it. There needs to be more luxury tax…

  3. Yep, my point exactly-Like Dollar for Dollar!

    • I agree 100% with what you said…I had the amazing honor of meeting George Steinbrenner towards the end of his life (I am not a Yankees fan, but he is a baseball icon without any doubt). Had he been more with it, as you mentioned, he likely would have beaten the new Dodgers ownership to the punch.

      I think a dollar/dollar approach might be fair. A $100 million contract is really $200 million. It’s going to receive a LOT of resistance from the MLBPA. Should have been done a LONG time ago in my view.

  4. Can we send A-Rod to the Dodgers – NOW PLEASE

    • ya-they dont have a gajillionaire 3rd baseman yet-good call!

    • Good point! I could see them relieving the Yankees of that salary (what a strange concept!) if they can’t sign Youkilis or David Wright…might as well have a 9 figure third baseman! They’ll sell enough “Rodriguez” jersey’s in Los Angeles to make up for the salary and A-Rod can live out his dream of being a movie star instead of a ballplayer!

  5. Huge Dodger fan here. This new ownership group is really ready to win. I am thrilled for the future even though I am now a hypocrite because I loathe the Yankees and what they have done to baseball. Oh well… the haves and the have nots. By the way, Magic is absolutely not the big spender, that honor goes to Mark Walter. Magic ‘only’ owns about 3.4%. And A-Rod. Baseball Gods forbid.

  1. Pingback: Links for MLB Reports Articles | The Fastest Thirty Ballgames

  2. Pingback: MLB’s 2013 State Of The Union – Payroll Matters Part 2: Just Because Some Low Payroll Teams Have Bucked The Trend – It Doesn’t Mean It Will Continue | MLB reports

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