They Are Playing With Monopoly Money

I know I sometimes come across as being unhappy with the results of Andrew Friedman.  Not true.  I think AF has done a fantastic job doing what he is undoubtedly tasked to do.  Put the best roster together that will be a contender every year and at a cost that will still generate a profit.  Contrary to the belief that the Dodgers have an unlimited source of funds, they too have a budget.  No billionaire became a billionaire by ignoring profits.

Just because I believe that AF is a top executive, does not mean that I sheepishly agree with all of his moves.  I question.  AF is not immune to questions.  He does not have to answer my questions, but I reserve the right to rhetorically ask them.

Yes it is great that the Dodgers have made the playoffs 11 straight years, and should continue to do so for the foreseeable future.  I have written multiple posts that IMO, AF is the best MLB exec at putting a roster together for the regular season.  The Dodgers have fallen short of the true prize in all but one shortened season.  Is it AF’s fault?  Maybe yes, maybe no.  His job is to get the players, but the players have to perform.  But why didn’t the Dodgers re-sign their NLCS/WS MVP? It gets old to continue with the line that we tried, we just came up short.  And yet they have still won 100 games for the last four consecutive full seasons.  AF had a lot to do with that.  But if he gets credit for putting that level of a team together, he should also take partial blame for not getting the right personnel for the October games.

Their playoff teams have been devoid of clutch players, including their HOF Ace, Clayton Kershaw.  Can this be fixed?  I would like their chances more if the starting rotation was elite, and if the offense would not rely so much on the three-outcome approach too many of their players deploy.  I would like it more if AF had better anticipated the games rule changes, and adapted them to the 2023 team.   They have the ability to adapt.  No team played the shift better than the Dodgers.  Figure it out.  That is AF’s job to find the players who are best equipped to play pursuant to the new rules.  Signing the pitcher with the worst record of SB against (Noah Syndergaard) in a year that the SB was going to be a weapon again, was not prescient.  Who gets the blame for that?  Did the Dodgers make any effort at all at trying to trade for Jordan Montgomery?  Did they come in 3rd or 4th again?

Regardless costs will always be a factor in roster construction.  We know many of the low revenue teams, but this year we are learning of a couple of other organizations that have been contenders, that will be paring their payroll.

A couple of recent examples of scaling back this year from contending teams.  One is in the NL West, the San Diego Padres.  The 2023 opening day payroll for the Padres was just south of $249MM, with an estimated year end payroll estimated at about $264.5.MM.

The Padres’ spending increases have outpaced their revenue increases. This has not been a secret. Team officials have been talking for more than a year — even as massive checks were still being written — about getting costs under control.

How much the team is bringing in is not a known number, though one highly placed source says the team has doubled revenue since 2018 and others around baseball marvel at the impressive gains. However, the size of the payroll is known, and it has jumped from $104 million in 2018 to the season-ending figure of around $253 million in ‘23.

The Padres currently have 12 players under contract totaling $155MM ($209MM AAV), including $12.6MM for Eric Hosmer.  That does not count six players due arbitration salaries that could be north of $50MM (including Juan Soto at $33MM).   18 players totaling $205MM. Add another $20MM for benefits, and the current payroll cost sits north of $225MM ($259MM AAV). The huge disparity between actual costs and AAV would indicate that payroll costs for players currently under contract will necessarily increase.  Machado, Tatis Jr., and Cronenworth alone have an excess AAV of more than $30MM from their 2024 payroll.  These are unfunded liabilities that play into management decisions.

Padres management is on record that they must reduce payroll.  In part because they are out of compliance with MLB regulations regarding their debt service ratio, according to multiple sources, the plan is to go into 2024 with player commitments of around $200 million.

They have lost their Ace (Snell), their closer (Hader), two other starting pitchers (Wacha and Lugo), their long man/#6 (Martinez), and multiple bench pieces.  All need to be replaced, albeit not at the same level of talent.  Will that mean that Soto gets traded before the season?

San Diego is further cash crunched due to the bankruptcy of their MLB Network provider, Diamond Sports Group.  Diamond Sports Group has relinquished their rights to provide network TV for the Padres, and MLB is now operating in that capacity.  But MLB is only paying a portion of the revenues the Padres anticipated.

Here is a more complete story on the current plight of the Padres.  What will happen after the loss of owner and Chairman, Peter Seidler, is still open.

https://www.sandiegouniontribune.com/sports/padres/story/2023-09-25/padres-payroll-juan-soto-nick-martinez-seth-lugo-michael-wacha-debt

Minnesota, after winning the AL Central, is also on a cost cutting plan.  La Velle E. Neal III of the Star Tribune relays that Minnesota’s efforts to cut costs have not been limited to the major league roster. The club’s scouting department has seen a number of departures thanks to both desire to trim payroll and “streamline” the club’s scouting apparatus with an emphasis on analytics.

They are not the only teams that are struggling with the higher payroll costs.  And now we are hearing reports that one player could be asking for $600MM with no evidence that he will ever be able to pitch at the elite level again.  Maybe Ohtani will be able to, but that is a lot of money to gamble on one player.  I have said it continuously, this is not a baseball decision, but a business decision.  Probably one that some teams will be able to recoup in non-baseball strategies and team value increases.

Teams are playing with monopoly money, and the big guys own Boardwalk and Park Place and have hotels, while the low revenue teams are doing everything they can do stay away from Boardwalk and Park Place.  The Dodgers are one of the teams on Boardwalk and Park Place, but not the only team.

The Dodgers have the ability to play the $$$ game.  But they have decided to play the long game rather than take the path of the Padres.  Ken Rosenthal was asked which team is the best operated and he had this to say:

“They’ve performed remarkably under the (Andrew) Friedman/Dave Roberts regime. They are in the playoffs virtually every year. They have one of the best farm systems in the game virtually every year. Yes they have more money no doubt about it and they generally use it quite well but in terms of putting a competitive, winning team on the field every season, giving their fans something to look forward to every season. No team has done it as consistently well over a longer period than the Dodgers.”

For a complete interview:

https://twitter.com/FoulTerritoryTV/status/1726762348378239145?s=20

I cannot disagree with what Ken Rosenthal had to say.

It is not just baseball personnel that costs.  MiLB player costs, scouting costs, development costs, analytic costs, management payroll and benefits, interest…The Dodgers have reportedly exorbitant management payroll, analytic costs, and development costs.  The Dodgers generate a lot of revenue, but a lot of that revenue goes into a pool to help the low revenue producing

Badger opined:

If they want Burnes above anybody else they can probably get him. The Brewers are gonna want the house, but for any player in the last year of a contract they will have to settle for less.

 I still believe the Dodgers can sign Ohtani and get the pitching they need:

 Ohtani
Yamamoto/Imanaga
Giolito.
And perhaps Burnes in a trade.

 It could happen. Will it?

 We wait.

I assume they can as well.  Ohtani – $50MM, Imanaga – $17MM, Burnes – $15.1MM (Est arbitration).  That will put them over the CBT threshold, but barely, and will not be a concern.    That leaves them without a RH bat, and even though many of you believe Vargas can be that RH bat, I am not sure the Dodgers do.  If the Dodgers do get a RH bat, that will leave Jason Heyward looking for another team.

If the Dodgers choose not to add that RH bat, and instead choose to re-sign Jason Heyward, that leaves him in a platoon role, which I hate.  But the Dodgers have no problem with platooning, and in fact choose that as their preferred strategy.

Could the Dodgers look more at Dylan Cease because of 2 years control?  His estimated arbitration salary will be $8.8.

If the Dodgers do sign Ohtani, that would put the Dodgers AAV payroll north of $100MM for three players for 4 years, and around $80MM for two players for 5 subsequent years.  There is no guarantee that Ohtani will ever return to being an elite pitcher, and that level of a commitment for an offensive weapon for 10 or more years will be formidable to absorb.

Yes the Dodgers can do it.  Will they go all in this year?  Will that have an impact on the future capabilities of the team.  None of us know those answers, and the Dodgers are not going to share.  But there is a lot more to the equation and algorithms about signing Ohtani or not that we will never be made aware of.  Only if they sign him or not.  Stay tuned.

Monopoly money indeed.