Philly Front Office

Not all super teams are created equal. For most, age and salary are the great equalizer. Sure, a team might seem unstoppable for a little while, but the elements always catch up. The issue with the Dodgers is that they are a machine designed past these impediments and it’s causing serious problems.

Last night Kyle Tucker signed for 4/$240m, a staggering flex of financial might that even Steve “smoke but no fire” Cohen didn’t want to match. It not only gives LA the top bat on the market, but the structure doesn’t even clog their books in the future. With an opt out in 2 years, they get his prime and nothing more.

I’m all for players getting paid, that’s not the problem. The issue is that this will not affect the Dodgers’ bottom line at all.  Any other team would be crippled financially. Not them.

In the NFL, teams share almost all of their revenue. There are no local TV contracts that allow a big market to suffocate a smaller one. Even if there were, a hard cap prevents over spending. In almost every respect, it is a level playing field. The NBA has a soft cap with serious deterrents to roster stacking. Teams are allowed their local broadcasts and their distinct methods of profit, but simply spending because you can quickly results in staggering financial losses. The Boston Celtics were looking at a $500m team this year which would have resulted in hundreds of millions coming directly from the pockets of ownership.  They broke up their roster.

MLB has revenue sharing, but it’s not the same as the other models. It’s complicated, but what you need to know is that every team shares 48% of their local revenue including tv, tickets, and concessions. While the tickets and concessions can be similar amongst teams assuming a good product, the tv money is a different story. This is an article for a different day but while many teams are losing tv money almost completely due to the Main Street/Diamond sports debacle, the Dodgers are swimming in money like Scrooge McDuck.

The Phillies do very well in terms of local tv revenue, outstripping everyone in the NL East at around $125m per season. They keep half of that. That’s a nice chunk of change. The Dodgers make around $335m. WTF! So, while most teams are now splitting up the scraps of the biggest markets, the Dodgers are keeping around $175m if just their local tv, not including the other revenue streams like tickets and national media.

The Phillies break even at their $300m payroll. The Cohen backed Mets lose a staggering amount of money each season. The Red Sox keep payroll low and pocket around $100m each season. The Dodgers and their enormous payroll STILL make a huge profit.

This isn’t even getting into their intelligent, Howie Roseman -esque use of the rules. They get charged a 110% luxury tax penalty on Tuckers contract (over simplification), but they are only paying Shohei Ohtani $2m this year. They are getting taxed on much more, but the out of pocket is nothing. They make more money off him than they could ever pay him. When the bill comes due, it will be long in the future after they’ve reinvested all their profits. They know exactly what they’re doing

I’m not saying I’m for a salary cap, but MLB is in desperate need of a more level playing field. It’s not the Dodgers problem that they are smart, well endowed, and aggressive. MLB needs to find a solution for bringing them back to the pack while forcing their bottom feeders to spend as well. MLB is rolling in money right now but no one is happy (except Dodgers fans). That’s a problem.