The Dodgers are in the middle of a very quiet off-season and there are several reasons why, but a couple of reasons seem to be the most obvious to me.
One of the most obvious reasons is that this year’s market has focused on long-term contracts, something from which the Dodgers wisely try to avoid as much as they can
Another reason is the Luxury tax.
The Luxury tax threshold for 2023 is $233 million, and if the Dodgers go over it would be their 3rd year in a row. That would mean that they have to pay a 50% tax on their payroll this year and any consecutive year they exceed the threshold in the future.
If they can stay under the threshold, they would be “resetting” their penalties back to 0, then would get to go back to the start of the penalties scale. The first year a team goes over the CBT threshold the penalty is 20% then it moves to 30% the 2nd year then finishes with 50% every year after that which is the position the Dodgers are in.
The Dodgers payroll is projected to be $189,964,140 in 2023 and they have 37 of their 40 roster spots used. That means that they have $43,035,860 to spend on their last 3 spots.
But, they still don’t have total clarity on the Trevor Bauer situation.
It’s unlikely that Bauer’s appeal will get completely overturned, but, if it did, it would add somewhere over $30 Million dollars toward the CBT depending on if or how many penalties or taxes would be added if the Dodgers were forced to backpay his salary.
At the very least, a complete overturn would leave the club around $10 million to spend on its last 2 spots, assuming they immediately add Bauer to their roster.
If they chose to release him they would still be on the hook for that money, but would still have 3 roster spots to fill.
Regardless of your opinion on that issue, of which this article is not intended, it continues to be a thorn in the side of the Dodgers.
So, the Dodgers have several different directions they can take and I don’t think they’ve made their mind up about which way they actually want to go.
One direction the organization could take is that they could go “all-in”, and sign big free agents, like Dansby Swanson, and not worry about the penalties. That would eliminate the indecision of the Bauer situation in terms of the CBT because they would be going over regardless.
Another option is to try and stay under the CBT, but only as long as Bauer’s salary doesn’t get added toward it. In this case, again, they would have $43,035,860 to spend on their last 3 roster spots and would have to hope for the best in Bauer’s appeal.
A third option would be to keep promoting in-house and stay under the tax regardless of what happens in the Bauer situation. Depending on backpay and penalties in the case of an overturn, this might not end up being an option at all, but, then again, it might be as well.
As you can see, there are a bunch of moving parts in this situation, and, as I stated earlier, I don’t think the Club has their minds up as to which way they want to go, even at this point, as one Free Agent after the other comes off the market.
Instead, I think they are letting the market dictate that decision.
If the right player comes along for the right value, I am of the opinion they will strike regardless of CBT penalties. But, they’re not going to go over the CBT threshold, thus having to pay a 50% tax penalty on their payroll, then also overpay, quite possibly by a lot, for the Free Agent(s) that put them over.
They would be losing value in both directions in that case, and if the contract(s) are long-term, they would be taking the chance of digging a hole they can’t get out of.
Or, at the very least, a hole that would be very difficult to get out of.
If I’ve learned one thing about the Dodger’s Front Office it’s that they always have a plan and they are incredibly calculated and equally as disciplined in carrying out that plan. In this case, I think the plan is the right one, even if it’s one that fans aren’t happy with.
Everyone wants the shiny new toy, especially considering the moves the Padres have made and now the Giants. But what I want is excellence, and the roster flexibility to create consistency in that excellence year after year. The discipline and plan of the Dodgers Front Office, both in the past and the present, give the Dodgers, in my opinion, their best future.
