Dodgers owe more than $1 billion in contract deferrals to Shohei Ohtani, Blake Snell and other players | News, Scores, Highlights, Stats and Rumors

BRONX, NEW YORK - OCTOBER 30, 2024: Los Angeles Dodgers two-way player Shohei Ohtani (17) holds the World Series trophy during locker celebration. Game 5 of the World Series against the Yankees at Yankees Stadium in New York, Wednesday, October 30, 2024. (Robert Gauthier/Los Angeles Times via Getty Images)

Robert Gauthier/Los Angeles Times via Getty Images

Like Lloyd Christmas and Harry Dunne on a shopping spree, the Los Angeles Dodgers accumulate numerous IOUs.

According to the Associated Pressthe team has accrued more than $1 billion in deferred payments to seven players between the years 2028 and 2046 after this offseason’s contracts with Blake Snell (five years, $182 million, including $66 million in deferred money until July 1, 2046) and Tommy. Edman (five years, $74 million, including $25 million in deferred money until July 1, 2044).

Unlike the Stupid and dumber However, the Dodgers are doing smart business with their new practice of pushing the bill into the future.

The team’s deferrals — including the $680 million owed to superstar Shohei Ohtani between 2034 and 2043 as part of the 10-year, $700 million contract he signed last winter — allowed the Dodgers to bypass the luxury tax, thereby saving them a lot of money in the short term.

That’s the big part, but Mookie Betts’ 12-year, $365 million contract includes $115 million in carryovers between 2033 and 2044; Freddie Freeman’s $162 million over six years includes $57 million in deferred money between 2028 and 2040; Will Smith’s 10-year, $140 million deal calls for $50 million in deferred money to be paid between 2034 and 2043; And Teoscar HernándezLast season’s one-year $23.5 million included $8.5 million in deferred money to be paid between 2030 and 2039.

In the short term, this practice has allowed the Dodgers to build an absolutely all-star team, one that won the World Series in 2024 and will be among the favorites for years to come.

Players also benefit on several fronts, including avoid higher taxes in California on their income if they move out of state during the years the deferred payments are made.

Jared Weaver @Weave1036

Everyone is complaining about this delayed money situation with the scammers…it’s easier to sign knowing you won’t pay Cali taxes on all your money…this could obviously be on something

The downside for the Dodgers, of course, is that the bill will eventually come due, and it will be a crazy amount of money. But current savings can be invested elsewhere, and when it comes time to pay, the Dodgers could be well prepared to make those payments while still fielding a competitive team, especially since the revenue and tax threshold luxury will increase in the years to come.

This is undoubtedly a loophole that many small market franchises will not exploit because they simply cannot afford this level of future salary obligations. This is also a gap that could be filled during the negotiation of the next collective agreement.

“An Ohtani contract, for example – (averaging) $70 million over 10 years – $70 million of which should be factored into the luxury tax, not the present value,” Ken said Rosenthal of The Athletic during the last Fetid territory podcast (9:18). “It would prevent the Dodgers from messing with this. It’s not that they’re doing anything illegal. It’s perfectly legal. But it would prevent them from circumventing the luxury tax calculation that way.”

It should be noted, however, that deferred payments are not a new thing. Anyone who has never celebrated Bobby Bonilla Day is well aware of this. But the Dodgers have taken it to a whole new level, and it seems likely that this loophole will eventually be closed for them.