For those who have yet to take a thorough look at how the Dodgers’ payroll is stacking up for 2021, there’s a handy chart over at Fangraphs laying out most of the important details.
As it stands, the estimated luxury tax payroll for the Dodgers in 2021 sits at $197 million, which is about $13 million under the threshold. In normal seasons, fans might expect the team to blow past the cap to strengthen its player roster, especially since they’ve been under the threshold in recent years without penalty. But, when considering the state of finances in 2020 due to the pandemic, such an action for next season is extremely unlikely.
According to a NY Post story in late October, the Dodgers were on pace to lose a whopping $125 million due to the circumstances surrounding COVID-19. Similarly, right around the same time, President and CEO Stan Kasten told CNBC that it “will take the franchise years to overcome the lost revenue experienced during the pandemic-altered baseball season.”
Whether these financial circumstances have led the team to acquire questionable arms like Corey Knebel, James Pazos, Andrew Schwaab, Tommy Kahnle, Brock Stewart and Brandon Morrow instead of a proven, big-name reliever remain to be seen.
Recently, the Dodgers have been linked to veteran infielder DJ LeMahieu, but after doing the math, it seems almost impossible the team would be able to bring on the 32-year-old righty hitter without surpassing the threshold. Our friends Mark Polishuk and Connor Byrne at MLBTR outline the LeMahieu situation nicely, reflecting that the infielder could be seeking a contract somewhere in the range of five years and $100 million, a figure which the Yankees are even hesitant to commit.
Nevertheless, it still might be possible for Los Angeles to sign a free-agent reliever with a proven pedigree. While somebody like Liam Hendriks may end up being overpriced for the team’s budget, a capable arm like Brad Hand, Alex Colome or even Blake Treinen might be possible for the taking. Or, front-office boss Andrew Friedman could continue his pattern of acquiring restoration types of projects and snag somebody like the hard-throwing Trevor Rosenthal on a low-risk deal.
There have also been some suggestions that the Dodgers could potentially move some of their most burdensome salaries this winter in trades, specifically in the form of the $20 million owed to Kenley Jansen and the $8.3 million owed to Joe Kelly. However, based on how creative and frugal some rival clubs have been handling their money so far—see the 2020 Rule 5 Draft—chances of another team absorbing the salaries of Jansen and Kelly are slim, particularly when considering the inconsistencies of both players in recent years.
Something else to consider is the idea of David Price opting out of a second-consecutive season because of the coronavirus. According to manager Dave Roberts, the veteran left-hander still hasn’t decided whether he’s going to play in 2021, and his decision could significantly impact the payroll budget for both Los Angeles and Boston.
Price is owed $32 million in each of the next two seasons, with the Red Sox picking up $16 million of that amount for both years.
Regardless, while there probably will be a few other minor moves made by the Dodgers before players start filing into the clubhouse at Camelback Ranch, perhaps the more prudent strategy will be to wait until the 2021 summer trade deadline and upgrade based on the team’s overall first-half performance and needs.
Think Blue Planning Committee 
AF is going to get a right handed bat (JT or someone else or maybe both) and my guess is that he will also sign another established bullpen guy. That’s going to cost more than $13MM, but I read somewhere that they were about $20MM under the tax limit so I’m not sure where the discrepancy lies.
Going slightly over will only result in a small penalty and they have lots of salary coming off the books next winter so they could get back under again at that point. I know they lost big money this year but this is the year and situation where they could take advantage of a weird marketplace and do some interesting things.
Kenley’s contract is pretty much untradeable, but in the right trade (taking back even more salary) I think they could move Kelly’s.
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Here’s the chart at Fangraphs that lays out all the details. I thought I had it linked in the original post, but for some reason it was not there. It indicates all the numbers leading up to the $197 million. https://www.fangraphs.com/roster-resource/payroll/dodgers
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Is it possible that Sierra’s $8.5MM doesn’t count against the tax because he isn’t on the 40-man?
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It does not count towards the tax. Fangraphs doesn’t have it included—it is just noted. If you look at the last part of the chart,, the monies do not include anyone not on the 40-man.
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OK Schlossman, you’ve left me no choice. We’re going over the limit!
And just to spite you, we’re going to take on Arenado’s full salary.
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Maybe that’s the holdup in signing Turner—Friedman’s trying to free-up some dollars. I really wonder what his contract will turn out to be. He’s coming off 4/64, but he’ll likely take a cut. Tim Dierkes at MLBTR has him at 2/24. You’d think the Dodgers would jump on that.
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2/24 sounds about right to me, although he wants three years and that’s going to be a sticking point. If the Jays strike out on Springer and Bauer they just might do it.
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Only one open spot on the roster right now, so not much room to maneuver unless they DFA someone. Two guys can be moved when they are allowed to be placed on the IL. Hell, if we are going over, lets go whole hog and get Hendriks, Arenado, and Hand.
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Yeah, I agree. If they go over, they should do it in style. Then, let all that money come off the books at the end of 2021.
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I agree, spend some of that gold!
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Think we are missing the point here. Nobody is spending the money because most don’t have much after last year. Dodgers do but they whine and are not known to spend money foolishly in recent year’s. If dodgers lost 125/150 mil over 60 games, do the math over 160 games. The pandemic is 10 times worse than last spring so don’t expect to see fans in the seats thus year. Don’t expect to see a full season. They need some games to keep interest up but 60/80 games is probably all we’ll see. These are business’s with shareholders. Hope I’m wrong but its simple economics.
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Yes…and the Padres will be financially distressed making payroll of the future. A fire sale as well as dumping their young prospects to pay for what they can’t afford.
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Unprecedented times, a time of great risk, but also a time of great opportunity.
President and CEO Stan Kasten told CNBC that it “will take the franchise years to overcome the lost revenue experienced during the pandemic-altered baseball season.” I believe it! Back of the envelope calculation, 4M lost fans in 2020 times $100 (average spending) equals, $400,000,000. That’s approximately twice the total payroll. DEVASTATING! Blood in the street time.
Fortunately, Dodger finances are probably better than most teams, creating great opportunity. Elite talent is on sale, both in the free agent market and probably the trade market. But as pointed out, FRUGAL is the name of the game right now. I’m sure EVERY effort will be made to stay under the luxury tax threshold, but there is still $13M to play with and I’m sure Friedman is praying Price will sit out another year, saving $16M. Price’s decision is probably a huge reason Dodgers have been quiet so far.
More than anything Dodgers need a good right handed hitting infielder to replace Hernandez and Turner. Beefing up the bullpen seems like the second most important item and probably where the Dodgers can get the most bang for their buck. Price opting out might put LeMahieu and two elite relievers into the budget. Price opting in probably means bargain basement time.
I suppose, it’s still possible that if elite talent becomes available at rock bottom prices, flipping a bad contract or two for a bigger bad contract (Arenado) could happen, luxury tax be damned, but probably a long shot.
Bottom line to me, still a lot of activity to come, but it could be big or little stuff. Stay tuned.
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…but didn’t Price already said he’ll be back for the ’21 season? I believe I read a comment somewhere of his decision.
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No, Price is still undecided.
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I think Price did indicate at one point that he expected to play this year, but that was before things got so bad again. So he’s now gone back to undecided.
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