Dodgers plan: Stay be­low lux­ury tax

The Tribune (SLO) - - Sports - BY BILL SHAIKIN

The Dodgers plan to keep their player pay­roll be­low the level that would re­quire a lux­ury tax pay­ment for at least the next four years, ac­cord­ing to a doc­u­ment pre­pared for po­ten­tial in­vestors and re­viewed by The Los An­ge­les Times.

By cut­ting pay­roll this year to the point where they were not as­sessed a tax, the Dodgers re­duced their tax rate for fu­ture years. How­ever, if they do not wish to pay the tax at all, the Dodgers could be hard-pressed to sign top free agents this win­ter, in­clud­ing cov­eted out­fielder Bryce Harper.

The Dodgers spent $195 mil­lion in player pay­roll this year, when they ad­vanced to the World Se­ries for the sec­ond con­sec­u­tive sea­son and won the Na­tional League West for the sixth time in the six full sea­sons un­der the own­er­ship of Guggen­heim Base­ball Man­age­ment.

Un­der the pro­jec­tions pre­pared for po­ten­tial in­vestors, the Dodgers would spend $185 mil­lion in 2019 and 2020, $191 mil­lion in 2021 and $196 mil­lion in 2022.

The Dodgers’ pay­roll pro­jec­tions are not bind­ing. One high-rank­ing team of­fi­cial called the fig­ures a fore­cast, and an­other said he would be shocked if the player pay­roll did not top $200 mil­lion next sea­son.

Dodgers spokesman Steve Brener de­nied a re­quest for an in­ter­view for this story.

The lux­ury tax would be as­sessed on any team that spends $206 mil­lion in 2019, $208 mil­lion in 2020, and $210 mil­lion in 2021. The 2022 thresh­old has not been set.

At a news con­fer­ence last week, Dodgers pres­i­dent of base­ball op­er­a­tions An­drew Fried­man de­flected a ques­tion about whether the team would be will­ing to pay the lux­ury tax next year.

“It’s not some­thing that we’ve re­ally got­ten into at this point,” he said. “More than that, there’s no ques­tion that we have plenty of re­sources to win a World Se­ries next year.”

The Dodgers signed Clay­ton Ker­shaw last Fri­day to a three­year con­tract with an aver­age an­nual value of $31 mil­lion, tied with David Price of the Bos­ton Red Sox for the high­est such fig­ure among ma­jor league pitch­ers. Ker­shaw can earn as much as $4 mil­lion more a year in in­cen­tive bonuses.

“You would ex­pect the Dodgers to have one of the high­est­pay­roll teams in base­ball,” Ker­shaw said be­fore the sea­son ended. “You would ex­pect, since we got un­der the tax thresh­old this year, the club would be able to spend for a few years af­ter that.”

It is un­cer­tain whether the Dodgers could re­duce their pay­roll to $185 mil­lion next sea­son. If catcher Yas­mani Gran­dal and pitcher Hyun-Jin Ryu each ac­cepts his qual­i­fy­ing of­fer, and if the team ex­tends salary ar­bi­tra­tion to seven play­ers – the six ar­bi­tra­tion-el­i­gi­ble play­ers on the post­sea­son ros­ter, plus in­jured short­stop Corey Sea­ger – the Dodgers’ pay­roll would stand at about $190 mil­lion for 16 play­ers.

That fig­ure does not in­clude play­ers not yet el­i­gi­ble for ar­bi­tra­tion, in­clud­ing pitch­ers Walker Buehler and in­fielder Max Muncy. Those play­ers would be paid near the $555,000 min­i­mum.

The Dodgers have ex­plored the sale of a mi­nor­ity share of the team for at least two sea­sons. The doc­u­ment re­viewed by The Times pro­vides po­ten­tial in­vestors with man­age­ment pro­jec­tions of the team’s rev­enues and ex­penses. Those rev­enues and ex­penses can change over time.

The doc­u­ment was pre­pared be­fore the 2017 post­sea­son, when the Dodgers gen­er­ated ad­di­tional rev­enue by ad­vanc­ing to the World Se­ries for the first time in 29 years.

For the 2017 sea­son, the Dodgers paid $290 mil­lion to cover pay­roll and the lux­ury tax. Nonethe­less, in their 2018 pay­roll, the Dodgers hit the $195 mil­lion tar­geted in the doc­u­ment, en­abling them to avoid pay­ing a lux­ury tax for the first time in Guggen­heim’s six full sea­sons of own­er­ship.

Clay­ton Ker­shaw

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.