The Dodger Lockout

Major League Baseball's current CBA doesn't expire until after the 2026 season.  There are already rumblings that there will be a lockout when it does.  Not because of any disagreement between the owners and players.  They appear to be on the same page regarding most of the major stuff.  Rather, it's discontent among the owners that will likely lead to what I'm calling the "Dodger lockout."

It should be noted that the Dodgers aren't breaking any rules.  Everything they're doing is allowed under the CBA.  The other 29 teams are (theoretically at least) capable of doing the exact same things.  Of course, they don't all have the Dodgers' financial might, but that doesn't make the Dodgers' approach "unfair," even though it might seem that way.  All they're doing, really, is taking advantage of a broken system.  It's that system the other owners want to change, and a lockout, unfortunately, is probably the only way to do it.

The Roki Sasaki signing is what really sent a lot of people over the edge.  After he was posted by his Japanese team, Sasaki had 45 days to sign with a Major League club.  The three "finalists" were the Dodgers, Padres and Blue Jays, with it ultimately coming down to the Dodgers and Padres.  Which is exactly what everyone had expected for more than a year.  So, it came as no surprise to anybody when he picked the Dodgers.  It was almost as if it was preordained.

In fact, so many teams thought it looked shady that MLB opened an investigation.  They didn't find anything suspect, but it still made teams feel like idiots for having meetings with Sasaki when they had absolutely no chance of signing him.  If he knew he was going to the Dodgers all along, why string the other teams along?  Especially when there was no bidding war to be had since he was limited to a Minor League deal as an "international amateur free agent."

That, to me, is the loophole that the Dodgers exploited and needs to be closed.  Sasaki is classified as an "amateur" because of his age.  This guy is anything but an amateur.  He pitched four years in Nippon Professional Baseball, was a two-time All-Star, set records for strikeouts and threw a perfect game.  The Dodgers are getting a seasoned professional at a bargain price (because, you know, they need to save money) simply because he's younger than 25.

Here's why the Sasaki situation is a joke, though.  Roki Sasaki and a 16-year-old Dominican shortstop who's never played an organized game are both categorized as "international amateur free agents."  In what world are they the same?  That 16-year-old kid actually is an amateur!  Whatever team signs him will probably start him at A-ball and develop him through their Minor League system with hopes that he can contribute at the Major League level a few years down the line.  Sasaki, meanwhile, slots immediately into the Dodgers' Major League rotation.

Calling Sasaki an "amateur" simply because of his age makes a mockery of the system!  Any Japanese player who comes over from Nippon Professional Baseball, regardless of age, should be classified the same way.  If they're posted, they're a free agent with no restrictions on the type and length of contract they can sign.  Meanwhile, amateur free agents are just that.  Actual amateurs.

I wouldn't mind seeing changes to the posting system, either.  During his interview with MLB Network after the Hall of Fame announcement, they asked Ichiro why he ended up signing with the Mariners.  His answer was very simple.  Because they had the highest bid.  I'm not saying we should go back to that completely, but there would at least be a chance one team wouldn't be able to stockpile all the Japanese talent if they still did it that way.

An international draft was one of the big sticking points in the last CBA negotiations.  The owners really wanted it, but there was player pushback and it wasn't included in the 2022 CBA.  I'd suspect those discussions will also be a major topic with the next CBA negotiations, as well.  Teams need to feel like they have a chance at signing international talent, and not everyone does right now.  An international draft would be a way to fix that.

Then there's the deferred contracts.  The Dodgers have deferred more than $1 billion to free agents over the past few years!  Shohei Ohtani's only getting paid $2 million per season for the duration of his 10-year/$700 million contract.  The other $680 million was all deferred.  That's 97 percent of his entire contract!  And Ohtani's not the only one.  Blake Snell & Tanner Scott singed with the Dodgers this winter on heavily deferred deals, and there are also deferrals in Mookie Betts', Freddie Freeman's, Will Smith's and Tommy Edman's contracts.  That's seven players!

Deferred contracts are nothing new in baseball.  The entire reason "Bobby Bonilla Day" even exists is because of the amount of deferred money the Mets still owe him.  Ken Griffey, Jr.'s Reds contract also had a ton of deferred money, and there are several other retired players still being paid by Major League clubs.  The Dodgers aren't even the only team with current players that have part of their salary deferred.  The issue with the Dodgers, though, is the sheer volume of deferred money not currently on their payroll and the sheer number of players with that type of deal.  The Dodgers are deferring more payroll than some teams will spend on their entire active roster this season!

Again, there's nothing "wrong" with deferring money.  With no salary cap and no salary floor, teams are free to spend whatever they like on their payroll.  If they cross certain thresholds, they'll have to pay a luxury tax, which the Dodgers do every year.  That's where the problem with all of the Dodgers' deferred contracts comes in, though.  By deferring so much money, they're lowering the contract's annual value, thus lowering the amount they owe on that contract towards the luxury tax.

Because of all the deferred money, Ohtani's contract doesn't count anywhere close to $70 million a year towards the luxury tax.  Ditto about Betts, Freeman, Snell, etc.  When Ohtani deferred so much, he even said his reason for doing it was so that they could use the money they were "saving" to sign additional players.  (Signing bonuses don't count towards the luxury tax either, BTW.)  That's another ridiculous loophole that needs to be closed. 

All the Dodgers have done is take advantage of that loophole, so I'm not pinning this entirely on them.  However, if you sign a player to a "$70 million per year" contract, that contract should actually count $70 million towards the luxury tax.  Especially since there's no guarantee he'll still be on the team when that contract is over (regardless of how much money he's still owed).  You can structure it with the player however you want, but that contract's annual value towards the luxury tax should be its actual value, not the average after deferrals.

These heavily deferred contracts have even caught the attention of the California State Legislature.  A State Senator introduced a bill trying to stop it, in fact.  His argument (which is actually a pretty good one) is that it'll potentially end up costing the state millions of dollars in tax revenue.  Since there's no guarantee the players will still be living in California after they're no longer playing for the Dodgers, they'll theoretically be able to avoid paying state income tax on the deferred salary they're still owed.

While that's not a concern for Major League Baseball and the other 29 owners, they still have plenty of reason to want to see changes regarding deferred contracts and how they're counted against the luxury tax.  That may even be a bigger issue than the Roki Sasaki/international amateur thing.  Which is why I expect both things to be major topics of discussion in the next CBA negotiations.  Not to mention the cause of the likely "Dodger Lockout" once the current CBA expires.