One of the positives about getting to the WS and extending it to 7 games, is that there is only 5 weeks before the Winter Meetings in Orlando. We are going to have to pack in a lot of thought and suggestions about the restructuring of a 104 win team into a WS champion. We are all so much smarter than Friedman and Zaidi sitting in front of a computer without having all of the facts, but that is what makes the Hot Stove League the second best time of the year. We all get to play MLB GM.
Before we start looking at a Giancarlo Stanton or any of the free agents, we need to understand the current financial picture of the roster, also while assuming that the organization wants to get below the Luxury Tax. To review, the luxury tax per the new CBA is described as follows:
“A club exceeding the Competitive Balance Tax threshold for the first time must pay a 20 percent tax on all overages. A club exceeding the threshold for a second consecutive season will see that figure rise to 30 percent, and three or more straight seasons of exceeding the threshold comes with a 50 percent luxury tax. If a club dips below the luxury tax threshold for a season, the penalty level is reset. So, a club that exceeds the threshold for two straight seasons but then drops below that level would be back at 20 percent the next time it exceeds the threshold.
Clubs that exceed the threshold by $20 million to $40 million are also subject to a 12 percent surtax. Meanwhile, those who exceed it by more than $40 million are taxed at a 42.5 percent rate the first time and a 45 percent rate if they exceed it by more than $40 million again the following year(s).
Beginning in 2018, clubs that are $40 million or more above the threshold shall have their highest selection in the next Rule 4 Draft moved back 10 places unless the pick falls in the top six. In that case, the team will have its second-highest selection moved back 10 places instead.”
2017 will be the 5th consecutive year they will incur a luxury tax bill. If the Dodgers final payroll exceeds $235M for 2017 (and it will), they will pay an additional 45% excise tax making it 95% of the amount that exceeds $235M.
I am using Eric Stephen’s salary chart located at TrueBlue.com as my source. Eric does a great job at staying current with this information. Currently the Dodgers have 17 players with committed contract obligations totaling $149.2 million. This includes 10 or 11 expected to be on the LAD 25 man roster (depending on Kazmir). Two assumptions I am making that will impact that number are, the Dodgers will exercise the $9M option for Logan Forsythe rather than $1M buyout, and that Andre Ethier’s Dodger career will come to an end and the Dodgers will buy out his option at $2.5M. The Forsythe option is an additional $8M bringing the total to $157.2M:
Logan $1.0M or $9M option
There are 9 players eligible for arbitration. MLBTradeRumors does a great job of projecting the potential arbitration values. They have forecast that the nine Dodgers should get $26.3M, bringing the total salary levels to $183.5.
We also need to take into consideration that Kenta Maeda’s contract is chalk-full of incentives. Maeda earned an additional $11.5M on his incentives in 2017, and assuming he can earn a similar amount in 2018, that brings the total to $196.0M.
That leaves Corey, Cody, Barnes, Toles, Stripling, Stewart, Farmer, Buehler, Dayton, Liberatore, and Verdugo who are under team control and figure to be on the 25 man or fight for one of the positions. That does not include Font, Paredes, Thompson, Culberson, Segedin, Dickson, Ravin, and Urias who are all on the 40 man. While only ML service earnings count towards the salary/luxury tax, there is a cost associated with packing the dugout and bullpen in September. And yes ML DL time counts towards ML service.
It is pretty obvious to see that without doing anything, the Dodgers will be in excess of $200M again in 2018. So what do they do? AGon is a sunk cost. He cannot be moved. Kazmir is another sunk cost who cannot be moved. With the emergence of Austin Barnes, Grandal is a prime candidate to be moved saving $7.7M. Can McCarthy be moved? Maybe the Yankees or Orioles will take him for one year. I would not expect more than a mid-level prospect in return. A real lottery pick, but $10M could come off the books. They would probably move McCarthy for a low level prospect to save the dollars. Maybe Maeda can be moved (approximately $14.5M). Ryu would be another candidate ($7M). Joc will probably cost more than Toles and Verdugo combined, but $2M is not a big cost to absorb. Joc will get moved if FAZ gets value in return. I see no chance that Wood gets traded. That leaves Fields, Avilan, Baez for some (minor) potential saving.
How should they spend the savings? One thing I believe they need to do is re-sign Brandon Morrow. He will be in the 2nd tier of relievers with Mike Minor and Bryan Shaw behind the top relievers of Greg Holland, Wade Davis, and Addison Reed. He is probably going to be in the 3-4 year $8M to $10M AAV. Yes the Cardinals may want him, but to me, a bigger obstacle will be the SF Giants. Morrow is from the Bay Area, and stayed in the Bay Area to go to Cal. The Giants need a reliever badly, and they have Matt Cain $$$ coming off the books. I can see SF going after Morrow big time. I have not been shy saying how much I loved the Morrow acquisition, and I will consider it a mistake not to re-sign him.
Do they go after Stanton? They cannot do it unless they unload other contracts, and I do not see the Marlins wanting any of the contracts the Dodgers want to unload. If the Marlins do agree to assume some dead contracts (Kazmir) instead of retaining contract dollars, the Dodgers will have to give up multiple high level prospects. I think the Dodgers can provide a lot of good prospects to make a deal, but will they? They also do have the ability to absorb his $25M 2018 salary if they move other contracts, and then be good to go below the luxury tax completely for 2019. But again, will they?
Stanton has a no trade clause, and wants to go to a contender. So I do not see him agreeing to go to Philadelphia even though the Phillies have the salary flexibility and prospects to make it happen. The Giants (who seem to be the favorite) have some salary flexibility, but not the prospects. Do the Marlins make a trade just to get rid of the contract? I do not see how a new ownership can explain why they are trading Stanton just to get rid of the contract and no player prospects in return. I still see new ownership needing to put behinds in the seats and would love to see Yasiel Puig as a Fish, notwithstanding the apparent chasm between Mattingly and Puig. To me it is a natural fit, but the Dodgers still have 2 years control of Puig to see how he finally comes together.
Or do they keep the salary below the salary tax level so that the penalty will only be 20% with the 2018 batch of free agents. I would like to see Morrow in a Dodger uni next year as the only FA signing. I believe the Dodgers have the prospects to trade for other needs/wants, and will do so. The Dodgers have the budget and prospects to make them better for 2018. This should be a fun Hot Stove League to follow and to discuss a multitude of trade scenarios (at least for me).