This will be somewhat unusual for me, as generally I am an extremely unapologetic pro-FAZ supporter, and I still am. But to critically examine any operation, personal biases need to be thrown out, even when it comes to the Dodgers.
Sports team owners do not get into the game for short term profits. The big profits come when the team is sold. For the Dodgers, the ownership group has seen their $2B investment climb to $3B in 6 years. That is a pretty good return. Even with that increase, the operating statements are also positive. Per an April 2018 Forbes article, here are a few dashboard points from the 2017 financials:
Gate Receipts – $188M
Total Revenue – $522M
Player Expenses – $261M
Operating Income – $68M
Debt to Value Ratio – 14%
It does not appear that the team is experiencing much of a financial stranglehold even after the horrendous player salaries that FAZ inherited. FAZ did a great job of getting under the luxury tax. But that only makes sense if in fact they plan to bid on Bryce Harper. Signing Kershaw should not be a financial or luxury tax issue. Kershaw already has a $30M luxury tax hit for the next two years. So adding another $5M will not take them over the limit. Will they have to overpay and incur some years where his WAR will not justify the salary? I am sure, but he is Clayton Kershaw and he deserves to retire as a Dodger. They lose Forsythe and Grandal salaries next year, and Kemp and Hill the year after. Can they add Harper without going over the luxury tax next year? Probably not, but so what. With the loss of Kemp and Hill after 2019 they should be able to get back under even with Kershaw and Harper.
The Red Sox did not let the luxury tax bother them. Even with the Pablo and Hanley contracts, they still signed pitchers Rick Porcello and David Price. They are in the middle of an 8 year $110M Dustin Pedroia contract. They traded for high priced reliever Craig Kimbrel. This year they signed Mitch Moreland and inked a $100M+ contract for JDM. Their luxury tax is north of $235M, and I do not get the impression that they care. Make a mistake? Okay move on and get somebody else. They were also NOT worried one bit about moving the overall #1 baseball prospect (Yoan Moncada), their #1 pitching prospect (Michael Kopech), a top ten BoSox CF prospect (Luis Alexander Basabe), and a lottery pick reliever (Victor Diaz) for Chris Sale. And now they are 13-2 atop the AL East. After a slow start, JDM is starting to hit and Mitch Moreland now has 4 HR’s. I like their 2018 chances.
The Dodgers were seen as a likely trade partner for Chris Sale at the trade deadline in 2016. I do not know what or if any players were ever agreed upon, but I do know that the one player the White Sox coveted and was told was not available was Julio Urias. At the 2016 trade deadline, the Dodgers would not let him go. We will never know whether Bellinger or Verdugo or Alvarez were ever discussed. But IMO, with Chris Sale the Dodgers do not trade for Rich Hill in 2016, and maybe not Darvish at the 2017 deadline, and I think they win the WS in 2017; maybe 2016. Could they have made the trade for Sale if Urias was included? I doubt that we will ever know.
The Nationals are over the luxury tax limit at $204M, but will lose Murphy, Gio, and Wieters after this year, and their $35M+ salary. That should be plenty for them to re-sign Harper and maybe Keuchel to replace Gio. We know they will not be outbid for Harper. They are not afraid to spend. So it will come down to who does Harper want to play for…Cubs, Dodgers, Nats, Giants, or Yankees? It will undoubtedly be one of those 5. None of the Cubs, Giants, or Yankees will be shy about spending. With Pence and McCutchen off payroll, the Giants will definitely be in the hunt for Harper. With Bryce Harper as his best friend, I am sure that Kris Bryant will be in Theo’s ear to go out and get Bryce. If the Dodgers draw the proverbial line in the sand with a max price, they will lose out on Harper.
FAZ has been brilliant at building teams for the 162 game season and re-building the farm system. They uncover nuggets like no other front office. But they just do not seem get that difference maker either by chance or choice. I am as big of a fan of the Dodger farm system as there is, and I cannot count the number of prospects and non-prospects who become my favorites. But I am not naïve, and I know that the likelihood of these players wearing LA Dodger Blue are not great. I like Alex Verdugo, but right now he is blocked. Will he develop enough power to be a corner OF? What about Henry Ramos? Andrew Toles? Both blocked (and not by Joc). Yusniel Diaz isn’t even on a team right now. Why? Are Manny Banuelos and Zach Neal blocking the development of Yadier Alvarez and or Mitchell White? Is C.C. Lee or Brian Schlitter blocking Josh Sborz? Do the Dodgers hold on to RHP or OF until their value drops down to Zach Lee and Trayce Thompson levels? How many utility players do the Dodgers need? I think my point is, is that FAZ has done a great job of building a diverse team of replaceable players and the resultant depth, but have not yet acquired that big difference maker. Are the value of some of their excess capable of putting a package together to get that special player?
I was pushing for Gerrit Cole at the last trade deadline and during the off-season. Not everyone agreed. The Pirates did get some quality players, but the Astros did not have to give up their best, so it is doubtful that Walker Buehler would have been a deal breaker. Alex Verdugo? No doubt. Ross Stripling or Brock Stewart? Absolutely. Mitchell White? Pedro Baez (as a Michael Feliz). Add a lottery pick. Would Verdugo, Stripling or Stewart, White, Baez, lottery pick OF be enough to offset, a Joe Musgrove, Colin Moran, Michael Feliz, and Jason Martin offer for Cole? Cole was not situated in the Astros rotation as their Ace, but he is pitching like one. He is #3 behind Keuchel and Verlander.
But the Cole ship has sailed, and we must move on. Maybe Sunday’s game will kick off something positive for LAD, and they can get back to the top with the DBacks. Taijuan Walker just went on the DL and could be a potential TJ surgery candidate with “severe” forearm soreness. The DBacks just do not have the depth to lose a mid-rotation pitcher like Walker. Let’s assume that the Dodgers do get back to the top and will need that difference maker in July. The DBacks will certainly be in on the trade deadline, and they will be looking for that difference maker. What will FAZ do this time?
Discussion (47)
Disagree, not disagreeable
Grandal performing well in his contract year.
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There are many worse #5s than Ryu in MLB.
Ryu continues to be good against everyone but Colorado and AZ. At some point Buehler has to force Maeda to the pen. Maeda has said that his contract shouldn’t be a factor. If Buehler has 150 innings scheduled this year, how many should be used up in AAA if he’s throwing well? 20-30?
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I’m with whoever suggested Liberatoe up and Alexander down.
Did anyone see future Dodger Bryce Harper’s hr today? He broke his bat on the play! insane
I can’t say I get pulling Kemp that early with a 4 run lead.
Alex Verdugo has homered in 3 straight games – He is hitting .341
Great pitching in Tulsa today, aside from the 27 year old. Santana had 10 k, and Sborz with another save. I like this!!
Oh, and our big league team has scored a few runs today as well.
A/C D/C,
Who is Emmanual De Leon? Faced 4 batters today and gave up 3 hits and a BB for Tulsa (and almost gave up the game). 47.25 ERA.
Good piece A.C. To use Mark’s words, I think it would be felony stupid to worry about going over the luxury tax threshold by a few million dollars this year and then not bring in a Harper or another impact player. The Dodgers had Stanton, Darvish, and Morrow all wanting to become Dodgers. I’m sure there were others too. I know Darvish is disliked by many after his World Series flop and it was a flop, but he’s been a top 20 pitcher in his career. Signing any of them would have put the Dodgers over by an insignificant amount. So, if being under is priority #1 then they better make a big splash next off-season.
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I would say for the most part I’m pro-FAZ, but I’m not afraid to point out that the Dodgers rued the day they signed Scott Kazmir and Brandon McCarthy. Borrowing Mark’s words again. In the end, those signings had a much bigger negative impact than Gonzalez and Crawford. If they only had one bad deal to move or had moved all of those guys to Atlanta sooner they could have been in on Stanton like the Yankees were. Like most, they misread the market this year. If they had known how bad it was for players this year, they may have declined Forsythe’s option. Based on his career production, $9 million seemed reasonable, maybe a tad bit high, but reasonable and moveable. After seeing the off-season’s market, it is too high.
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I found it interesting that some article popped up this week that the Dodgers had inquired about Machado.
Taylor
Corey
Kike
Bellinger
Kemp
Grandal
Puig
Farmer
Ryu
Brooklyn, you stole my thunder… Machado would be that force in the order that we are looking for and definitely an L.A. kind of guy…
Lets just get to .500 and go from there…
Indiana??? Coach Knight, Reggie Miller and Hoosiers… As J.D. would say “Good night Mrs. Calabash wherever you are”…
Lots of good stuff from AC, and I probably agree with most of it. Maybe I’m wrong, but I get the impression AC, that your preference in next years free agent market is Bryce Harper. And no doubt, Harper would be a welcome addition. But if I had a preference it would be Manny Machado, given the depth in outfielders the Dodgers have in their system. Machado can play 3B, SS, and probably 2B as well. Given that Justin Turner isn’t getting any younger, and the fact that 2B will require a new body next year, I would think that Machado represents a more immediate need. Of course lots can change between now and next year, but as things stand now, my choice would be Machado if the Dodgers decide to become a bidder next year.
This has nothing to do with Dodger baseball, but it is an inspiring story about the newest Cinderella team that is going to Overthrow The King!
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https://www.theplayerstribune.com/en-us/articles/victor-oladipo-pacers-playoffs
prospects
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untouchables: buehler, ruiz
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really don’t want to trade: peters, may, smith
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would likely be included in impact trade: d. Santana, white, diaz
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probably not as much value as we think: alvarez, rios, sheffield
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guys I hope we don’t part with at this point because it’s too early: wong, Kendal, furgeson, jimenez, heredia
AC
Good job!
What do you think about what the Yankees have done, to go from an old line up, to a young line up, in the last four, or five years?
I think the Yankees are more comparable to us, because they didn’t have to rebuild, and the Dodgers are only second in value, to the Yankees.
I do think that because our front office came from teams, that never had the financial resources the Dodgers have, they are still Leary when it comes to making big deals, whether that is trading a top prospect or paying out, for a top player.
They are much more about low risk, high reward players, because there is not much risk there, and because the cost is not that much, whether it be money, or prospects.
Although I don’t care if they want to continue to find that proverbial needle in the haystack, I also think they need to also take more advantage of the many resources the Dodgers have too, because we haven’t seen, much of that.
And that is why I think some people get frustrated with the front office, because the Dodgers are the second richest team in all of baseball, and you don’t see the Yankees and these other large market teams, so worried about money, or the luxury tax, like the Dodgers.
I totally agree with you about Kershaw, signing Kershaw shouldn’t be considered the Dodger’s big purchase of free agency next year, or their big move of the off season, next year.
Because that is not making the Dodgers any stronger, or better, then they currently are, right now.
Like I already said, the Dodgers are the second richest team in all of baseball, and because of this, there should be more concern about making the team stronger, then worrying about the luxury tax, and the many resources, the Dodgers have, especially after the team made it all the way, to game seven, in the World Series, just last year.
It is upsetting to many people, that the Dodgers didn’t do much of anything in the off season, to make this team better, while almost every other team that went to the post season last year, did make moves, to make their teams stronger.
What good is it, to be the second richest team in all of baseball, if you are going to worry more about the luxury tax, then making the team stronger, especially after how far the team went last year.
Personally, I think Buehler should be brought up NOW. He’s 24 – not 19 or 20. Let’s see what he’s got!
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Hopefully, Urias will also be up later in the year and it should not be lost on us how good he can be if he is healthy.
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Maybe it’s time to turn Alvarez into a reliever?
I still strongly suspect that FAZ is looking at future free agent markets and preparing to make an impact on them. That makes this season well, expendable, for lack of another word. We all know they are looking 10 or 12 moves ahead. 3 dimensional chess vs candyland. IDK. Maybe I’m giving them too much credit.
Good job AC. My take is that the Dodgers had the missing piece in 2017, maybe before, but he didn’t get it done. No, I don’t mean Yu Darvish. I mean CK who some have compared to Sandy Koufax. Not a bad comparison for sure but Clayton has failed to show up in the post-season like Sandy did. FAZ can’t be blamed for both Clayton and Kenley coming up short. They surely would think as we did they both would be significant cogs in the WS run. Both at the top of their mid-season game and the Dodgers win walking away.
FAZ now does have a decision to make when the train gets back on the track. They need someone to take the ball and run with it as back up if Clayton can’t overcome his post-season blues.
Great article! Did the financials show the Dodgers as profitable? If Total Revenue was $522M, what were their Total Expenses (part of which you told us were Player Expenses of $261M)?
I am still mad FAZ did not find a way to bring us Stanton, and just below that was not offering Morrow enough to stay. It would have cost us trading Grandal to stay under the cap, but I could live with that.
Nice piece AC. You summed up nicely what myself and others have been trying to say in a succinct way. I like FAZ and think they’ve done a good job, but I’ve been vilified on another blog for trying to say what AC just said. FAZ is good but they’ve missed on a few also.
Some say the Dodgers were one game away from winning it all why not bring back the same team. My answer is look at the Astro’s. They won it all but didn’t rest on their laurels. They moved pieces to get better and acquired Cole. FAZ has been good but just hasn’t made that one trade that seals the deal. Will they this year? We will have to see, lets get back to this one!!
One question: Does the Player Expenses reflect the Luxury Tax Penalty in 2017 which I think was over $50 million?