"Dodgers are running massive credit card debt" - MLB sportscaster raises concerns about Shohei Ohtani, Mookie Betts' deferred salaries
According to MLB sportscaster Ben Maller, the LA Dodgers are playing with fire and their idea to defer large contract values to the next decade might come back to bite them.
Last offseason, the Dodgers signed several contracts that had a deferred clause in them. This includes Shohei Ohtani's blockbuster 10-year, $700 million contract as well with almost 97% of the contract value being deferred until the next decade and will be paid equally from 2034-2043. According to Spotrac, "the Dodgers have secured $964M of deferred payments since July 2020."
Maller thinks the 'Dodgersland,' as he calls it, is setting itself up for bankruptcy.
"The Dodgers are essentially running up a massive credit card debt—they're spending money that they don’t have today," Maller said (8:02 onwards). "As we know in the real world, for adults, that’s the first step on the slippery slope to mediocrity and bankruptcy. So, for the next, let’s say, 10 to 11 years, it’s all good—smooth sailing for the Dodgers. They’ll probably win three or four more World Series during that time.
"But after that? That’s when the bill comes due. That’s when the rubber meets the road, and it’s going to be bad. They might even bring back Hee-Seop Choi—that’s how bad it could get in Dodgerland. As someone pointed out, enjoy this now because it’s going to get ugly around that time."
Ben Maller thinks Dodgers' ownership group will sell before the bill is due
Ben Maller feels that a time will come when the current ownership will sell their stake and the onus will be then on the new owner to pay this money. And if it doesn't go smoothly, they might reach a stage where they have to declare bankruptcy.
"The rumor—and who knows if it’s true—is that the ownership group of the Dodgers is more likely than not going to sell the team around the time they have to pay out all this deferred money," Maller said. "They’re going to get out, and some other owner is going to step in and be handed, by that time, probably $1.5 billion in deferred payments."
Maller is cautioning MLB and Dodgers fans that even though they are reaping the benefits now, there might come a time when all the dominoes will fall.
"I don’t anticipate Major League Baseball closing the loophole because the argument is, 'Just wait, you’ve got to play the long game.' If you play the long game, eventually, this will be a gigantic problem for the Dodgers," Maller added.
"Even though they have the money, it doesn’t mean a new owner will want to continue spending at that level. They’ll say, 'I have to pay this amount of money to Shohei Ohtani, who will be in his 50s, and Mookie Betts, who will also be in his 50s. I don’t know about that.' So anyway, enjoy it now because the future could look very different."
The Dodgers have $680 million credit from Shohei Ohtani, $115 million from Mookie Betts, $62 million from Blake Snell, $57 million from Freddie Freeman and $50 million from Will Smith.
Interestingly, most of this money is deferred until next decade and Ben Maller thinks all may not pan out well.