South Platte said:

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I'm for a hard salary cap only if the owners have a hard cap on ticket prices. Give the money back to the people. Don't make it difficult for a family to afford a trip to the ballpark. Game experiences are fun, regardless of the win-loss outcome.

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They would remove seats and add more corporate suites if there was a cap on ticket prices.

As bad as the Colorado ownership is, it was smart to turn the right field seats into a "social gathering" spot.

TarponChaser said:

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I think these would piss off both sides pretty equally but would actually work well for the game.

• Hard salary cap
• Hard salary floor
• End blackouts
• Fix the ability of fans to stream all games across multiple platforms
• Pooling and equal distribution of all media rights proceeds
• Fix the service time manipulation (something like 90-100 days on the MLB active roster)
• Arbitration eligible after 2 years
• Unrestricted after 5 years
• Owners required to re-expand MiLB rosters and clubs so that players actually have a path to develop
• Increase MLB active rosters to 30 players w/ 16 pitcher max (September call-ups go to 32)
• End deferred contracts (clubs can grandfather in 50% of their current deferred contracts, otherwise they have to trade guys)

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On board with almost all of this. Damn mind reader.

I've still never heard anyone give a convincing reason why deferred contracts are some kind of unfair advantage.

Bonilla contract = dumb, can't believe anyone would do that.

Dodgers contracts = unfair

The Dodgers have to fund the contract and put the money in escrow. The players are just accepting a below market investment from the Dodgers at a guaranteed return rate.

How is it circumventing the luxury tax?

toucan82 said:

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How is it circumventing the luxury tax?

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It's how those dollars owed after the contract ends are calculated now. I don't know the specifics how the calculations are done, so I'll just provide the AAV outcome of the Ohtani contract.

Quote:

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Shohei Ohtani's historic 10-year, $700 million contract with the Los Angeles Dodgers features $680 million in heavy deferrals. Because so much money is pushed a decade or more into the future, the present-day value dropped to roughly $460 million, reducing his annual luxury tax AAV from $70 million down to about $46 million.

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Money in the future is worth less. Why should the full future amount count against the luxury tax now?

TarponChaser said:

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AggieEP said:

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I've still never heard anyone give a convincing reason why deferred contracts are some kind of unfair advantage.

Bonilla contract = dumb, can't believe anyone would do that.

Dodgers contracts = unfair

The Dodgers have to fund the contract and put the money in escrow. The players are just accepting a below market investment from the Dodgers at a guaranteed return rate.

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Don't be obtuse.

Bonilla's deal was at the end of his career and the Mets were waiving him but would still owe him on the contract but given what they thought they were getting from their Madoff investment were going to make money on the deferral. It wasn't designed to circumvent any rules but allow them to waive an old player who couldn't play anymore without absorbing a large financial hit.

The Dodgers' deals are designed to circumvent the luxury tax and violate the spirit of the rules.

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It's not obtuse at all, and it's not circumventing the luxury tax or against the spirit of the rules at all. The Dodgers really signed Ohtani to a 10 year 460 million dollar contract and that is what counts against their CBT. (46 million annually) That 46 million AAV is actually less than other teams offered.

Ohtani simply decided to allow the Dodgers to invest 44 million of that per year for a guaranteed rate of return in future dollars. The Dodgers still have to fund the amount every year. It's fundamentally no different than the Bonilla situation, the player is trading their ability to invest/spend their money now by locking in a guaranteed future return. The Dodgers are obviously hoping that they can beat the rate of return on investing 44 million per year, but that's no guarantee. If things turn sour with the economy these deferred contracts could ruin the Dodgers.

The only person clearly profiting here by pretending it's a 10 year 700 million dollar deal is the agent who maybe got a better commission. You have simply been hoodwinked by the narrative surrounding these deals into thinking that they are something they are not.

ETA: The only clear loser here is California because Ohtani will likely be able to dodge tens of millions of income tax payments by leaving the state before the payments start to come in. And perhaps you could argue that the tax benefits are unfair, but I haven't seen anything in my lifetime to support the idea that athletes pick their teams based on local tax codes.

For the reading pleasure of any who care.

https://www.phelps.com/insights/the-billion-dollar-question-are-deferred-compensation-contracts-in-the-mlb-legal-or-have-the-dodgers-broken-baseball.html

(Most relevant excerpt)

Do the Dodgers have a competitive edge by using deferred compensation contracts?

The Dodgers have been one of the most, if not the most, successful franchises in the last 10 years. How much of that success is due to the use of deferred compensation contracts? Likely none.

First, any club and player can utilize the freedom provided by deferred compensation, not just the extremely wealthy. In fact, smaller market teams might consider it a competitive equalizer to free up immediate cash to pursue bigger stars.

Second, the use of deferred compensation does not have a material effect on the competitive balance tax, also called the luxury tax. The CBA calculates the deferred salary into the total annual amount for luxury tax purposes. A club's luxury tax is levied if the club's "actual club payroll" exceeds the "base tax threshold." The actual club payroll includes deferred compensation costs as part of players' "average annual value."

Therefore, the clubs using deferred compensation contracts do not avoid luxury tax responsibility for the current annual value of that deferred compensation. In other words, the MLB still calculated Ohtani's $68 million deferred value into the Dodgers' actual club payroll when determining its luxury tax under CBA Article XXIII.

AggieEP said:

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For the reading pleasure of any who care.

https://www.phelps.com/insights/the-billion-dollar-question-are-deferred-compensation-contracts-in-the-mlb-legal-or-have-the-dodgers-broken-baseball.html

(Most relevant excerpt)

Do the Dodgers have a competitive edge by using deferred compensation contracts?

The Dodgers have been one of the most, if not the most, successful franchises in the last 10 years. How much of that success is due to the use of deferred compensation contracts? Likely none.

First, any club and player can utilize the freedom provided by deferred compensation, not just the extremely wealthy. In fact, smaller market teams might consider it a competitive equalizer to free up immediate cash to pursue bigger stars.

Second, the use of deferred compensation does not have a material effect on the competitive balance tax, also called the luxury tax. The CBA calculates the deferred salary into the total annual amount for luxury tax purposes. A club's luxury tax is levied if the club's "actual club payroll" exceeds the "base tax threshold." The actual club payroll includes deferred compensation costs as part of players' "average annual value."

Therefore, the clubs using deferred compensation contracts do not avoid luxury tax responsibility for the current annual value of that deferred compensation. In other words, the MLB still calculated Ohtani's $68 million deferred value into the Dodgers' actual club payroll when determining its luxury tax under CBA Article XXIII.

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This part is probably a lot more relevant. Plus, because of their particular TV rights the Dodgers have more revenue to absorb the luxury tax while having immediate dollars from the deferred value to sign more expensive players.

Does the MLB's collective bargaining agreement regulate how teams pay players?
The CBA controls terms and requirements for the MLB's deferred compensation contracts. Article XVI of the CBA specifically provides for deferred compensation, notably with no limits. The CBA requires the club to fully fund "the present value of the total deferred compensation obligation," but it gives clubs a two-year grace period before having to front the funds. Fully funded means "the current present value of the then outstanding deferred payments, discounted by 5% annually." That 5% discount rate can be negotiated later by the player and club based on the stock market fluctuations. The discount is based on the assumption that the club will invest 95% of the amount, and that it will grow by at least 5% to equal the full deferred amount by the final distribution date.
The CBA gives clubs freedom to invest the 95% as they see fit, provided that the amount is earmarked for the player and remains rather liquid. A player's agreement may provide otherwise or require with more specificity how that money is put aside. Unless a player's contract provides otherwise, a club may fully fund the deferred compensation amount "in such manner as it elects." The funds are also "subject to the claims of the club's general creditors." The CBA outlines various compliance measures for the Player's Association to monitor the club's funding obligations.
Use Ohtani again as a general example. He deferred about $68 million annually, which means that the Dodgers need only put up 95% of that amount: roughly $64,600,000. Using these estimates, Ohtani's contract alone frees up $3.4 million in cash for the Dodgers to move around, on top of the two-year grace period the Dodgers can take into account. Likewise, there is no restriction in the CBA saying the Dodgers cannot make more than 5% return on the invested $64,600,000, as long as Ohtani gets his annual valuation of $68 million at the end of the term.
It's worth emphasizing what a club can do with an extra $3.4 million. While it might be dwarfed by Ohtani's record-setting $70 million per year salary, most MLB contracts are nowhere near that high. For example, future hall of famer pitcher Clayton Kershaw resigned last year with the Dodgers for $7.5 million in 2025. Almost half of Kershaw's salary alone can be covered by the money saved on Ohtani's deferred salary. As a further illustration, the $3.4 million saved might seem trivial compared to the Dodgers' total payroll of $303,851,665, composing roughly 1.12%. But when compared to the payroll of the lowest payroll team, the Marlins at $43,630,000, that $3.4 million goes much further (roughly 7.79%).

I agree that part is also relevant, but it fits in with what I posted that ANY team could make use of deferred compensation to free up cash today and to perhaps make more money if investments turn out well.

I also think it's interesting that deferring 68 million only frees up like 3 million dollars. So to realize these benefits you have to defer a lot of money. Kind of makes the point that it's better to go all in on deferring like the Dodgers did if you want to really free up an amount of cash that could let you sign an extra good player.

AggieEP said:

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I agree that part is also relevant, but it fits in with what I posted that ANY team could make use of deferred compensation to free up cash today and to perhaps make more money if investments turn out well.

I also think it's interesting that deferring 68 million only frees up like 3 million dollars. So to realize these benefits you have to defer a lot of money. Kind of makes the point that it's better to go all in on deferring like the Dodgers did if you want to really free up an amount of cash that could let you sign an extra good player.

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That's also because they're willing and able to pay the luxury tax and combining that with leveraging their deferrals to sign more massive deals.

While having the biggest payroll doesn't guarantee success it damn sure makes it easier.

No argument that I'd rather be a big payroll team than a small payroll team. The question I've always had though is why MLB puts up with cheap ass owners that aren't even willing to meet halfway in spending to build a competitive club. True the A's, Pirates, Reds, Rays, Marlins have smaller markets than the Dodgers, but not to the extreme where they should be fielding AAA rosters and shipping out any expensive player. The competitive balance problem is hidden in the obvious truth that some clubs aren't competing for championships.

The other question is if we're willing to lose a season of baseball because we're that committed to the idea that the game is broken as is. Personally when I look at baseball the only issue I see is the rise of profit driven ownership groups that see clubs as investments and don't really care about winning.

AggieEP said:

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No argument that I'd rather be a big payroll team than a small payroll team. The question I've always had though is why MLB puts up with cheap ass owners that aren't even willing to meet halfway in spending to build a competitive club. True the A's, Pirates, Reds, Rays, Marlins have smaller markets than the Dodgers, but not to the extreme where they should be fielding AAA rosters and shipping out any expensive player. The competitive balance problem is hidden in the obvious truth that some clubs aren't competing for championships.

The other question is if we're willing to lose a season of baseball because we're that committed to the idea that the game is broken as is. Personally when I look at baseball the only issue I see is the rise of profit driven ownership groups that see clubs as investments and don't really care about winning.

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And from what I've read, the Dodgers have a unique financial situation which allows them to absorb the much higher costs.

I 100% agree about the cheap-ass owners like the ones you mentioned. That's why a salary cap has to be matched with a hard salary floor.

Lot to dive into here but interesting stuff about the doyers finances.

How do the Dodgers carry an unlimited payroll?

Filings uncovered by @NickNemo17 show roughly $1.45 billion in debt for American Media Productions, the entity behind SportsNet LA and the Dodgers' 25-year, $8.35 billion Charter deal, sitting on the balance sheets of 5 life… https://t.co/TDWIARMmdY

— Jake (@EconomPic) August 18, 2026

My understanding of that tweet seems to reinforce the idea that a day of reckoning is coming for the Dodgers when all these bills come due. Sure the Dodgers have cooked the books to enjoy success today, but either through investigations into the legality of their arrangements or through having to actually pay some of their bills the Dodgers are facing down some real challenges.

Maybe this was Walter's goal all along and he's going to cash out after the season and let some other schmuck clean up his mess.

Don't worry, they will go bankrupt and then Manfred will give them a sweetheart deal where they qualify as a small market team so they pay no taxes and get revenue sharing from other clubs.

Maybe, but if it turns out that this run of Dodgers dominance was fueled by deliberate and illegal double dealing the other owners might feel like they have been cheated and deserve a chance to punish the Dodgers.

Also, for the purposes of this thread, I think it's important to note that the Dodgers doing illegal stuff shouldn't lead to a salary cap. The whole premise of the "Dodgers are ruining baseball" argument is based on the supposition that they have an advantage within the rules that has allowed them to outspend all other teams. If it turns out that this is all a house of cards built illegally and on the verge of collapsing then the answer to the Dodgers problem is just to make sure no other teams try shenanigans like this in the future.

AggieEP said:

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Maybe, but if it turns out that this run of Dodgers dominance was fueled by deliberate and illegal double dealing the other owners might feel like they have been cheated and deserve a chance to punish the Dodgers.

Also, for the purposes of this thread, I think it's important to note that the Dodgers doing illegal stuff shouldn't lead to a salary cap. The whole premise of the "Dodgers are ruining baseball" argument is based on the supposition that they have an advantage within the rules that has allowed them to outspend all other teams. If it turns out that this is all a house of cards built illegally and on the verge of collapsing then the answer to the Dodgers problem is just to make sure no other teams try shenanigans like this in the future.

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Even with all that, I still think a salary cap and salary floor are necessary to maximize competitive balance. There will always be franchises, regardless of sport, which spend and are still inept (see Cleveland Browns for example) but these rules at least provide a balanced financial environment where teams can't spend others into oblivion.

Soccer guy here. No idea what the solution is but great thread all around.

I'm about to get pummeled for this and I know it would never in a million years happen: introduce promotion and relegation and all of your problems are solved (plus you solve the issue of the sucky life of the minor leaguer).

ThunderCougarFalconBird said:

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Soccer guy here. No idea what the solution is but great thread all around.

I'm about to get pummeled for this and I know it would never in a million years happen: introduce promotion and relegation and all of your problems are solved (plus you solve the issue of the sucky life of the minor leaguer).

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I like the concept of relegation and promotion but the way the professional leagues are set up here there's just no way to make it work.

I think all of us would welcome relegation in a world where it was even remotely possible. Suddenly being a cheap ass owner doesn't seem like a good business decision when your team gets relegated and all the welfare you were getting from the rich clubs goes away.

I just can't understand why we'd want to punish the well run clubs by creating a welfare league for the poorly run clubs by capping teams out. I get that we're all mad at the Dodgers right now, but we have to take a more balanced view of what the consequences of a cap would be. The current system already enriches the cheap owners at the expense of the big market teams, so how much further do we have to push this envelope before we just admit that some owners never cared about competing in the first place.

My nightmare is the NFL or NBA, where good teams have no choice but to cut or trade good players all the time just to make decisions about what money to keep, and what money to dump. In this kind of situation, teams like the Rays, Pirates, Reds, Marlins, A's etc. are set up to benefit when a capped out team is forced to dump a guy so they can sign/resign or trade for someone else. It would seem very likely that we'd see NBA style salary dumping trades like what OKC did this offseason when they just gave away 3 players for free. It's also not hard to imagine a guy reaching free agency and the above mentioned teams are the only ones with space and they low ball him driving down a player's value. Do we really want to see the Marlins sign 4.0 WAR players at 50% of their AAV value just to stick it to the Dodgers? Is that at all fair to the players?

As far as I'm concerned if those owners don't want to compete for the best players at market value and for championships, then forget about them. No reason we should create a system that props them up via welfare.

That's the version of competitive balance that the NFL and NBA have, and it sucks. It ends up creating 30 mostly average teams who plug one hole on their rosters by creating a hole somewhere else. Sure occasionally we'll see a young team blossom and defy this logic, but in general we're condemning ourselves to a future of average teams competing to be the least bad to make the playoffs.

AggieEP said:

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My nightmare is the NFL or NBA, where good teams have no choice but to cut or trade good players all the time just to make decisions about what money to keep, and what money to dump.

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I think that's your issue. The management of the franchise as a business and making these smart decisions on who to keep, who to pay, and who to cut loose are what makes the competitiveness of those leagues better off. You're not rewarding poorly-run franchises at all. You're forcing them to do better and pay guys who deserve it. You're forced to get better at evaluating talent. You're forcing coaches to get better.

The idea that you can't generate fan interest and loyalty when teams have to ship off talent is absurd to me. Especially in baseball where trades have always been far more prevalent.

#BREAKING: The US Department of Justice has launched an investigation into MLB insider Jeff Passan’s coverage of the LA Dodgers, per sources.

I’m told Passan has been aware of the Dodger’s financial fraud for years, but has failed to report it to the authorities. Now, the DOJ is… pic.twitter.com/WwmWnqS0eh

— Rob Reinhart (@RealRobReinhart) August 20, 2026

I'm 99% that's a troll/parody account

ThunderCougarFalconBird said:

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Soccer guy here. No idea what the solution is but great thread all around.

I'm about to get pummeled for this and I know it would never in a million years happen: introduce promotion and relegation and all of your problems are solved (plus you solve the issue of the sucky life of the minor leaguer).

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It wouldn't solve all of our problems though. It solves the issue of teams intentionally tanking, but it creates additional problems as well.

We just aren't very similar to other countries in size. We have a huge population and that population is pretty spread out across the entire large geographic area of our country.

The US (even if we exclude Alaska and Hawaii) has about 5.5x the population of England/Wales. Again excluding Alaska and Hawaii, the 48 states have over 50x the area of England/Wales.

The London metro area has 6 clubs at the top of the pyramid. We don't have a metro area with more than 2 top tier clubs in it. The second largest metro area (which also has two clubs), has only 2.6 million people. The US has 25 metro areas larger than the UK's second largest.

People always think, oh this will be great. It gives everyone a chance. It gives cities like Nashville, Salt Lake, OKC, etc. a chance to have an MLB team. But, look at the London metro area (6 teams), Madrid metro area (4 teams), Rhine-Ruhr metro area (4 teams). What this will really do is just give NY/LA 3rd and 4th teams. Some other large metro areas get a 2nd team (maybe Frisco/Plano gets a team that splits DFW), etc. We aren't perfectly spread out now, but you would see many more metro areas without teams in the top league (and often no where close to another metro area that has a team in it).

The US is much closer to the geographic size and population of all of Europe combined than we are to any individual European country. To get the equivalent level 1 pyramid coverage that European countries have, you would be looking at something like 100 US teams in the top level of the pyramid.

TarponChaser said:

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AggieEP said:

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My nightmare is the NFL or NBA, where good teams have no choice but to cut or trade good players all the time just to make decisions about what money to keep, and what money to dump.

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I think that's your issue. The management of the franchise as a business and making these smart decisions on who to keep, who to pay, and who to cut loose are what makes the competitiveness of those leagues better off. You're not rewarding poorly-run franchises at all. You're forcing them to do better and pay guys who deserve it. You're forced to get better at evaluating talent. You're forcing coaches to get better.

The idea that you can't generate fan interest and loyalty when teams have to ship off talent is absurd to me. Especially in baseball where trades have always been far more prevalent.

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In no way does cutting guys and calling them a "cap casualty" make those leagues better.

It would also pretty much ruin the end of careers for most guys. The NFL is a cutthroat business whereas the MLB has a soft spot for keeping guys on teams because of the fans. Once you get to the stage where every roster spot matters for your cap situation, no one is going to keep a guy like Biggio on the roster while he chases 3000 hits.

You can call it a "smart" decision, but I think it's asinine to force teams to cut or trade good players just to get under the cap. Those players are then forced to go work for a crappy team on the cheap. The current system allows the flexibility to exceed the CBT threshold when it makes sense for a team to do so. The penalties are actually pretty severe for doing so which does deter many teams from playing around above that line for long. And despite all that's been added to benefit the small market teams (direct payments, extra draft picks) we still haven't seen anything that tells us that they are interested in spending anything close to even what the proposed salary floor would be.

I think most people are Ok with that dynamic because they know that it's a business.

This salary cap seems small to me. Maybe intentionally low?

MLB’s proposed salary cap for 2027: $245.3M.
The Dodgers already have $455M committed to player salaries for 2027.
That’s nearly $210 MILLION above the proposed cap before the 2027 season even begins.

Under MLB’s proposal, 8 teams would have to cut a combined $578M in payroll.…

— Michaela Bennett (@MichaelaB_22) August 26, 2026

There are only 5 or 6 teams above that currently

Very curious how Trump might insert himself in all this as he has mentioned he might do.

10andBOUNCE said:

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Very curious how Trump might insert himself in all this as he has mentioned he might do.

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Based on what Trump has done previously, he'll probably send a few tweets calling for a deal but I wouldn't expect any substantive involvement. He probably knows most of the owners and they'll likely tell him to stay on the sidelines unless they think he can rile up the fans against the players without it blowing back on them. The problem there is that nuanced communication that doesn't feature blowback isn't really Trump's specialty.