Dodgers Financial Scandal

4,771 Views | 64 Replies | Last: 9 days ago by Mathguy64
All I do is Nguyen
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Figured this will impact fans of all teams so why not consolidate this into one thread. Also, I am notorious for falling for troll posts and fakes, so please do not hesitate to call me or anyone else out.

If you happen to post a troll or fake post just remove it so we can keep this thread as efficient as possible.

















No matter what!
Epstein didn't do, you know, the thing...
I'm the rare Astros/Cowboys/Spurs fan. We do exist
AgRyan04
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This is pretty wild
TarponChaser
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It's behind a paywall but when the WSJ investigates and does a story showing how fraudulent it all is I'm inclined to believe it.
rausr
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AG
Mathguy64
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Meh. They will just declare bankruptcy and MLB will let them keep 100% of everyone's media rights plus everyone else's playoff media shares to bail them out.

They are too big to fail.
Big Al 1992
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Nm
W
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whoever handled the Ohanti situation two years ago...

I would hire those guys if I were the Dodgers and/or MLB
Marvin
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I liked this comment- "just have Walter blame it on his interpreter."
AggieEP
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Best case scenario for MLB and the MLBPA is that the Dodgers problem they are all dealing with goes away because it was fueled by a crook of an owner and not because baseball's economics require a strike/lockout to solve. I do wonder why though if Walter is a crook, why he'd be so obvious about it by running the Dodgers in a way that draws tons of attention to him.

I'm always pessimistic that rich guys will ever have to face real consequences, but who knows. I'm also unclear how it's even remotely possible that Walter could sell the Dodgers in time to actually raise 20 billion if he had to by the end of the year. These transactions are extremely complicated and take a lot of time to finalize and be fully funded. Unless Elon Musk decides he wants to own the Dodgers, the list of people with billions of dollars of cash burning a hole in their pockets isn't that long. Most billionaires have their assets constantly invested so it's not a matter of writing a check.
LouisHerbertWong
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F the Dodgers, amirite?
PhatMack19
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Shohei would be a free agent if owner has to sell?



Dodgers owner Mark Walter is under a federal investigation and a whole lot of pressure. He just sold the Lakers only 14 months after buying the Lakers, he is selling his shares in Chelsea FC, and well the pressure is mounting and rumors are swirling about the Dodgers. The one key component here is Shohei Ohtani who is owed still $680 million by the Dodgers and well most of the contract is deferred until the 2040s. These two facts belong together, because Ohtani does have the richest contract in sports history, and that contract is owned by an owner who is under federal investigation. Basically, Ohtani gave the Dodgers a loan and now it looks like he might have loaned the wrong man.

Let's break down the money. Ohtani's contract is worth around $700 million dollars but right now because of the contract's structure most people do know he takes home around $2 million a year. The rest of that money? Well it's going to according to his contract be paid out 2034 to 2043. But he's not the only Dodger whose deal is structured this way. They owe a total of over $1 billion dollars to nine different players with the payments being deferred all the way out to 2047. We all know about the infamous Bobby Bonilla day for the Mets where they pay him every July (that just ended), well the Dodgers took Bobby Bonilla day, injected it in Barry Bonds steroids and built a championship roster on layaway. They get the superstars today, the rings today, and the bill is due in the 2040s.

But one thing about deferred money and sports contracts is kind of insane. It's not secured. Many are saying that it was Ohtani's own idea to defer the money so the team could build a winner around him. Now, that may be true, but the money is not secured. Unlike most loans, there is no collateral, he doesn't have a personal guarantee on Dodger stadium or anything of that sort. All he has is a promise, and it looks like he trusted the wrong man. If something happens cash wise, Ohtani is just another creditor standing in line looking for his money.

And Walters seems to be in huge trouble. But there is one thing in Ohtani's contract that many people are missing. He has a "key-man" clause. If Walters sells the Dodgers (whether by choice or force) or if their executive Andrew Freidman leaves, Ohtani has the option to opt out of the rest of his contract. Which is funny, he wasn't trusting the Dodgers franchise, he was trusting Walters himself. And Ohtani has said he would not opt out, but when facts change, opinions can too.

So if Walter has to sell, Ohtani basically can overnight become a free agent. And with an impending lockout and Walter needing cash, I think he might have to sell. And there is a darker road to the Dodgers problems and that is bankruptcy which might seem far fetched for a pro sports franchise but the Dodgers did go bankrupt in 2011. And a team bankruptcy can ask the courts to reject a contract which basically makes the player an unsecured creditor fighting to get pennies back on his dollar. And Ohtani's $680 million with ZERO collateral? That's something that has no leverage in a courtroom.

Now none of this is a prediction, and this can all play out in Ohtani's favor, and Walters may even keep the Dodgers. But sports structure always assumes one big thing. And that is the franchise owner is stable. And that seemed like a given with Walters as he was buying assets and spending money left and right. But it's harder to believe when he is under investigation and selling everything he owns. Ohtani made a bet worth $680 million dollars that the people who run the Dodgers would be safe and good standing when he turns 40. Well, his money is riding on a promise and hope.
The Sun
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Dekker_Lentz
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AG
Not to derail, but I never want to hear a Dodger fan say anything about 2017 ever again.
Mathguy64
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Dodgers fans for the last 3 years: "We arent doing anything financially with contracts that any other team cant do. Yall are just mad that we keep winning. Bunch of crybabies. Go Big Blue!"
EliteElectric
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Dekker_Lentz said:

Not to derail, but I never want to hear a Dodger fan say anything about 2017 ever again.

*
www.elitellp.net/

AustinAg2K
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PhatMack19 said:

Ohtani made a bet worth $680 million dollars that the people who run the Dodgers would be safe and good standing when he turns 40. Well, his money is riding on a promise and hope.


I am starting to think Ohtani is really bad at betting.
EastSideAg2002
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For such a valuable franchise, dodgers sure like to hang around bankruptcy alot.
All I do is Nguyen
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No matter what!
Epstein didn't do, you know, the thing...
I'm the rare Astros/Cowboys/Spurs fan. We do exist
Kashchei
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AG
Wait, I was told that other owners are just cheap and could spend as much as the Dodgers if they really wanted to...
fightintxag13
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Why aren't any of the main national MLB guys talking about this yet??
DallasAg 94
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AustinAg2K said:

PhatMack19 said:

Ohtani made a bet worth $680 million dollars that the people who run the Dodgers would be safe and good standing when he turns 40. Well, his money is riding on a promise and hope.


I am starting to think Ohtani is really bad at betting.


Nah... just bad "translators."
scd88
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It will be interesting to see how MLB and Manfred protect them.

Oh, and **** the LAD.
fc2112
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r I know most of us probably have trouble wrapping out arms around $20 billion.

There are only about 50 Americans with that kind of wealth. It is the market capitalization value of NRG Energy or Dow Chemical. It is 29 times the value of Ohtani's contract.

AustinAg2K
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I think Ohtani's contract is going to end up being a major problem when trying to sell the team. They still owe something like $650 million on it. That is a significant liability. I'm a guessing any bank is going to require you have insurance to cover the contract in case he gets injury. Since he pitches, that's highly likely, so the insurance in going to be very expensive. I don't have evidence of this, but I would guess Walter essentially got free insurance from his companies for it, but since those are imploding, you're going to have to look elsewhere. The best case scenario is probably that Ohtani opts out, but then you lose your best player. Anyway you look at it, it's a bad contact for someone buying the team.
AgRyan04
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2024*
2025*
All I do is Nguyen
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No matter what!
Epstein didn't do, you know, the thing...
I'm the rare Astros/Cowboys/Spurs fan. We do exist
All I do is Nguyen
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Bro is doing everything but talking about the biggest news story in sports right now

No matter what!
Epstein didn't do, you know, the thing...
I'm the rare Astros/Cowboys/Spurs fan. We do exist
Kashchei
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AG
Fans are angry their teams won't follow the Dodgers in committing fraud to the tune of billions of dollars? Am I reading that tweet right?
Ag4life80
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AG
Sorry, but all this BS is on the commissioner, who did not exercise ' the best interest of baseball' power that he has. Manfred is crooked, arrogant, and a disgrace. F him.
fullback44
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Yikes, this is pretty wild, the league is happy to look into certain teams stealing signs but they happily turn their head on one of their darlings teams owners doing very shady stuff, to the point federal investigations are on going into how this dude is funding the team possibly through insurance? …. This could be the biggest MLB scandal ever… I hope if he has to sell the Dodgers they have to forfeit all those playoff games. Gonna be a HUGE stain on the MLB
All I do is Nguyen
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Passant has finally broken his silence

No matter what!
Epstein didn't do, you know, the thing...
I'm the rare Astros/Cowboys/Spurs fan. We do exist
All I do is Nguyen
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No matter what!
Epstein didn't do, you know, the thing...
I'm the rare Astros/Cowboys/Spurs fan. We do exist
BMX Bandit
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Quote:

but the money is not secured. Unlike most loans, there is no collateral, he doesn't have a personal guarantee on Dodger stadium or anything of that sort. All he has is a promise

one caveat to this is that there is money that is set aside. every year, ownership has to put the discounted present value of the money owed into an account.

now, whether that money is in a "trust' and protected or still something general creditors could go after would depend on how the account is set up.

nereus
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AG
BMX Bandit said:


one caveat to this is that there is money that is set aside. every year, ownership has to put the discounted present value of the money owed into an account.


They have a 2 year grace period before they have to put in the present value of the deferred money. So deferred money earned for playing this season (2026) doesn't have to get put in until the end of the 2028 season.
mavsfan4ever
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What's the the benefit tot he dodgers if they have to set the cash aside in a sort of escrow account now? If that's true, thy might as well pay the player now.

I'm not saying you are wrong bf I've heard that before. But that seems to do away with any benefit to the club and does not actually allow them to defer anything.
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