There is a lot of discussion on this. Two real advantages.
1- If you defer boatloads of contracts like what the Dodgers have done, because of some of the language in the CBA it can free up additional cash today even though they still have to place the money in escrow (within the 2 year window). For example the Ohtani deferrals gets the Dodgers about 3 million dollars in today money they can use because of some wiggle room in how the deferred money is calculated.
2- If you are never planning on making good on these contracts because you know you are under investigation for fraud you could hypothetically go all in on the deferred contracts under the principle that it won't be your problem to solve once you cash out and leave.
I think the benefit to the Dodgers via point 1 is pretty small and doesn't really give much of a competitive advantage. It was silly how up in arms fans were about the very minimal benefit to the team for doing deferrals. However, the benefit is huge to the Dodgers (at least in present day) if the plan was always to default on everything and bail before the big bills started coming due.
The scandal (if what has been posted is really true) is that Walter has just been moving money b/w his companies loaning himself money and getting his companies to give him good deals (like their lucrative regional sports deal). The volume and frequency of how he did this seems to be sketchy at best and highly illegal at worst and some of the bills are coming due now and he might need to cash out and pay some of them. If it's all true, then baseball never had a Dodgers problem, they had a Walter problem that will soon be resolved.
1- If you defer boatloads of contracts like what the Dodgers have done, because of some of the language in the CBA it can free up additional cash today even though they still have to place the money in escrow (within the 2 year window). For example the Ohtani deferrals gets the Dodgers about 3 million dollars in today money they can use because of some wiggle room in how the deferred money is calculated.
2- If you are never planning on making good on these contracts because you know you are under investigation for fraud you could hypothetically go all in on the deferred contracts under the principle that it won't be your problem to solve once you cash out and leave.
I think the benefit to the Dodgers via point 1 is pretty small and doesn't really give much of a competitive advantage. It was silly how up in arms fans were about the very minimal benefit to the team for doing deferrals. However, the benefit is huge to the Dodgers (at least in present day) if the plan was always to default on everything and bail before the big bills started coming due.
The scandal (if what has been posted is really true) is that Walter has just been moving money b/w his companies loaning himself money and getting his companies to give him good deals (like their lucrative regional sports deal). The volume and frequency of how he did this seems to be sketchy at best and highly illegal at worst and some of the bills are coming due now and he might need to cash out and pay some of them. If it's all true, then baseball never had a Dodgers problem, they had a Walter problem that will soon be resolved.
